Labuan International Business and Financial Centre unveils 5-year strategic roadmap
Published on: Friday, June 17, 2022
By: Bernama
PUTRAJAYA: The Labuan International Business and Financial Centre (Labuan IBFC) unveiled its five-year Strategic Roadmap 2022 to 2026, aimed at transforming it into a dynamic and sustainable international centre that links and supports the economic growth of Asia’s markets and contributes to the national economy.Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said as Labuan IBFC is linked to Malaysia’s financial system, the strategic roadmap will strengthen the centre’s linkages and complement other strategic plans like the Financial Sector Blueprint 2022-2026.
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“Labuan’s financial market has grown more than tenfold since its inception, from 80 regulated entities now we have 880 international and regional financial players today.
“As a truly internationalised and prominent centre, Labuan IBFC is now home to over 5,100 active companies from 125 countries, including some well-known financial institutions. What Labuan has to offer is unquestionably more exciting, cutting edge and relevant for today’s global financial markets, he said in his officiating address.
He shared that of the over 880 licensed Labuan financial institutions, 296 licensed entities represent the more matured sectors, comprising 67 banks and investment banks amassing a total banking asset of US$55.8 billion, and 229 insurers and insurance intermediaries with total premiums underwritten worth US$2 billion as at the end of last year.
To keep Labuan IBFC ahead of the curve, he said the centre has nurtured and promoted the development of innovative business solutions not only as a game changer to move away from traditional business offerings, but also as a means of building the centre’s unique offerings and branding within Asia.
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“Labuan captive, too, has grown in prominence in the global insurance space. It has become the centre’s second largest insurance segment, with gross premiums of US$569 million, more than 60 per cent of which came from international markets,” he noted.
Tengku Zafrul highlighted that Labuan IBFC’s shariah compliant sector has also proven its ability to expand and innovate with the centre adding two more Islamic banks in 2000 to 18 as at end-2021, with total Islamic banking assets of US$1.9 billion. Similar trends can be seen in the takaful sector, which contributed US$117.4 million, he said.
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“These developments have been made possible by our commitment to establishing a strong legislative and regulatory framework that adheres to international standards.
“The centre must build on its good track record of success, and take its competitiveness to the next level through business innovations and forward-thinking strategies,” he added.
He also envisaged an increasingly significant role for Labuan as a fund raising and investment hub in the global digital space that is shariah compliant and underpinned by a comprehensive set of laws and regulations.
“The strategic goal is to attract more digital asset and fintech players to Labuan, as well as to carve out a niche in the digital Islamic finance space,” he said.
To achieve the desired objectives, Labuan IBFC said the strategic roadmap has outlined five strategic thrusts that will drive and expand the business frontier, as well as upscaling the regulatory and supervisory capabilities of the centre.
These include increasing market innovations and vibrancy by revitalising niche and prospective business sectors through digital solutions, to promote market facilitation and visibility, to enhance Labuan IBFC’s complementary roles to Malaysia, to implement relevant and proportionate regulations through ongoing upscaling of the prudential regulatory and legal framework as well as undertaking pre-emptive supervision and enforcement, Labuan IBFC said.
Meanwhile, Labuan Financial Services Authority (Labuan FSA) chairman Datuk Siti Zainab Omar in her welcome address said that in view of emerging challenges, changing market trends, and the need to remain innovative and competitive, a clear strategic plan is important to lay out the game plan and align all those involved.
“With clarity of vision and purpose, Labuan IBFC will be able to make great strides for the benefit of all participants, strengthening established market sectors while creating new niches and opportunities. Looking ahead, the prospects of Labuan IBFC will remain favourable and yet challenging.
“With the continuous support of the government, in particular the Ministry of Finance, Bank Negara Malaysia, Securities Commission Malaysia, Companies Commission of Malaysia, Attorney General’s Chambers, Inland Revenue Board and Labuan’s financial community, we are confident that the future will see further expansion in the activities of the Labuan IBFC,” she added.
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