The UAE Islamic banking market is competitive to say the least, yet, in the short 12 months since its launch, NBF Islamic — the Shariah banking window of National Bank of Fujairah (NBF) — has managed to turn a profit and attract over AED1 billion (US$272.2 million) in deposits. VINEETA TAN speaks to the person driving the success of the business, CEO Vince Cook, and asks what else we can expect from one of the emirates’ youngest Islamic banking players.
NBF Islamic has been keeping busy. From developing new retail products to widening its customer base, the Islamic unit has also been hard at work enhancing its services to better capture the corporate and SME segment. “We have been busy integrating Shariah compliant services with our wholesale business; a good example of this being the Islamic tranche that we helped structure as part of a broader club financing for Pacific Controls, a client in the global information technology business,” shared Cook.
As with most Islamic windows, NBF Islamic draws strength and support from its parent bank — a long-established player with over three decades of experience in the banking landscape of Fujairah.
“Our status at Fujairah’s national bank provides us with a home ground advantage that manifests itself in everything from high brand awareness and preference to strong government and client relationship — factors that we actively leverage to stay ahead,” said Cook who further added that: “Most importantly, there is growing recognition for the value of the carefully segmented industry specializations we develop to understand our customer needs across a variety of targeted industry and business segments. The establishment of our Islamic banking services clearly adds to the breadth of the solutions we can provide.”
Yet, for all the lead that NBF has in its home market, it is interesting to note that operations in Fujairah only accounts for 20% of the bank’s total business. The bulk of the business comes from its pan-UAE network which stretches beyond its home emirate to the key business and trade hubs of Abu Dhabi, Dubai and Sharjah; and Cook expects NBF Islamic’s growth story to develop in a similar fashion with an immediate primary focus on the consumer banking as well as corporate and SME segments.
“Our focus in the coming months would be to scale up our commercialization efforts and seek customer feedback so as to improve on our product and service mix,” he said. And the bank is indeed constantly innovating. Earlier this month, in response to the growing sophistication of the banking market, NBF rolled out a dedicated unit – staffed by local female corporate bankers – to support emirati female business leaders and entrepreneurs.
“The increasingly crucial role that emirati business women play in the future of the UAE requires little explanation, and as a customer segment, it is certainly deserving of greater attention from the local banking sector,” commented Cook on the launch of NBF Elham.
With the bank surging forward in the retail and wholesale space, what then of capital markets?
“As regards the capital markets, we are already active as an investor and trader in the various market instruments, including Sukuk. However, we will want to build a broader distribution capability before we seek mandates for primary issues,” explained Cook. “I am sure this will happen in the years ahead but it is not an immediate priority.”
So it seems that while the Shariah window is still at a nascent stage, its progress is commendable and most certainly not only reflects on the parent bank’s strategy and execution, but also the opportunities available in the UAE Islamic banking market – despite the current global market turmoil.
“We have had a number of very strong years, so we are likely to see more moderate growth in the near future, but the UAE still represents great opportunity for many; it has developed an increasingly diversified economy and has built substantial reserves that will help it weather the current challenges.”
And with domestic Islamic assets expected to double to US$260 billion by 2019, Cook stands firm that there is enormous potential for the Islamic banking sector to thrive in the UAE.