Labuan Ibfc Thriving Amidst Global Recovery

KUALA LUMPUR, April 26 (Bernama) -- As the global economy charts a course toward recovery in 2024, the Labuan International Business and Financial Centre (Labuan IBFC) stands resilient, buoyed by a surge in financial activities and robust performance across sectors.

Labuan Financial Services Authority (Labuan FSA) director-general Nik Mohamed Din Nik Musa said Labuan solidified its position as a leading captive centre for Asia, reporting a record gross premium of US$624.6 million and attracting eight new captive establishments in 2023, garnering international recognition for its regulatory framework and innovative structures. (US$1=RM4.77)

“Labuan IBFC’s global prominence as a well-recognised captive market, with the conferment of Highly Commended Captive Domicile by European Captive Review Awards 2023 in Luxembourg and ranked as top ten in the World Domicile Update by Captive Review 2023, reaffirms its international recognition and appeal,” he said during the unveiling of the Labuan IBFC Market Report 2023 here today.

Nik Mohamed Din said trust companies also experienced a remarkable turnaround, with profitability tripling to US$11.2 million, driven by a 31 per cent growth in total income fuelled by increased company incorporations. 

“Furthermore, Labuan’s financial exchange sector showcased digital innovation, with the issuance of four shariah-compliant securities tokens (RAMZ) totalling US$50 million listed on its digital exchanges,” he said.

Nik Mohamed Din said Labuan IBFC’s global prominence and appeal were reaffirmed by recent accolades, including the Highly Commended Captive Domicile award from the European Captive Review Awards 2023 and a top-ten ranking in the World Domicile Update from Captive Review 2023.

Meanwhile, the Labuan FSA director-general said the Labuan IBFC Market Report 2023 highlighted significant milestones achieved by Labuan IBFC throughout the year, notably marked by an eight per cent growth in new company incorporations.

He said the Asia-Pacific region emerged as a key driver, with a remarkable 14.9 per cent surge, led by incorporations from Singapore, Indonesia, India, and Pakistan.

Nik Mohamed Din said profitability soared in the banking sector, with a staggering threefold increase of 322.5 per cent, amounting to US$589.7 million, and return on assets was four times higher at 1.2 per cent. 

“This is underpinned by prudent asset management practices and a favourable interest rate environment,” he said. 

He said the sector’s net interest income reached a decade-high of US$2.7 billion, with Labuan attracting new banks from the Middle East and the Pacific region; specifically, this entailed two investment banks from Dubai and Vanuatu.

“The insurance industry also witnessed unprecedented growth, with total premiums reaching US$2.7 billion, and underwriting profitability posting a historic US$456 million increase post-COVID,” he said.

“The non-Malaysia business portfolio contributed a larger market share with insurance risks underwritten primarily from the Asia-Pacific markets and the Far East region,” he said.

Nik Mohamed Din added that Labuan FSA remains committed to fostering collaboration with governmental and domestic bodies to capitalise on emerging business prospects within Labuan IBFC, leveraging its diverse array of financial solutions and structures.

-- BERNAMA