Tamweel, a Islamic home mortgage provider, will be restructured as a holding company, with four operating companies under its fold, a top company official said. "All our operations were parked under Tamweel PJSC, but now we will separate them into different units.
The new structure will permit us to provide a strong focus on each of our businesses," Wasim Saifi, Chief Executive Officer, Tamweel, told Emirates Business.
The UAE mortgage business, property investment, escrow management services and Tamweel International will be the first four operating units, he added.
Shareholders had approved the amendment to the company's articles of association at yesterday's extraordinary general meeting to permit Tamweel to be structured as a holding company.
The company also won an approval to raise Dh5.1 billion through sukuk in 2008. This total amount includes Dh1.1bn of convertible sukuk and Dh4bn of non-convertible sukuk, which also includes Dh1.83bn of non-convertible sukuk previously approved by the assembly.
"The funding will be used by the company to support the expansion of its extremely successful business in the UAE and to fund its ongoing international expansion mostly in Egypt and Saudi Arabia," Saifi said.
"The funds will be raised in a number of tranches spread over the year," he added.In February 2008, Tamweel formalised its intention to launch operations in Egypt by receiving its mortgage finance licence from the Egyptian Mortgage Finance Authority.
It has already signed a joint venture agreement with Al Oula Development Company in Saudi Arabia, where the company expects to open a subsidiary later this year.
The company expects to begin operations in Egypt during the second quarter of this year and by 2011 it anticipates international operations contributing 30 per cent of total revenues.
"During this period of unprecedented expansion, this new equity structure will support our ongoing organic growth," Sheikh Khaled bin Zayed bin Saqer Al Nehayan, Chairman of Tamweel said in a statement.
"Although the benchmark rates came down, it was mostly compensated by increasing credit spread.
However, when the rates went up, we did not increase it either. We have, of course, passed off some benefits to our customers," Saifi said when asked if the company would lower the profit rates on mortgages.
Tamweel's net profit during 2007 stood at Dh451 million, an increase of 195 per cent compared to Dh153m during 2006, marking the third consecutive year that the company's net profit has increased three-fold.
During the same period, earnings per share rose from Dh0.2 to Dh0.451. Islamic financing and investing assets in 2007 rose to Dh5.217 billion compared to Dh2.584bn the previous year, an increase of 102 per cent.
This excludes the recently securitised book of Dh771m that has been taken off balance sheet. Income from Islamic financing and investing assets in 2007 surged to Dh311.5m, registering growth of 100 per cent compared to Dh156m in 2006.By Parag Deulgaonkar
© Emirates Business 24/7 2008
