| Hakim Hayat |
ASEAN’S regional integration has increased Brunei Darussalam’s opportunity to diversify its economy amid challenges the Sultanate is facing, while the outlook for the banking and finance sector in the country remains a strong instrument for future growth, the Minister of Education said yesterday.
Speaking at the opening of the International Finance and Banking Society (IFABS) Asia 2016 Brunei Conference yesterday, Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Awang Haji Suyoi bin Haji Osman, who is also Deputy Chairman of Autoriti Monetari Brunei Darussalam (AMBD) noted that in 2015, Brunei experienced a B$2 billion trade deficit, a high unemployment rate of 6.9 per cent and a lower economic growth rate which is below its Asean counterparts – all have led to a slow momentum for economic diversification.
“Externally, oil glut in international market has lowered the oil price further. Brexit has also made a small financial shock to Brunei’s financial sector and lowered hopes for the country to use the UK to penetrate the EU markets,” he added.
Despite all these, the minister said that integration of all 10-member of the Asean bloc has increased economic diversification prospects, through the access of bigger markets for Brunei’s exports and investments.
He said that in addition, Brunei Darussalam has amplified its collaboration with the Islamic Development Bank in order to strengthen its Islamic banking and finance sector, while noting that all these indicators suggest the urgent economic diversification for Brunei is in its finance and banking sector, by using it as an instrument and strong institution for future growth.
Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Awang Haji Suyoi bin Haji Osman, who is also Depu-ty Chairman of Authoriti Monetari Brunei Darussalam (AMBD), delivering his speech. – SIM YH
Sharing the strong and healthy performance indicated by Brunei’s banking industry, the minister shared that the banking sector continues to be resilient with an asset base of $18.6 billion as of 2014 with an aggregate capital adequacy ratio of 21.1 per cent in 2015. “Overall, the key financial soundness indicators in the banking sector were maintained at healthy levels. Strong capital and high liquidity levels, together with sustained earnings and improved credit risk management, resulted in the maintaining of the financial system’s stability,” the minister added.
The exposure of the banks to market risks was also negligible due to the low trading portfolios and minimal exposure to foreign exchange risk as a result of substantial foreign currency assets, he pointed out.
The Sultanate’s dual financial system consists of Islamic and conventional financial institutions with an asset base of $20.7 billion as at end 2015.
The financial system here is dominated by banking institutions with an asset base of $17 billion in 2015, accounting for 82 per cent of the total assets of the financial system.
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