Labuan IBFC maintained its role to intermediate regional business and investment, driven by Asia's continued economic growth
The strengthening of the global economic recovery and increased market confidence in 2017 have fueled the growth momentum of Labuan IBFC in the regional landscape. Despite the slight business moderation in the key market segments of banking and insurance, the growth trajectory of the Centre remained positive.
LABUAN IBFC SECTORAL BUSINESS PERFORMANCE
Labuan Companies: Increased company incorporations
In tandem with the rebound in global economy, new company incorporation achieved commendable growth of 19.1% or 941 new companies as compared to 790 companies in 2016. This reflects the increased interest for investments and business setups in Labuan IBFC, mainly from the Asia Pacific region. Notwithstanding this, other regions showed marked growth, depicting increase in the geographical spread of market interest for Labuan IBFC.
Number of Registered and Operating companies
Banking Business: Banks remained sound with increased capital buffer
In 2017, the number of banks increased to 54, an increase of 5.9% over the previous year. The growth is reflected by a heightened interest in the investment banking sector, in line with the growth in the regional wealth management activities. The year under review also saw a moderate performance by the banking sector with greater focus on the overseas business. Non-resident financing, particularly from the ASEAN countries, contributed almost 70% of the industry total loans comprising both conventional and Islamic lending.
The assets, comprising mainly loans and advances contracted marginally by 0.5% to USD50.7 billion during the year. Nonetheless, there was a significant hike in Islamic financing by 61.6% due to increased demands for shariah compliant financing.
Total Assets and Number of Banks in Operations
Deposits and Loans by Country
While Labuan banking profitability moderated in 2017, the industry remained resilient and well capitalised. The shareholders' fund increased from USD2.8 billion to USD3.3 billion in 2017. As a result, the risk weighted capital ratio (RWCR) of the industry stood at 37.9% as compared to 35.7% in 2016.
Riding on the current global economic recovery, Labuan banks are expected to grow and expand their businesses and innovate their product offerings, opportunising on the financial technology advancements.
Insurance Business: Increased premiums