UAE infrastructure boom boosts equipment finance demand

12 November 2014

National Bank of Fujairah CEO eyes opportunities  

The development of major infrastructure projects across the UAE is opening up opportunities for banks to provide equipment financing, says National Bank of Fujairah’s (NBF) CEO Vince Cook.

The bank opened its dedicated equipment finance unit in the third quarter, and Cook says the unit has so far financed in excess of AED50m ($13m).

Large-scale projects being developed in Dubai and elsewhere in the country are providing NBF the chance to finance smaller contracts covering the supply of equipment to contractors involved in the developments.

“This approach gives us a whole new group of people to talk to, as we can now provide something useful to US or Asian multinationals, supporting their sales process, as their customers in the UAE are our core customers,” Cook tells MEED.

“We are involved in some of the larger infrastructure projects in the UAE, including the Dubai Canal project because of the need to provide equipment,” he adds.

The canal project is set to link Dubai creek with the Arabian Gulf through a 3-kilometre waterway.

Equipment finance in the Gulf region has often been provided via non-bank entities set up by private companies, but Cook says there is room for banks.  

“Non-bank entities don’t have the leverage or capacity the banks have, so their growth is restricted,” he says.

NBF has been developing several new products this year, and opened an Islamic finance window in the second half of the year. 

The bank’s trade finance business is also being expanded, and revenues are forecast to grow by 30 per cent by end of this year, compared with 2013.

Most of the bank’s activities are focused on short-term financing, with its long-term lending mainly focused on Fujairah itself.

Fujairah has a number of large projects in the pipeline, including a new refinery, a housing project called Mohammed bin Zayed City, and an expansion to Fujairah airport.

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