DUBAI - Islamic mortgage provider Amlak Finance, Dubai’s second-worst performing stock this year, said on Wednesday it had won approval to operate in Saudi Arabia as it expands abroad to reduce its reliance on the local market.
Amlak said in a statement it was joining with Saudi partners to create a company with share capital of 1 billion riyals ($266.7 million) with a 99-year licence.
Forty percent owned by Emaar Properties, Amlak expects profit this year to grow after agreeing with more developers to offer home loans for their projects, its chairman, Nasser al-Shaikh, told Reuters this month.
The company, Dubai’s first mortgage provider, posted its second-smallest quarterly profit in two years in the first quarter as higher costs and delays in property projects hit revenues. Net income dropped 35.4 percent.
Competition in offering mortgages has intensified since members of the United Arab Emirates, including Dubai and Abu Dhabi, opened their real estate sectors to foreign investment, triggering a property boom.
Amlak’s main rival, Tamweel , this month posted a near five-fold surge in first-quarter profit to 50.47 million dirhams, more than double what Amlak made in the quarter.
Amlak’s Egyptian unit will begin selling mortgages in June and become profitable next year, Shaikh said. It is also considering expansion into Syria, Morocco, Pakistan and Turkey, he said.
Shares of Amlak have surged 34 percent since they fell to a two-year low on April 26. They declined 1.61 percent on Wednesday