Dubai-based Islamic mortgage lender Tamweel said it plans to expand into India, Morocco and Turkey, and expects to turn a profit from Egyptian and Saudi operations next year.
“In Egypt and Saudi Arabia, it is all approved and we are just setting up,” Chief Executive Officer Adel Al Shirawi said on the sidelines of the World Economic Forum annual meeting in the Davos ski resort. “We will start to earn there in 2009.”
To fund its rapid expansion, Al Shirawi said the firm aimed to raise capital by all means possible, including debt, issuing sukuk or Islamic bonds, and through the listing of its local units.
“We will keep a majority stake,” he said. “[We] will diversify risk through regionalisation but will remain focused on mortgages.” He also aims to securitise portions of the group’s mortgage book once it grows further, possibly as soon as 2009, he said.
“We’ve been doubling it every year so why should we stop?” he asked. “If you more than double it, you’re going to get into a non-quality book,” said Shirawi.
Tamweel recently sold $300 million (Dh1.1 billion) in convertible Islamic bonds, which comply with Shariah and offer investors a share of profits from underlying assets instead.
Rival Amlak Finance delayed a sale of Islamic bonds planned for the fourth quarter because of the fallout from the credit crisis triggered by United States mortgage defaults.
Al Shirawi, however, said the turmoil in Western markets had benefited his business, as falling US interest rates widened the gap between the price at which it borrrows and lends to home owners, improving the earning power of Tamweel’s mortgage book.
Demand for mortgages is surging in the UAE, where Dubai kicked off the Gulf real estate boom in 2002 by allowing foreigners to invest in property. (Reuters)
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