UAE gov't to recapitalise Tamweel, Amlak

UAE mortgage lenders Tamweel and Amlak will be recapitalised with funds from the federal government and will unveil their new corporate structure within a few weeks, the Tamweel chairman said on Tuesday.

After the new structure has been unveiled, lending will “follow suit”, Sheikh Khaled Bin Zayed Al Nahyan told reporters on the sidelines of the Institutional Investor Forum in Abu Dhabi .

The two companies will be recapitalised with money from the federal government and will not use funds from Dubai ’s $10bn bond sale to the UAE central bank.

“I don’t know what the structure is going to be,” he said about the two companies' future structure.

“We gave our feedback and now we are waiting for the final decision.”

Sheikh Khaled said he believed the UAE real estate market had bottomed out.

“I think we have already seen the bottom of the real estate market because banks are coming back to lend, which means that they are comfortable with these levels.”

House prices in Dubai plunged 41 percent in the first quarter of 2009, according to Colliers International.

The consultant blamed the decline on lack of mortgage availability, poor investor sentiment, job losses among expatriates, and delayed projects.

Earlier this month HSBC reduced the minimum salary required to get a personal loan in the UAE to AED10,000 ($2,723) from AED20,000, in a sign that liquidity is returning to the banking system.

Skeikh Khaled said the number of mortgage defaults at Tamweel was very low.

“Very low means one to two percent,” he added.

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