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DUBAI: Troubled Islamic mortgage firm Tamweel expects to post third quarter earnings similar to its first and second quarter results as it prepares to start issuing fresh mortgages, the company’s chairman said yesterday.
Speaking at the property conference Cityscape Global in Dubai, Sheikh Khaled bin Zayed Al Nahayan said the company had taken the bulk of its provisions in 2009.
“We expect Q3 to be similar to Q1 and Q2,” he said. “We have taken enough provisions so now we can translate our revenues into some profits.”
Tamweel reported a second-quarter net profit of Dh5.4m ($1.5m) compared with a loss of Dh35m in the same period last year.
Sheikh Khaled also said a long-planned merger between troubled Islamic mortgage firm Tamweel and Islamic lender Amlak has likely been scrapped, following Dubai Islamic Bank’s stake increase in late September.
On September 30, ratings company Fitch revised Tamweel’s long-term issuer default ratings (IDR), short-term IDR, support rating and support rating floor to Positive from Evolving.
Dubai Islamic Bank raised its stake in Tamweel to 57.33 percent, effectively rendering Tamweel a subsidiary of DIB, the emirate’s third-largest bank by market value.
The daily Al Ittihad, citing an unnamed source, said on Sunday that Emirates Islamic Bank, an affiliate of Emirates NBD, was in early talks to acquire Dubai Bank and Amlak.
The United Arab Emirates government said in November 2008 it aimed to merge Amlak and Tamweel and has been working on a plan to restructure them. Shares in the two firms have not traded since.
Sheikh Khaled said a resumption in trading of the company’s shares will be a decision for the authorities but added to Al Arabiya television that the board was planning to ask for shares to resume trading.
Tamweel will likely start issuing fresh mortgages in two months, once DIB lays outs plan for the company in detail, he said.
In December, the Dubai government said it formed a judicial committee to protect creditors and companies related to Amlak and Tamweel, in what was seen as a bid to boost transparency.
House prices in Dubai have fallen some 60 percent since their peaks in 2008, billions of dollars worth of projects were put on hold or cancelled, and lending dried up.