dubai: Tamweel, the Dubai-based mortgage lender whose shares were suspended in November 2008, returned to profit after posting three quarters of losses.

Third-quarter profit was Dhs10 million ($2.7 million) compared with a profit of Dhs185.7 million in the year-earlier period, the company said in a statement to the Dubai bourse. Tamweel posted a combined loss of 188 million dirhams in the three quarters ended June 30.

"In light of adverse market conditions, tight liquidity and falling real-estate market, Tamweel has taken additional prudential provisions of Dhs53 million for potential delinquencies on its asset book and to offset the decline in market value of its property investments," it said in the statement. Third-quarter operating profit was Dhs63 million before provisions.

Tamweel, which complies with Islamic banking rules, was the United Arab Emirates' second-biggest mortgage lender by market value before the global credit crisis blocked its access to new funding. The federal government suspended its shares and said it will merge it with Amlak Finance PJSC, another mortgage lender, and provide new funds for the two companies.

"The company has continued to manage its existing asset book, while it awaits final restructuring proposals from the steering committee appointed by the federal government," Tamweel said in the statement. Islamic financing and investment assets were at Dhs10.4 billion at the end of September.

The UAE government plans to invest as much as Dhs3 billion in a proposed merger of Tamweel and Amlak, Tamweel's Chairman Sheikh Khaled Bin Zayed Al Nahyan said on Nov.20 at the World Economic Forum in Dubai. The company's default rate is 3 per cent and "becoming lower," he said.

Bloomberg