LABUAN: Amid a modest global economic recovery, Labuan International Business and Financial Centre (IBFC) achieved another year of growth, fuelled by robust business policies and continued intermediation.
This enabled investors to tap business opportunities in the Asean market, strategically positioning Labuan as the investment gateway to the region, said the Labuan Financial Services Authority (Labuan FSA) in its annual report.
While Labuan IBFC operates in a conducive business environment, Labuan FSA ensures that the laws and regulations governing the IBFC are in conformity with internationally recognised standards on transparency and sound regulatory requirements, and maintain a well-regulated environment for legitimate and genuine businesses to operate in.
The report stated that 836 new firms were incorporated for the year under review with more than 70 per cent of them originating from Asia.
This showed that Labuan IBFC remained a favourable destination for multinational companies looking to expand into Asia-Pacific markets, he said.
Two new banking licences were granted last year. The banks’ total deposit rose 17.9 per cent to US$10.8 billion (RM43.2 billion), signifying investors’ confidence in placing funds in Labuan IBFC.
Islamic financing increased by 55 per cent to US$1.8 billion from US$993.3 million a year before.
Non-residents dominated 77.3 per cent of total Islamic financing while the banking sector boosted its
pre-tax profit to US$620.6 million, up 34.6 per cent from 2014.
A total of 16 new insurance and insurance-related licences were approved, including entrance of insurance entities from the Middle Eastern countries of Qatar and United Arab Emirates, and Switzerland.
Overall, the Labuan insurance sector has a strong margin of solvency, 5.7 times above the minimum regulatory requirement and the industry capitalisation also increased to US$832.3 million from US$783.3 million, with 74 per cent dominated by foreign entities.
The capital market sector continued to grow with private fund size increasing by 0.9 per cent to US$12.3 billion. In geographical distribution, 58.5 per cent of the private funds originated from the Asean region.
The Labuan International Commodity Trading Companies sector also fared well with eight new approvals granted, bringing the total to 43. About 79 per cent of the companies originated from Southeast Asia.
For Labuan’s leasing business, 45 new companies and 60 subsequent leasing transactions were granted approval. Total assets leased grew to US$51.8 billion, where 73 per cent derived from the oil and gas industry and 25.2 per cent from aviation sector.
Wealth management remains one of the high growth sectors in Labuan IBFC with nearly 28 per cent increase in the number of Labuan foundations, bringing the total to 166.