Saudi Arabia's mortgage lender Amlak International for Real Estate Finance reported a 21 per cent increase in its second-quarter net profit on the back of higher revenue from financing activities and lower cost of funding.
Net income for the three months ending June 30 rose to 23.8 million Saudi riyals (Dh23.3m), the company said in a statement on Tuesday to the Tadawul stock exchange, where its shares trade. Total revenue from special commissions, financing and investments climbed 6 per cent to 73.1m riyals during the period.
The company attributed the rise in its quarterly income mainly to an increase in “net profit from Ijara, Murabaha, and Ijara Mawsoufa contracts by 17 per cent compared to the same period last year”.
Operating expenses also rose by 3.4m riyals compared to the same period last year due to an increase in impairment charge for expected credit losses.
Set up in 2007, Amlak International is a non-bank lender, mainly providing property loans. It is licensed by the Saudi Arabian Monetary Authority to provide Sharia-compliant lending to corporate, high net-worth and individual clients.
Amlak started trading on the Tadawul earlier this month after completing its initial public offering.
The company said it first half net profit increased 128 per cent to 53.3m riyals due to “overall business growth, in addition to the gain from the Saudi Arabian Monetary Agency’s Private Sector Financing Support Programme and prior year’s Zakat settlement concluded with GAZT [The General Authority of Zakat and Tax]”.
Total revenue from special commissions, financing and investments rose 8 per cent to 148.4m riyals during the reporting period.
Driven by population growth and a supportive government policy, housing demand in the kingdom is expected to increase to 188,000 units a year until 2021. Demand is set to further increase to 203,000 a year from 2022 to 2025 and eventually to 219,000 a year from 2026 to 2029, the company said previously.
The Ministry of Housing intends to disburse 204,000 individual contracts for housing this year, up from 179,217 contracts worth 79 billion riyals in 2019.
