National Bank of Fujairah on the fast track

National Bank of Fujairah expects a busy year ahead as the bank seeks to tap into booming investment in the emirate's energy infrastructure.

Business in Fujairah is expected to be bolstered by the completion last year of the Abu Dhabi Crude Oil Pipeline. Above, an oil terminal in the emirate. Courtesy IPIC

Shipping and rail links are expected to help National Bank of Fujairah keep racing ahead this year as the emirate benefits from an investment boom in its energy industry, the bank's chief said.

With a major oil pipeline established, energy facilities receiving funding and rail links expected between Fujairah and its neighbouring emirates, there were plenty of opportunities for the bank to grow its loan book in the year ahead, said Vince Cook, NBF's chief executive.

"As the facilities themselves come up, a lot of infrastructure needs to be built," he said. "We've got more critical mass, and we'll see the volume of trade flow through Fujairah increase on the back of those."

Fujairah is the world's third-biggest fuel bunkering hub after Singapore and Rotterdam and has been a beneficiary of the UAE Government's measures to increase infrastructure spending in the Northern Emirates.

Fujairah is "an early beneficiary of the rail project - the rail line is intended to go from the port … and straight out into the Emirates through the mountains," Mr Cook said.

The bank expects to expand its business in the emirate through the construction of a branch overlooking the new rail links and hopes to increase its branches in Abu Dhabi.

Business in Fujairah is expected to be bolstered by the completion last year of the Abu Dhabi Crude Oil Pipeline, which pumps oil overland to the east coast, allowing fuel shipments to leave the Indian Ocean in case of a blockade of the Strait of Hormuz.

Iran has repeatedly threatened to blockade the waterway, which is a chokepoint in the Arabian Gulf's energy supplies to Asia.

Oil companies invested in Fujairah's refuelling and storage facilities include the Abu Dhabi National Oil Company, Emirates National Oil Company and Socar, Azerbaijan's state oil company.

Saudi Aramco, the kingdom's national oil company, said this week that it had leased at least 1 million barrels of storage space at Fujairah's port to support its trading operations, Reuters reported.

"Aramco Trading will use the fuel storage facility to optimise its trading portfolio as parent Saudi Aramco's downstream investment portfolio expands in the kingdom and overseas," the company said.

"The wider spin-off [benefit] is the announced refinery and other related energy projects, such as the regasification facility," Mr Cook said, referring to a planned terminal for the import and export of liquefied natural gas due to open next year.

NBF plans to grow its loan book in specialised industries where it has expertise, such as shipping, where it has appointed a new head of marine. "We've continued to upgrade our capacity and abilities in more specialised areas," Mr Cook said, adding that he saw little incentive for the bank to enter other international markets where it lacks the resources to compete with established lenders. "It doesn't make a great deal of sense for someone of our size."

NBF reported net income last year of Dh305.8 million (US$83.2m), an increase of 8.9 per cent compared with a year earlier. Loans and advances grew by 16 per cent, and although the bank does not release forecasts for the year ahead, it expects a consistent level of growth this year.

"We're not seeing brand-new difficulties coming into the business," Mr Cook said. "What we're seeing is old difficulties gradually becoming resolved."