Tamweel Q3 net profit plunges 46.5pc

Dubai, October 23, 2012

Dubai-based Islamic mortgage provider Tamweel posted a 46.5 per cent drop in third-quarter profit, missing analysts' forecasts after being hit by higher provisions and funding costs.

Tamweel, majority owned by Dubai Islamic Bank, made net profit of Dh8.4 million ($2.3 million) in the three months to September 30, compared to Dh15.7 million in the prior-year period, according to Reuters calculations.

Arqaam Capital and EFG Hermes forecast a third-quarter profit of Dh22 million and Dh23 million respectively.

"During the third quarter of 2012, Tamweel continued to implement its prudent approach to provisioning, ensuring the long-term profitability of the company and its ability to capitalise on the upturn in the UAE property market," Abdulla Ali Al Hamli, chairman of Tamweel, said in a statement on Monday.

The statement did not elaborate on the higher provisioning, nor why and by how much the cost of financing its lending operations increased.

Net profit for the first nine months of the year stood at Dh45 million, versus a Dh71 million profit in the corresponding period of 2011, the statement said.

Operating income for the first nine months quarter was Dh452 million, up slightly from Dh446 million in the year-ago period.

The company postponed a $235 million asset-backed securitisation in July following a tepid response from potential investors.

Shares in Tamweel, a favourite of retail investors, were 0.7 percent up on Monday before the announcement.-Reuters

Tags: Dubai | Tamweel | Mortgage | Islamic |