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BUSINESS

Financial industry contributes 57 pct to Labuan GDP

03/07/2020 11:38 AM

By Jailani Hasan

LABUAN, July 3 -- The Labuan financial industry has contributed about 57 per cent to Labuan’s gross domestic product (GDP), being Malaysia’s international business and financial centre.

Labuan Financial Services Authority (Labuan FSA) director-general Datuk Danial Mah Abdullah said the contribution of the financial sector to the Labuan GDP has gone up quite a lot in terms of percentage since 2014.

“So that is the contribution for Labuan, if you talk about contributing to Malaysia, Malaysians going out to do investments overseas, they may use Labuan, whose role has always been intermediation,” he said in a statement in conjunction with the Labuan International Financial Business Centre’s (IBFC) 30th anniversary themed ‘Labuan IBFC: 30 Years of Intermediating Asia’.

Mah said having Labuan IBFC on the island was already a contribution with infrastructural development in place to cater to and support Labuan’s financial industry.

He said a lot of investments have poured in and Labuan IBFC by itself is the largest employer in the island.

“We employ close to about 6,000 over people…in the grand scheme of things, 6,000 may not be a lot, but you are talking about Labuan with just a population of slightly over 100, 000 people.

“Of course, all these players in Labuan, like for example in the case of the trust companies, the activities that they do, generate a lot of all these spinoffs. We do have trust companies that do a lot of so-called backroom processing, this middle office processing. So, they employ 200 to 300 people and that augurs well for the Labuan economy,” he said.

He said since the Labuan IBFC’s establishment in 1990, it has seen a sustainable growth pattern with a lot of significant changes.

“We changed our laws and regulations; we changed our guidelines, we even changed our name, it used to be called International Offshore Financial Centre (IOFC), and now it is IBFC.

“But I guess the key thing is that we will continue to focus on wholesale business. We do have some retail business but that is not our focus. Even for our banks, it is all about corporate banking, commercial loans and stuff like that. Even the insurance side is all about reinsurance.

“Something that we have been seeing in our reinsurance sector is the growth of this captive industry.

“That has always been our focus over the years. And I think, really, we will continue to focus on those areas of businesses because I think it's more suitable for us,” he said.

-- BERNAMA


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