Dubai's Amlak swings to Q3 profit of $1.6m

Dubai Islamic mortgage lender Amlak returned to profit in the third-quarter, helped by the sale of investment properties and lower impairments for financing and investment assets.

Amlak made a net profit of Dh5.99 million ($1.63 million) in the third quarter, it said in a statement, compared to a loss of Dh45m in the same period in 2009.

The company made a net profit Dh2.26m in the first nine months of the year compared with a loss of Dh178.56m in the same period last year.

Income from the sale of investment properties was Dh108,000 for the quarter against a loss of Dh23m in the same period last year, it said in the statement.

The mortgage lender reported an impairment of Dh17.7m for financing and investing assets in the three-month period, down from Dh44m last year.

In September, Dubai Islamic Bank raised its stake in rival Islamic mortgage firm Tamweel to 57.33 per cent, in a move that will help revive lending in Dubai's property market.

The United Arab Emirates government said in November 2008 it intended to merge both Amlak and Tamweel. Shares in the two have not traded since.

The long-planned merger has likely been scrapped as a result of the Tamweel deal, Tamweel's chairman told Reuters earlier in October.

Amlak will need new options to resume lending and to trade as a listed company. A bank takeover is the most likely scenario although any bank that would look to take on Amlak would have to be cautious about the quality of Amlak's real estate investments, analysts said.