Sakana Holistic Housing Solutions, a leading Bahrain-based Islamic financial institution, has posted a net profit of BD0.71 million ($1.88 million) for 2009, an increase of 22 per cent over 2008.

The 2009 full year results showed an increase of approximately 47 per cent in net mortgage finance income from BD 2.04 million in 2008 to BD 2.99 million in 2009.

Sakana continued to maintain tight control of all operating expenses and managed to marginally reduce the cost-to-income ratio to 56 per cent.

Tough market conditions due to the financial crisis impacted the Bahrain real estate market and Sakana’s mortgage business, resulting in new customer approvals for the year being significantly lower than the previous year.

The mortgage assets for the year reduced from BD32.12 million in 2008 to BD28.43 million in 2009.

Accordingly, the total assets of the company reduced from BD39.89 million in 2008 to BD37.32 million in 2009. The company set aside BD0.15 million towards impairment of mortgage assets.

“Despite challenging market conditions, we have managed to post growth in net mortgage finance income and profits,” said Abdul Hakim Khalil Al Mutawa, Sakana’s chairman.

“Our prudent mortgage underwriting and tight control of expenditure helped us to achieve these results,” he added.

“Though we are seeing early signs of recovery in the global financial markets, the recovery is still fragile.  We are cautiously optimistic in terms of outlook for 2010,” Al Mutawa continued.

“The Government of Bahrain has included ‘housing’ as a priority for citizens in its Vision 2030.  With a growing young Bahraini population and increasing per capita income, the long term outlook for residential property and mortgage is positive,' he noted.

'I take this opportunity to welcome Capinnova Investment Bank, the Shariah compliant investment banking arm and fully owned subsidiary of BBK which has become Sakana’s new shareholder from early this year. Capinnova acquired the shares from BBK.”

Sakana’s chief executive officer, R Lakshmanan said “Our challenge will be to obtain funding at reasonable cost which will enable us to offer competitive products to customers.  We achieved these results despite our funding cost increasing by 75 per cent.”

“We are working in partnership with several leading developers and many of them have made considerable progress in terms of delivering the housing projects.  We will continue to make best efforts in achieving our vision of being a catalyst for the prosperity of the housing sector and the innovator of holistic housing solutions,” he added. – TradeArabia News Service