Dubai-based Islamic mortgage lender Amlak Finance posted a 22 percent rise in attributable net profit for 2014 on Wednesday as gains from its debt restructuring offset write-downs in its property portfolio.
Amlak's net profit attributable to equity holders rose to 58.9 million dirhams ($16 million) in 2014 from 48.2 million dirhams a year earlier, according to its financial report announced on Dubai's bourse.
The company signed a $2.7 billion debt and financing restructuring deal with creditors last November after protracted negotiations since its shares were suspended in November 2008 in the wake of the global financial crisis and a local real estate crash.
Amlak's auditors noted in the statement that the firm had not adjusted the value of its property portfolio between 2009 and 2014. This was a period where property prices initially slumped significantly in the emirate before rebounding in the last two years.
When addressed as of Dec. 31, 2014, Amlak was forced into booking a 2.1 billion dirham fair value loss on the portfolio, the financial statement said.
However, Amlak also reported 1.9 billion dirhams in gains from fair value adjustments on a mudaraba instrument linked to its restructuring deal, investment deposits and other Islamic financing.
Under a mudaraba structure, assets are managed by a bank on behalf of clients, with income and expenses shared under a pre-agreed ratio.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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