Islamic mortgage company Tamweel turns strong profits

30/01/2012 11:19 AST

Tamweel reported strong profits in its first full year since restarting trading operations, as it attempted to put its troubles in the Dubai mortgage market behind it.

The Islamic mortgage company said fourth-quarter profit rose to Dh31 million (US$8.4m) from Dh8m a year earlier.

Full-year profit quadrupled to Dh101.8m last year, beating analysts' estimates.

"Tamweel is firmly back in business," said Abdulla Ali Al Hamli, the company's chairman. "2011 witnessed significant success for Tamweel as evidenced by resuming new business origination and the resumption of share trading."

The improved profits come amid sharply improved earnings for many of the UAE's big banks, which reduced provisions for bad debts last year.

This month, Abu Dhabi Commercial Bank and RAKBank reported strongly improved earnings for the year.

Tamweel had been performing well during the year and had seen better than expected improvement in asset quality during the year, said Mahin Dissanayake, the director of financial institutions at Fitch Ratings.

"The quality of the loan book is pretty good, and the under-construction portfolio is coming down," he said. "It's not all-out growth that they're targeting. They're still focused on resolving their asset-quality issues, and that's why the loan book hasn't grown significantly."

However, Tamweel offered scant information on its financial performance during the year, declining to disclose the performance of its loan book. Total assets, which includes lending, fell 1.6 per cent to Dh10 billion.

Operating income fell 6.9 per cent to Dh600.9m, while income from Islamic financing and investing rose 1 per cent - despite the fact that the bank resumed lending during the period.

Tamweel's shares were barred from trading and effectively frozen for three years following an aborted merger attempt with Amlak Finance in 2008.

After a rescue by Dubai Islamic Bank, which now owns 58 per cent of the company, Tamweel returned to trading on the Dubai Financial Market in May.

The National