Tuesday, Aug 16, 2011
--First half loss widens, compared with a year ago, as revenues decline
--Sets aside more money for loan loss provisioning
--No new business origination over the past two years continued into 2011
(Adds more details, background)
DUBAI (Zawya Dow Jones)--Dubai-based Islamic mortgage lender Amlak Finance (AMLAK.DFM) said Tuesday it made a first-half net loss of 106 million U.A.E. dirhams ($28.9 million), compared with a loss of AED4 million in the same period last year, due to falling revenues and higher provisioning.
Amlak made a second quarter net loss of AED52.2 million, compared with a net loss of AED597,000 a year ago, according to Zawya Dow Jones calculations.
The lender, in a statement posted on the Dubai bourse website, said revenue from financing and investing activity fell 17% in the period versus last year "as a result of no new business origination over the past two years continuing into 2011, and further mortgage rate cuts offered to existing customers."
Total provisioning on its mortgage book for the period soared 96% to AED120 million, it said.
Amlak's total assets, excluding off balance sheet commitment, as at the end of June 2011 stood at AED12.8 billion, down from AED13.8 billion at the end of June last year due to decreasing mortgage portfolio.
Amlak shares didn't trade Tuesday. They closed Monday 5.6% lower at AED1.02.
The U.A.E. government had set up last year a committee to explore the possibility of a merger and balance sheet restructuring for Amlak Finance after its planned merger with its competitor, Tamweel, fell apart when Dubai Islamic Bank raised its stake in Tamweel to 57.33% in 2010. Both Amlak and Tamweel were hard hit by the collapse of Dubai's real estate market.
-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698; mirna.sleiman@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
16-08-11 0739GMT
