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Tue 3 Apr 2007 10:56 AM

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Dubai Holding to sell mortgages

'Dubai First' will offer credit cards before embarking on the home loans market.

Dubai Holding has launched its first consumer finance company, Dubai First, which will initially offer credit cards and then home mortgages and other financial services.

Dubai First - a subsidiary of Dubai Financial and under Dubai Group - has a AED 1 billion ($272 million) authorised capital and paid-up capital of AED 350 million ($95 million).

The company's corporate officer Ibrahim Al Ansari said there are 2.5 million credit cards in the country and the number is growing 25% annually, according to Gulf News.

Earlier this year the company acquired Dubai Bank's credit card portfolio of 80,000 cards - a 3.2% share of the local credit card business - with a credit amount of AED 180 million ($49 million), Al Ansari said.

'The Dubai First credit card is the only credit card to offer free life insurance, free household insurance, free 365 days purchase protection, privileged discounts on the e-gate card and much more,' he added.

'There is a strong need for an integrated consumer finance company in the UAE and the region,' said Sayanta Basu, CEO of Dubai Financial.

'Market research shows the UAE's retail loans are valued at approximately 16% of the GDP. Other GCC countries including Kuwait and Bahrain stand at 25%. This is very low as compared to more developed countries such as the US, where total retail lending is 105% of GDP. This indicates the immense potential of our business.'

Al Ansari also said that Dubai First plans to enter the mortgage market by September. According to Gulf News, Amlak and Tamweel together control more than 60% of the UAE mortgage market, while the rest is shared among commercial banks.

On Sunday, the UAE's current largest mortgage lender Amlak Finance said the UAE Central Bank had

rejected a request

for an Islamic banking licence, declining to comment on why the application was rejected.

Amlak has followed parent-company Emaar Properties in expanding abroad due to soaring competition in the UAE property market. The two companies still share a strong relationship despite last week's announcement that Emaar chairman Mohammad Alabbar was stepping down from Amlak's board.

Last month Emaar issued 2.364 billion new shares to Dubai Holding - the government's investment arm, and the parent company of Dubai First -

in lieu of land

, granting the conglomerate a

28% stake

in the property giant.

"It effectively gives the government of Dubai, in its different entities, control of the company," Tamer Bazzari, director of Dubai-based Rasmala Investments, told Gulf News last month.

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