1. Overview of
Labuan Banking
Business
May 2012
Labuan Federal Territory, Malaysia.

2. Banking Sector in Malaysia
BANK NEGARA LABUAN FSA
MALAYSIA
• Commercial Banks • Labuan Banks
• Investment Banks • Labuan Investment Banks
• Islamic Banks
• Discount Houses
• Foreign Bank Representative
Office

3. Labuan Banks
Banking Licence
Governed by Labuan Financial Services and
Securities Act (LFSSA) effective 11 Feb 2010
Dealing in Non Ringgit Malaysia & Non-Malaysian
Permitted Dealings with Malaysian Residents
Full Banking Licence Investment Banking Licence
 providing credit facilities;  Providing credit facilities
 Labuan investment banking service;  Providing consultancy/advisory services
 Islamic banking business; relating to corporate & investment
 building credit business; matters or making investments on behalf
 credit token business; of any person
 development finance business;  Undertaking foreign exchange
 leasing business or such other transactions, interest rate swaps,
activities dealings in derivative instruments or
 receiving deposits, derivative financial instruments or any
 Other business approved by the other similar risk management activities
Authority  Other business approved by the
Authority
 Not allowed to accept deposits.

4. Labuan Banks : Eligibility
Criteria
Investment Banking Licence
Full Banking Licence  An investment bank or group
 Must be a licensed bank or financial engaging in investment banking
institution supervised by competent activities licensed by the regulatory
authority authority in the country of origin
 Possess sound track record  A licensed bank or an established
 Accorded a good credit rating by financial institution or financial
acceptable rating agencies service provider supervised by
 Supervised by a competent regulatory competent authority
authority  Possess sound track record
 Conform to generally accepted  Any licensed institutions under
standards of international banking approval of Bank Negara Malaysia
practices or BIS, as the case may be.  Corporations with the necessary
expertise and experience in financial
industry with at least 3 years good
track records and regulated by an
Authority in their home countries.

5. Labuan Banks :
International presence in Labuan
include...
Bank Country
Barclays PLC UK
Goldman Sachs USA
UBS AG Switzerland
BNP Paribas SA France
The Royal Bank of Scotland Group plc UK
Deutsche Bank AG Germany
Bank of America NA USA
Credit Suisse Group Switzerland
JPMorgan Chase Bank National Association USA
Kuwait Finance Kuwait
Nomura Group Japan
ANZ Bank Australia

6. Labuan Banks :
OPERATIONAL REQUIREMENTS
 Maintain a physical presence in Labuan.
 May opt for co-location (to any parts of Malaysia) subject to meeting the
qualifying criteria under the Guidelines on Co-Location of Labuan Banks issued
on 19 January 2010.
 Minimum capital requirement of RM10.0 million equivalent in foreign currency,
unimpaired by losses.
 Comply with the statutory requirements under the Labuan Financial Services and
Securities Act 2010 and prudential/reporting requirements issued by Labuan FSA
at all times.
 Carry on business in any currency other than the Malaysian Ringgit, except as
permitted by the relevant Authority(s)

7. Islamic Finance
The wide range of Islamic financial products and services
available in Labuan IBFC includes Islamic banking, Islamic
capital market, Islamic insurance (takaful), Islamic
reinsurance (retakaful), Islamic funds, waqf and Islamic
trusts administration. The products and services are
offered under various Shariah-compliant schemes by
Islamic financial institutions in Labuan.
The Labuan Islamic Financial Services and Securities Act
2010 streamlines procedures and requirements for all
Shariah-related activities in Labuan IBFC with Labuan FSA
as the licensing authority.

8. Performance
of Financial Industries

9. Performance of Labuan IBFC
SECTOR 2009 2010 2011 ** GROWTH (%)
Companies 7, 423 8,004 8,655 8.1
Banks
• No of Banks 59 61 60 (1.6)
• Loans (USD) 18.5b 19.8b 24.6b 24.2
• Deposits (USD) 10.2b 11.6B 9.5b (15.8)
• PBT (USD) 249.7m 536.4m 404.9m (24.5)
Insurance
• No of Companies 149 169 181 7.1
• Premiums (USD) 1.1b 1.2b 1.6b 33.3
Leasing
• No of Companies 136 176 227 29.0
• Assets Leased (USD) 21.9b 25.0b 27.6b 10.4
LFX
• Market Cap (USD) 16.6b 17.1b 17.1b 0
Funds
• Size (USD) 9.6b 9.6b 9.4b (2.1)
Takaful / Retakaful
• Gross Contributions (USD) 234.1m 296.7m 459.5m 54.9
Note : ** The numbers are subject to changes

10. www.labuanfsa.gov.my