Amlak Finance, the real estate investment and home loans provider, announced on Monday that full year net profits through Dec 31 2008 slipped to AED241 million, from AED301 million in 2007.Much of the damage was caused by an AED204 million loss in Q4 2008, mainly as a result of a drop in revenues from the previous quarters as well as a sharp fall in income from real estate investment activities, lower new mortgage originations, a significant increase in funding costs and higher general provisions on its mortgage portfolio and other investments.
Last week the firm’s CFO, Max Hamidi, said it was experiencing more mortgage delinquencies in 2009 and that it will be 'very challenging' to manage going forward.
"The default on mortgages is growing and it will probably grow further," Hamidi told a conference.
Meanwhile, total assets as at the end of December 2008 stood at AED15.8 billion, up 67 percent compared to AED9.5 billion in 2007.
The company's financing portfolio increased from AED6.2 billion to AED10 billion during 2008 with a further AED2.8 billion of financing commitments extended to customers as at end-2008. The firm's real estate investments portfolio stood at AED6bn at year end.
Arif Alharmi, CEO, Amlak Finance, said: "Despite the financial turmoil that we all experienced in the latter part of 2008, we have managed to show good operational performance.
''I believe 2009 is going to be a challenging year given the current economic situation on the global and regional levels; however, we have been working toward revising our operational strategies to meet our customers' and other stakeholders' expectations."