Islamic mortgage lender Amlak Finance on Monday announced that it made a net profit of AED87.4 million in first six months of 2016, compared to AED14.6 million for the same period last year.
The results were supported by strong revenue growth in the first quarter of the year generated from one-off sale of land plots, the company said in a statement.
The results were also impacted by increased provisioning in Q2 caused by a number of customer accounts becoming delinquent as well as a general fall in real estate prices against mortgage assets giving rise to a reported net loss of AED35.5 million in the second quarter of 2016.
Amlak said total revenue reached AED465 million in H1 compared to AED214 million in the year-earlier period.
The company recorded a total impairment charge of AED29.7 million recognised from non-performing accounts in H1, with AED24 million in the second quarter.
Total assets stood at just under AED6.8 billion, representing a 2 percent decrease from the same period last year.
Arif Alharmi, managing director of Amlak said: "Our overall H1 profitability remains strong. We reported strong results in Q1, however the second quarter’s operating performance was impacted by the higher than anticipated provisioning in Q2. We follow and strictly abide with a prudent provisioning policy to reduce balance sheet risk and enhance financial reporting transparency to the highest levels.
"Additionally, despite a marked slowdown in the real estate market particularly during the summer season, we anticipate making further sales and recording additional income in the remaining part of 2016," Alharmi added.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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