KUALA LUMPUR: The Labuan International Business and Financial Centre (Labuan IBFC) recorded a 12.3% growth in new companies registered in Labuan for the financial year ended Dec 31, 2014.
Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said a strategic connectivity with Asia, greater trade and investment linkages had supported an expansion in Labuan’s business activities.
“Greater awareness of the value proposition of Labuan IBFC is reflected in a double-digit growth in registration of Labuan companies, continuous growth in the registration of foundations, and outstanding growth in the establishment of international commodity trading companies,” she added.
Zeti was speaking at a press conference on the release of the Labuan Financial Services Authority (FSA) Annual Report 2014 here on Tuesday.
With the underlying theme,”Labuan: Connecting Asias Economies”, the report covers the performance of the Labuan IBFC industry for 2014 as well as that of the Labuan FSA.
It also highlights the strategies undertaken to develop the Labuan IBFC.
Zeti said the commendable growth rate with increasing linkages within Asia had translated into a 12.3% growth in registration of new Labuan companies and 70%, originated from Asia.
Labuan FSA reported that there were 11,630 Labuan companies registered in FY2014 compared to 10,352 in FY 2013.
Two new banking licences were granted, one to a bank from the United Arab Emirates and the other, from China.
“Labuan banks cross-border lending grew to US$32 billion with 76% of total loans and advances contributed by foreign borrowers from ASEAN countries.
“Overall, Labuan banks remained strong, financially stable and adequately capitalised with an industry average risk weighted capital ratio of 31.6%,” it said.
The increasing demand for Islamic finance in Labuan saw Islamic financing grow by 28% from US$775.6 million to US$993.3 million.
There were 18 new insurance and insurance-related licences approved in FY2014 with the majority originating from Asia.
Labuan’s leasing assets also increased to US$45.5 billion with 73% from the oil and gas industry, reflecting its strategic location as a financing hub for the business.
Labuans comprehensive range of wealth management instruments for investment and protection continued to draw interest from regional high net-worth individuals.
There was an almost 40% increase in the number of Labuan foundations established in 2014 with 73% of the 130, originating from Asia.
Zeti said Labuan IBFC upheld high standards with a robust regulatory and supervisory regime and strengthened regional and international cooperation with home-host authorities.
“Labuan FSA continues to take significant steps to further strengthen its supervisory and regulatory regime in line with global standards. This includes strengthening of prudential standards with a focus on corporate governance and risk management.
“Regulatory and prudential standards on anti-money laundering and counter terrorism financing continued to be enhanced,” she said.
Zeti said Labuan FSA made significant strides to conform to international standards, with the OECD Global Forum according Malaysia and Labuan IBFC, a rating of “Largely Compliant” under the Global Forum Phase II Peer Review on transparency and exchange of information.
“This reflects the commitment of Labuan FSA towards collaboration in international tax policies and developments,” she added.
For the financial year ending Dec 31, 2014, Labuan FSA recorded an increase in operating income of RM52.7 million compared to RM39.9 million in 2013, while total reserves also increased from RM39.2 to RM52.4 million.
