Overview ofLabuan Banking Business

May 2012Labuan Federal Territory, Malaysia.

Banking Sector in Malaysia

BANK NEGARA MALAYSIA

LABUAN FSA

• Commercial Banks

• Investment Banks

• Islamic Banks

• Discount Houses

• Foreign Bank Representative Office

• Labuan Banks

• Labuan Investment Banks

Labuan BanksBanking LicenceGoverned by Labuan Financial Services and Securities Act (LFSSA) effective 11 Feb 2010

Full Banking Licence providing credit facilities; Labuan investment banking service; Islamic banking business; building credit business; credit token business; development finance business; leasing business or such other

activities receiving deposits, Other business approved by the

Authority

Investment Banking Licence Providing credit facilities Providing consultancy/advisory services

relating to corporate & investment matters or making investments on behalf of any person

Undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities

Other business approved by the Authority

Not allowed to accept deposits.

Dealing in Non Ringgit Malaysia & Non-MalaysianPermitted Dealings with Malaysian Residents

Labuan Banks : Eligibility

Criteria

Full Banking Licence Must be a licensed bank or financial

institution supervised by competent authority

Possess sound track record Accorded a good credit rating by

acceptable rating agencies Supervised by a competent regulatory

authority Conform to generally accepted

standards of international banking practices or BIS, as the case may be.

Investment Banking Licence An investment bank or group

engaging in investment banking activities licensed by the regulatory authority in the country of origin

A licensed bank or an established financial institution or financial service provider supervised by competent authority

Possess sound track record Any licensed institutions under

approval of Bank Negara Malaysia 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.

Labuan Banks : International presence in Labuan include...

Bank CountryBarclays PLC UKGoldman Sachs USAUBS AG SwitzerlandBNP Paribas SA FranceThe Royal Bank of Scotland Group plc UKDeutsche Bank AG GermanyBank of America NA USACredit Suisse Group Switzerland

JPMorgan Chase Bank National Association USAKuwait Finance KuwaitNomura Group JapanANZ Bank Australia

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)

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.

Islamic Finance

Performanceof Financial Industries

Performance of Labuan IBFCSECTOR 2009 2010 2011 ** GROWTH (%)

Companies 7, 423 8,004 8,655 8.1

Banks

• No of Banks• Loans (USD)• Deposits (USD)• PBT (USD)

5918.5b10.2b

249.7m

6119.8b11.6B

536.4m

6024.6b9.5b

404.9m

(1.6)24.2

(15.8)(24.5)

Insurance

• No of Companies• Premiums (USD)

1491.1b

1691.2b

1811.6b

7.133.3

Leasing

• No of Companies• Assets Leased (USD)

13621.9b

17625.0b

22727.6b

29.010.4

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

Thank You

www.labuanfsa.gov.my