No 'profit' charge for construction delay unless specified: Tamweel

Tamweel, the Islamic home mortgage, is receiving adequate funding from Dubai Islamic Bank (DIB) to support its business growth, as it focuses on booking high-quality portfolio of select customers and properties.

“We are receiving adequate funding to support our business growth,” company’s interim CEO Varun Sood told Emirates 24/7 in an emailed reply. No figure of the loan amount was revealed.

In September, DIB increased its shareholding in Tamweel to 57.33 per cent, making it the largest single shareholder in the company. The bank’s Chief Executive Officer Abdullah Al Hameli has said they would pump fresh funds into the mortgage company to revive its business.

Tamweel, which resumed its core activity of home financing earlier this month, is currently focusing on ready properties and will assess “near ready” projects with good potential in the second phase.

Excerpts

- Are Tamweel customers being charged profit during construction for the entire period of delay of the project?

We are charging only what has been committed with the client at the time of signing of the contract, unless contract provisions allow for an additional profit up to a maximum defined in the contract.

- How many loan applications have you received since you started accepting new applications this month?

We have received an encouraging response to date from potential clients whose financing needs are in line with our focus on booking a high-quality portfolio of select customers and properties.

- How much business do you expect to generate every month compared to when you closed accepting mortgage applications earlier?

While there we have received a significant number of new applications, we are not in a position to share precise figures. Further, any comparison between current and historical figures in this regard may be misleading - as conditions in the sector have obviously changed dramatically over time.

- Are you restricting home loans to projects that are under construction across the UAE or have any new projects been added?

We have a number of tie-ups with developers in UAE and we will continue to leverage these relationships. While our current focus is on ready properties, we will evaluate nearly ready projects with good potential for the extension of finance in the second phase, based on our credit risk guidelines.

- Are you looking to be part of the Tayseer programme, introduced by the Land Department of Dubai, to fund developers whose project are near to completion?

We remain focused on our core business of home financing.

- Have you changed your policy of paying developers as per construction milestones, or you still paying as per the terms of sales and purchase agreements?

Our policy is to pay based on mutual arrangements agreed with the developer or construction milestones as approved by Real Estate Regulatory Agency.

- What is the default ratio and have you repossessed any properties?

While we cannot share any precise figures in that regard, we are focused on contributing to the stability of the UAE real estate market, which is why we are so pleased to re-launch our home finance solutions.

- What is the loan amount that Tamweel has received from DIB?

We are receiving adequate funding to support our business growth.

- According to DIB financial statement, Tamweel acquisition will be completed by year-end. Will Tamweel shares be traded on the Dubai bourse from 2011?

As mentioned at our recent annual general meeting, this is a matter for the new board to consider in conjunction with relevant regulatory authorities, which are the ultimate arbiters in this regard.

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