Amlak boosts profit growth outlook

EARNINGS SURGE: Amlak's 2008 profit is expected to grow at least 80%, Al-Shaikh said. (Getty Images)

Islamic mortgage firm Amlak Finance on Sunday lifted profit forecasts for the year to at least 80% growth as lower interest rates boosted its mortgage business and widened spreads.

Amlak Chairman Nasser Al-Shaikh had told newswire Reuters in February that profit at the Dubai-based lender would grow by at least 70%.

"We will easily surpass that," he said in an interview on Sunday, putting a floor of at least 80% growth. He was speaking to Reuters ahead of a World Economic Forum (WEF) conference.

He said the spread between its lending and borrowing rate had widened to between 2.5 and three percentage points compared with one percentage point nine months ago.

Last month, Amlak posted its second-biggest quarterly profit ever as income rose more than five-fold driven by mortgage sales and property investments. Net income rose to 126 million dirhams ($34.31 million) compared with 23.8 million dirhams in the year-earlier period.

Profit at Amlak, the UAE's first mortgage company, more than doubled last year to 301 million dirhams, helped by the sale of investments in listed companies, the firm had previously said.

Amlak shares closed up 0.21% on Sunday on a negative day for the Dubai benchmark index. The stock is up 20% this year, outperforming the broader index which is up 7.7% on the year.

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