LABUAN, June 30 — Labuan International Business Financial Centre (Labuan IBFC) experienced quite a good year in 2019, with both the banking and insurance sectors recording positive growth, said Labuan Financial Services Authority (Labuan FSA) director-general Datuk Danial Mah Abdullah.
“The achievement in 2019 was no different from the past year... There was still growth…. In fact, for the banks, their profits went up by about 27 per cent whereas insurance companies saw their profits rise by about 43 per cent.
“So, you can see from the figures that 2019 has been quite a positive year for these two sectors in Labuan IBFC. But of course, we are not only in banking and insurance activities.
“There are a lot of other activities as well in Labuan IBFC—for example, the secretarial businesses, the trust companies. They also have been doing well,” he said in a statement, presented in an interview format, in conjunction with the 30th anniversary of Labuan IBFC.
He said the other activities which had been doing well included money broking and investment banking.
“There are a couple of sectors that may have been a bit more challenging, like for the leasing sector. That’s because of the situation that this industry had been experiencing in 2019.
“Overall, we have been doing well. Malaysian business continued to go down and non-Malaysian business had been up. And that’s natural because Labuan IBFC has always been focusing on the regional businesses,” he said.
Mah said the focus particularly on the Asian region was due to the location of Labuan, which is right in the middle of the Asia-Pacific region.
“In terms of Malaysian and non-Malaysian businesses, we can say about 60 per cent are non-Malaysian,” he said.
He said since the Labuan IBFC’s establishment in 1990, it had seen a sustainable growth pattern with a lot of changes over the years through the amendment of laws, regulations and guidelines.
“But the key thing is that we will continue to focus on wholesale business. We do have some retail business but that’s not our focus. Even for our banks, it’s all about corporate banking, commercial loans and stuff like that.
“Even the insurance side is all about reinsurance. Something that we have been seeing in our reinsurance sector is the growth of this captive industry and that has always been our focus over the years. We will continue to focus on those areas of businesses which I think are more suitable for us,” he said.
Mah said the Kuala Lumpur financial sector had also been making its presence felt, and there was a need to complement each other, rather that competing against one another.
“So, focusing on something which is wholesale, which is more institutional, is a better choice for us. It’s a better strategy for Labuan. Being located strategically in this part of the world has helped Labuan IBFC, as can be seen from the pattern of growth that we have in Labuan,” he said.
On companies coming from other regions of the world and doing intermediations like from China to Indonesia, or China to Singapore, he said that would be the Labuan IBFC’s role as it had been doing intermediation all this while.
“We have done that quite effectively, and the reason why we have done it quite effectively is really because of, firstly, the laws and regulations that we have in place that are suitable for this.
“We adopt a proportionate approach in terms of how we supervise our institutions. Because we do not do a lot of retail businesses, therefore we can have a more proportionate way of regulating these institutions.
“The other reason is the presence of so many types of players in Labuan. We have a whole spectrum of financial players to cater to all the needs of customers from various countries,” he said. — Bernama
