LABUAN: The COVID-19 pandemic has slightly impacted Labuan’s international financial sector as the leasing segment has felt the pinch over the first few months of 2020.
Labuan Financial Services Authority (Labuan FSA) director-general Datuk Danial Mah Abdullah said the situation was rather akin to a ‘double whammy’, owing to the uncertainty of the global economic landscape.
“COVID-19 has affected our sector and this is unprecedented…we are not sure of the business landscape moving forward, there’s so much uncertainty…you’re not sure how it’s going to be played out, so to speak.
“We are the regulator, a member of all these various multilateral kind of organisations that comprise all these regulators…(there’s) a lot of all sharing of information, sharing of knowledge, and so on, how to handle this situation, and what other jurisdictions are doing.
“We have been scanning around and we have been attending Zoom meetings, with all these other regulators in terms of how we are managing the situation,” he said.
Mah said some form of impact on the industry were seen in the first few months of this year, but were not on a large scale, but some sectors would be affected such as the leasing business.
“It’s like a double whammy, because last year there was a significant drop in oil prices that has affected the oil and gas sector in Labuan…and the situation is now compounded with COVID-19, that doubles the burden,” he said during a recent interview with Labuan International Business Financial Centre (IBFC) chief executive officer Farah Jaafar-Crossby in conjunction with Labuan IBFC’s 30 Years of Intermediating Asia.
The excerpts of the interview were released to Bernama today.
Mah however said there were also some pockets of positive impact as the new norms are taking its shape in the financial sector.
“You talk about digital related businesses…we have been focusing on that industry in the last couple of years, and we are seeing some increase again in that area.
“Of course, in the insurance side, there’s one element of captive business. We are seeing a lot more players in that spectrum as well. But overall, we will continue to scan the region to see what else that we can do, in terms of moving Labuan IBFC forward,” he said.
Mah said the authority had offered relaxations to the industry players who had been affected by the Movement Control Order such as temporary regulatory reliefs.
“This relates to administrative governance. So, there are some reliefs provided to them, in terms of submitting documents to us, and also in terms of how they compute their solvency margin. Of course, the relief is not exhaustive.
“We are also working with the players, (to see) what else we can do for them, to manage the situation. But like I said, when we say we scan the environment, we’re not just looking at businesses…as a regulator, we need to see what are the risks we need to manage to make sure we remain sustainable, as well as to make sure that our resilience is maintained,” he added.
Mah said the Labuan IBFC needed to remain agile and continue monitoring the situation and ensure it is able to provide the best services to the industry players to enable them to operate without any hindrance.