KUALA LUMPUR: The Labuan Financial Services Authority (Labuan FSA) reported a 21-fold surge in the market value of syariah-compliant security tokens (RAMZ) to US$1.05 billion (RM4.53 billion), supported by the launch of the Islamic Digital Asset Centre as a landmark initiative in Islamic digital finance.
Labuan FSA director-general Nik Mohamed Din Nik Musa said the growth reflects the emergence of technologies such as artificial intelligence and blockchain, as well as a shift towards digital tokenisation for cross-border investment and fundraising.
“Labuan International Business and Financial Centre’s (IBFC) innovation was also recognised as the Best International Jurisdiction for Islamic Banking and Finance 2024 by the Global Islamic Finance Awards. Its appeal is expected to strengthen further following the new tax exemption introduced for Labuan digital takaful operators in October 2024,” he said at the unveiling of the Labuan IBFC Market Report 2024.
He said Labuan’s captive insurance segment expanded by 16% in terms of newly licensed entities and 24% in the establishment of new cells, the highest since 2019.
“This growth was driven by new lines of business such as workers’ compensation and professional indemnity coverage. The segment posted revenue growth of 8.5%, recording the highest gross premiums in five years at US$677.4 million. Non-Malaysian insurance business contributed 58% of the portfolio, mainly from the Asia-Pacific and Far East regions, cementing Labuan’s position as the second-largest captive insurance market in Asia.”
He said Labuan IBFC also saw more than a twofold increase in new oil and gas leasing assets to US$815.9 million.
“The leasing sector continued to grow, with aircraft leasing remaining the primary driver, contributing over 60% of total leasing assets at US$36.8 billion. Subsequent leasing transactions spurred revenue growth of 69.3% and profit growth of 152% to US$654.6 million.
“Company registrations also maintained upward momentum with a 9% increase to 627 new registrations compared with 575 the previous year. Over 60% of Labuan companies originated from Asia and the Pacific, reinforcing the centre’s position in the region.”
Nik Mohamed Din said Labuan companies recorded more than a twofold increase in new oil and gas leasing assets to US$815.9 million.
“The leasing sector continued its growth, with aircraft leasing remaining the key contributor, making up over 60% of the total leasing assets worth US$36.8 billion. Follow-on leasing transactions drove a 69.3% increase in revenue and a 152% jump in profit to US$654.6 million.
“Meanwhile, Labuan’s capital market expanded in line with strong demand for fund management and digital financial solutions. The Labuan fund management segment posted more than a threefold increase in profit, driven by higher professional fee income. In tandem, the securities licensee segment nearly tripled its revenue to US$9.6 million,” he said.
In addition, trust and corporate service providers’ revenue rose by nearly one-third to US$40.8 million, while profit increased by 86%, driven by robust income growth.
Beyond financial performance, Nik Mohamed Din noted that Labuan IBFC’s growth has positively impacted the Labuan economy through job creation.
“Throughout the year, the licensed financial sector in Labuan recorded a five-year high in employment, reaching 5,006. This reflects the economic stimulus effect from the implementation of economic substance requirements introduced since 2019,” he said.
