Tamweel posts net loss of Dh41m

DUBAI // Tamweel, the Dubai-based Islamic home lender, posted a first-quarter net loss of Dh41 million (US$11.1m) today. This compares to a net profit of Dh176.3m in the first quarter of last year. Tamweel's profitability has been affected by reduced property sales, higher provisioning and increased funding costs, the firm said in a statement on Dubai Financial Market. In light of the adverse market conditions, tight liquidity and falling real estate values, Tamweel said it had taken an additional provision of Dh52m to cover potential future portfolio problems. "This additional impairment provision has been taken purely on a prudential basis and the company has so far not faced any significant specific provision requirement," Sheikh Khaled bin Zayed, the chairman of Tamweel, said in the statement. Islamic financing and investing assets at the end of the first quarter amounted to Dh10.6 billion but this excludes the securitised asset book of Dh384m that has been taken off balance sheet. Tamweel is waiting for a decision from the Ministry of Economy on a merger with Amlak Finance, and possibly also the Real Estate Bank and Emirates Industrial Bank, which would be brought together under the new Emirates Development Bank. Tamweel and Amlak all but stopped new lending in November and their shares were suspended from trading. [e-mail]