Dubai Islamic mortgage lender Tamweel swung to a net profit of Dh11 million ($3 million) in the fourth-quarter, helped by a reduction in funding costs. Tamweel made a loss of Dh112.3 million ($30.57 million) in the fourth quarter of 2008.

The firm's full-year net loss for 2009 was Dh54 million when compared to a profit of Dh460.67 million in 2008.

'Tamweel's operating results continue to be profitable in the fourth quarter of 2009, with a net profit recorded despite sizeable amounts set aside for prudential provisioning,' chairman Sheikh Khaled said in a statement on the Nasdaq Dubai.

Total impairment provisions carried on the books at the year-end was 408 million dirhams, Tamweel said. Islamic financing and investing assets in 2009 reduced marginally to 10.4 billion dirhams.

Last month, Sheikh Khaled said a planned merger between Tamweel and its peer Amlak was still possible in the first quarter as progress was being made.

Tamweel and Amlak have both been hit hard by the collapse of Dubai's once-booming property sector and shares in the two companies were suspended in 2007 and have not traded since.

The United Arab Emirates government said in November 2008 it intended to merge the two firms and has been working on a plan to restructure them.-Reuters