LABUAN, Oct 25 — The establishment of China Construction Bank (CCB) in Labuan is further testament to the Labuan International Business Financial Centre’s (IBFC) reputation as the preferred jurisdiction for top global players.
Labuan Financial Services Authority (Labuan FSA) director-general Danial Mah Abdullah said the presence of CCB together with other top-notch banks and financial institutions would generate more spillovers and contribution towards the island’s economy.
“The growth of Chinese financial market in the Asia Pacific region is the most rapid in the last decade. In fact, the Chinese banking industry has surpassed the rest of the world in terms of size, as the world’s four largest banks in 2019 hail from China.
“By end-2018, China now has over 4,500 banking financial institutions including big state-owned commercial banks, private banks, rural commercial banks and many more,” he said at the official launching of the China Construction Bank Labuan today.
He said financial and statistical data from the China Banking and Insurance Regulatory Commission (CBIRC) indicate and suggest the outreach of Chinese banks in the region would continue to strengthen in the future.
Labuan FSA according to him has signed a memorandum of understanding (MoU) with CBIRC to foster greater co-operation and collaboration in regulatory and supervisory areas.
“We hope the MoU will set the stage for more Chinese financial services providers to establish in Labuan,” Mah said.
With CCB Labuan as the pioneer digital bank in Labuan, he hoped for the bank to work with Labuan FSA in modernising the Labuan banking space by bringing more technovation to the centre.
“This is also consistent with Malaysia’s initiative to attract more investments particularly from China into the country, and these can be done via Labuan IBFC.
Labuan FSA he said, has a China market strategy, and it would work closely with China’s financial institutions and intermediary firms to pave the way for more Chinese-based entities to be based and conduct business in the centre.
“In fact, over the past nine months, we had witnessed a 114 per cent growth of new investors from China, reflecting a significant spike in Chinese business in Labuan IBFC. In terms of financing, a total of USD1.28 billion or about five per cent of the total Labuan banking financing has been granted to the Chinese market.
“With CCBL in the industry, we hope this will bring in more Chinese investors and institutions to use Labuan IBFC as a platform for trade and investments in the region,” he said.
Mah said even for the Belt Road Initiative (BRI), a key success factor for this huge initiative is financing and as such, CCBL could position itself to become the apex financing hub for the BRI.
“Closer to home, we hope CCB Labuan can even help to finance the construction of the Labuan-Menumbok bridge, to realise the dreams of many,” Mah said.