KUALA LUMPUR: The Labuan Financial Services Authority (FSA) remained optimistic about its business growth outlook this year, driven by the initiatives that were set up for the federal territory for 2023.
Its director-general, Nik Mohamed Din Nik Musa, said digitalisation is also expected to continue its positive momentum this year, as more investors opted to digitise their businesses following the Covid-19 pandemic.
“We are not tied to any one economy, we operate in the international space, and I think with the increasing digital financial services (DFS) business where transactions can be done from anywhere around the world, it will help to shore up some of the other areas which may see a slowdown.
“We will push through with some of the initiatives that we have for 2023. Maybe it is a little bit too early to say what it is going to be like in 2023, but I am optimistic,” he told reporters after the launch of the Labuan International Business and Financial Sector (IBFC) Market Report 2022, here today.
The report showed that DFS remained the fastest-growing sector in Labuan IBFC, with 29 new approvals granted, bringing the total number of DFS to 111.
Meanwhile, the international commodity trading sector recorded the largest trading amount of US$51 billion (US$1=RM4.39), reflecting a significant growth of 31 per cent.
“Total commodities traded were mainly crude oil and liquefied natural gas (LNG), which grew by 40 per cent to US$48.3 billion, in tandem with recovery in global oil and LNG prices.
“This had significantly lifted the profitability of Labuan international commodity trading companies by 55 per cent to US$5.5 billion -- the highest profit recorded in five years,” it added.
The report noted that Labuan banks remained sound and resilient amidst challenging external headwinds to the banking industry.
“While the total industry loan portfolio contracted by 11.5 per cent due to settlement of loans upon maturity, the Labuan Islamic banking financing grew by 25 per cent to US$2.1 billion, of which Islamic financing constituted 10.2 per cent of the total industry’s loan.
“Islamic banking assets also showed healthy growth with a noticeable increase of 21 per cent to US$2.3 billion,” said the report.
Commenting on the report, Nik Mohamed Din said Labuan IBFC’s modus operandi offered a holistic financial solution in both conventional and syariah-compliant options and a niche solution in one convenient location, giving Labuan IBFC its unique position in Asia.
“The demands for greater transparency give Labuan IBFC the edge as Labuan FSA has always maintained a high regulatory and supervisory standard alongside its commitment to greater transparency.
“This reaffirmed the sustained investors’ confidence in the Labuan IBFC,” he added.
-- BERNAMA
