Islamic mortgage lender Amlak made a first quarter net loss of AED69m ($18.8m) as it took provisions for mortgages on properties that are still under construction.
"This was one of the most challenging periods the mortgage industry at large has faced since Amlak's inception in 2000," said chairman Nasser Al Shaikh.
"While we have registered a growth in revenues from our retail mortgage portfolio as compared to the first quarter of last year, the net loss was primarily due to the prudent additional general provisioning that was made to cover any potential future portfolio losses. This provisioning was made due to the current challenging market conditions prevailing in the real estate market.”
In anticipation of a federal government decision on the future structure of the company, Amlak said it has decreased its real estate investment obligations by renegotiating “a number of deals that will ensure better operational performance in the long term”.
The company’s total assets stood at AED14.9bn at the end of March, which was 23 percent higher than at the end of the corresponding period last year.
The financing portfolio grew 42 percent to AED9.8bn in the same period.
A government committee has been reviewing the future of Amlak and Tamweel, the largest mortgage lenders in the UAE, since November, when shares in the companies stopped trading.
The chairman of Tamweel, Sheikh Khaled Bin Zayed Al Nahyan, said in May that a decision was expected within weeks.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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.