Amlak Finance registers net loss of Dhs67m in Q2 2009

As at the end of June 2009, Amlak's net loss for the 2nd quarter stood at Dhs67m. Similar to the 1st quarter, the second quarter's loss was mainly due to prudent general provisioning on the under-construction mortgage portfolio, where transaction volumes and property values continued to remain depressed.

Headline revenue from retail mortgage activity has been steady over the half year of 2009 showing a slight growth reaching Dhs385m compared to Dhs376m for the same period last year, this on the back of a 16% growth in property financing book. There was no income from Real Estate investments activity in this quarter compared to Dhs104m in the second quarter of last year.

At the end of June 2009, Amlak's total assets stood at Dhs15bn and financing portfolio stood at Dhs9.5bn, compared to Dhs14.2bn and Dhs8.2bn respectively in June 2008.

'The loss in Q2 was inevitable as Amlak had to make higher general provisions for the financing portfolio,'

said Ali Ibrahim Mohammed, Vice Chairman, Amlak Finance PJSC.

'On the positive side however our assets have witnessed a growth, since Q2 of 2008 while the retail mortgage activity has seen a marginal increase over the same period.'

Ali Ibrahim added: 'As the market is showing gradual signs of revival, we have been prudent with our provisioning and taken solid steps to optimize our strategy on operational costs and liquidity management. We also anticipate the Federal Government to announce their decision on the restructure of the company which will then add further stimulus to our business operations. Although new financing is likely to remain tight over the next few months, we are adamant on service quality and support to our existing customers and stakeholders.'

On his part, Arif Alharmi, Chief Executive Officer, Amlak Finance PJSC, said:

'2009 for Amlak has been a period where we have focused on maintaining the quality of our mortgage portfolio, innovative liquidity management and revisiting our long term business model to be better equipped to meet our customers' as well as all stakeholders' needs in the future.'

Alharmi added: 'Our main endeavor in the second quarter was to reduce and restructure our real estate investment obligations as well as divest from international portfolio investments. The market has a positive outlook on the long term success of the mortgage industry in the UAE. This has been highlighted in a number of independent market research studies recently which are all pointing towards a recovery.'