Autoriti Monetari Brunei Darussalam (AMBD) in 2016 published the Brunei Darussalam Financial Sector Blueprint 2016-2025 (FSBP). The FSBP guides the development of Brunei’s financial sector and sets out the strategic framework within which AMBD will be working with other ministries and stakeholders to reach the objectives of Brunei Vision 2035.
The FSBP identifies five key pillars that form critical components of the financial ecosystem. These include: monetary and financial stability; competitive and innovative financial institutions and services; robust and modern infrastructure; enhanced international integration; and human capital development.
The blueprint identifies core areas where the financial services sector can act as an enabler for growth in the country, one of which is expanding Brunei’s Islamic finance capabilities.
The FSBP shares that a key focus of financial sector development is the strengthening of Brunei as an
international Islamic financial hub. As stated in the blueprint, “Brunei has affirmed the growing prominence of a more diverse foreign presence and the higher level of foreign participation in the domestic Islamic financial markets, particularly in the sukuk and takaful market.”
“Initiatives will be put in place to further accelerate the internationalisation of Islamic Finance moving forward, thereby establishing a more significant role for the financial system in the intermediation of international financial flows. This will involve the introduction of more innovative Syariah-compliant financial products and services that will meet the more diverse global demands for Syariah-compliant financial solutions.”
Syariah-compliant assets in Brunei show growth
The positive progress of the Islamic capital market in Brunei was highlighted during a keynote address by Minister of Home Affairs Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Haji Awang Abu Bakar bin Haji Apong, who is also the Deputy Chairman of AMBD Board of Directors.
The keynote address was delivered at the Brunei Darussalam Islamic Capital Market Conference on October 22, 2018.
The minister shared that Syariah-compliant assets in Brunei have shown remarkable growth in the second quarter of 2018 compared to two years prior, increasing 82 per cent.
“The sovereign sukuk market also continues to grow with the continuous support of the Government of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam. The total amount of issuances has reached BND12.3 billion so far, growing by more than 10 per cent annually on average for the past five years,” he said.
It was shared that Islamic funds distributed to domestic investors, meanwhile, have held steady ground, totalling around BND100 million since 2017.
“A major milestone in the Islamic capital market is the construction of the new AMBD building which will be funded through the issuance of Sukuk Ijarah Mausufah Fi Zimmah, the first infrastructure project in Brunei to utilise sukuk financing,” the minister added.
Giving his forecast on the Islamic capital market in Brunei in five years, the minister said, “The market is still young, but five years from now, I hope to see a deep capital market that drives sustainable economic development through the efficient mobilisation of funds, leading to a thriving private sector and job creation.”
“To get there, we will need a vibrant network of talented individuals pushing the envelope; a close public-private partnership; market players who can serve all of society’s needs from the individual and the small business, to the conglomerate and the government; institutional investors that take a more proactive role to contribute back to the society; and an increase in product diversity and innovation.”
“But more importantly, I envisage our capital market, and Islamic capital market specifically, to become a platform for Socially Responsible Investments (SRI) and Green Finance, in order to support the achievement of the United Nations Sustainable Development Goals.”
The minister also expressed his delight that the Islamic Financial Services Industry Stability Report 2018 included Brunei as one of four countries with an excess of 50 per cent Islamic banking share in the domestic market, adding that he hoped that Brunei’s Islamic capital market would also experience similar developments.
A notable milestone was achieved when the country attained a spot among the top 10 performing Islamic finance markets in the ICD-Thomson Reuters Islamic Finance Development Report 2017. With a score of 47 in the Islamic Finance Development Indicator (IFDI), Brunei rose from the 14th position in 2016 to the ninth position in 2017 with 23 points, registering a 104 per cent increase.
The IFDI provides rankings and profiles for different Islamic finance markets around the world, drawing on instrumental factors grouped into five broad areas of development as the main indicators, namely Quantitative Development (Islamic Banking, Takaful, Other Islamic Financial Institutions, Sukuk and Islamic Funds), Knowledge (Education and Research), Governance (Regulations, Syariah Governance and Corporate Governance), Corporate Social Responsibility (CSR Activities and CSR Funds Disbursal) as well as Awareness (Seminar, News and Conferences). The indicator does not just focus on the overall size and growth of Islamic finance sectors in different countries; it instead evaluates the strength of the overall ecosystem that assists in the development of the industry.
His Royal Highness Prince Haji Al-Muhtadee Billah ibni His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah, the Crown Prince and Senior Minister at the Prime Minister’s Office in his capacity as the Chairman of AMBD Board of Directors launched the Brunei Darussalam Islamic Investment Summit and the Brunei Darussalam Islamic Finance Website and Mobile Application in 2017.
The report noted that these are some of Brunei’s initiatives that contributed to the 410 per cent increase in the Awareness Indicator to 51 points, from 10 points in 2016.
Brunei also scored a significant development in the Knowledge Indicator, which increased by 154 per cent from 22 to 56 points. The report attributed this to the involvement of higher education institutions and Islamic finance institutions in supporting Islamic finance activities in Brunei.
The nation also registered a 116 per cent increase in Quantitative Development. According to the report, the most improved performances were by Indonesia and Brunei. Brunei was the biggest gainer in Southeast Asia as it improved across all indicators and its much smaller size compared to Indonesia affected its rationalising coefficients, according to the ICD Thomson Reuters report.
As the leading bank in Brunei, Bank Islam Brunei Darussalam (BIBD) proudly serves more than 200,000 customers in retail, corporate and international segments. With a strong focus on innovation and excellence, BIBD has made great strides in the development of its capabilities, while establishing a service benchmark that is truly “Bruneian at Heart”.
BIBD has received accolades in the international and regional forefront. In 2017, BIBD was awarded the Best Mobile Banking Application and the Best Digital Bank by World Finance. The following year, Global Finance announced BIBD is one of the best banks in Asia Pacific. BIBD was recently ranked as the second strongest bank in Southeast Asia by The Asian Banker.
In February 2019, BIBD received the ISO 9001:2015 certification in recognition of retail customers’ on-boarding and personal financing service. BIBD is the only bank in Brunei to be awarded the certification consistently across all its branches.
Supporting Brunei’s ‘Whole of Nation Approach’ The bank supports Brunei’s ‘whole of nation’ approach through its corporate alliance with the Brunei government and government-linked companies (GLCs), said BIBD Managing Director Mubashar Khokhar. BIBD’s full suite of banking services supports the economic growth of Brunei by generating more activity beyond the banking sector to create a vibrant and sustainable economy.
He also highlighted BIBD’s position as the first choice bank for its employees, customers and stakeholders. The bank emphasises their focus on customer service.
“The creation of a better financial and banking ecosystem will also act as a strong proponent for economic growth, with trickle down effects to positively impact Bruneian corporates and SMEs, along with the massmarket
segment,” said Mubashar.
BIBD welcomes the digital transformation in Brunei. In support of Brunei’s gradual transition into a smart economy, BIBD launched their mobile-led and data driven digital proposition, BIBD NEXGEN. The BIBD NEXGEN showcases the bank’s intent to transform traditional banking to the fintech age, creating a branchless banking proposition.
The bank complements their mobile-led services with a more tangible connection to customers. BIBD holds the largest and most readily available network of branches and ATMs across the country, along with the only full-fledged contact centre with a mobile chat feature.
Supporting SMEs and Economic Diversification
In support of small and medium enterprises (SMEs) in Brunei, BIBD launched its first SME 360 branch in 2016. The SME 360 caters specifically to SMEs, offering banking solutions to grow their business.
To encourage foreign direct investment, BIBD established the Asian Desk, a platform for local Bruneian institutions to engage with international institutions for business opportunities.
For micro, small and medium enterprises (MSMEs), BIBD introduced the BIBD MSME Account. With this account, MSMEs can manage their businesses and personal finances separately. The account requires a lower minimum average and allows access to a range of facilities and corporate banking services.
“BIBD believes that success of the country is where there is progress for everyone. On top of our own initiatives, we have also made great strides with our close collaboration with the government of His Majesty along with other Bruneian institutions,” said Mubashar.
BIBD facilitated modules for Darussalam Enterprise (DARe)’s Industry Business Academy (IBA). In partnership with DARe, BIBD introduced the Microcredit Financing Scheme that offers up to BND15,000 for budding industries. BIBD collaborates with LiveWIRE Brunei in the Business Awards Start-up Funding Scheme (BASfs) to inspire talented Bruneian entrepreneurs.
Helping Customers Achieve Their Aspirations
BIBD’s corporate social responsibility (CSR) programmes are designed to uplift communities and individuals. The programmes are hoped to create a ripple effect by not only changing an individual’s life, but also the lives of the people around them and for the next generations of Bruneians.
As BIBD’s flagship education initiative, the BIBD ALAF programme recognises education and learning as the essentials of individual growth and national development. Another programme, the BIBD SEED, is aimed at transforming underprivileged mothers into successful and resilient entrepreneurs able to compete in local and international markets.
To promote the growth of Brunei’s future industry leaders, BIBD launched its first community hub, BIBD Connects, which acts as an engagement platform for communities and entrepreneurs. BIBD Connects charges a fraction of the actual market rental.
The bank takes pride in supporting the Autoriti Monetari Brunei Darussalam (AMBD) to elevate the awareness and benefits of financial management. BIBD regularly holds a series of informative financial management talks with their certified financial planners.
BIBD Aspirasi is a unique and flexible savings scheme to cultivate money management. The savings scheme offers a lucrative reward programme that encourages customers to save for their financial future, embedding a ‘wantscan-wait’ mindset.
The bank continues to expand its presence and deliver its promise of world-class Islamic finance products and solutions, while upholding international standards.
As a local financial institution reaching 25 years of operations, the Baiduri Bank Group has constantly maintained a resilient performance, backed with a strong balance sheet. This is primarily due to the bank’s balanced contribution among its three core pillars: retail banking, corporate banking and consumer financing.
This business model is the foundation to the bank’s success, said Baiduri Bank’s former Chief Executive Officer (CEO) Pierre Imhof, who retired on 1 April.
“We have observed that even when one of our pillars is affected by a slowdown of activity, the performance of the other pillars allows us to remain profitable and experience growth. It is also through our proven business model that we are able to respond to our clients in a more focused and innovative way, in a constantly changing setting, putting us at the forefront of the banking environment,” said Imhof.
The Formula to Success
Baiduri’s constant growth can be attributed to its conservative risk policy and its strong liquidity base. “This excess liquidity provides a good opportunity for the Baiduri Bank Group to bring more financing offers to local and foreign investors. Thanks to a large equity base, built over the years, the Baiduri Bank Group is showing a strong balance sheet which further increases its customers’ and partners’ confidence,” said Imhof.
“Another factor to Baiduri’s success is the bank’s proximity to the market. Being close to its target audiences makes Baiduri more accessible to its customers and makes it easier for the bank to understand its customers’ needs,” he added.
Over the years, the Baiduri Bank Group has been recognised by many international publications. In 2018, Baiduri was announced as the Best Banking Group for Brunei by World Finance, the Bank of The Year for Brunei by The Banker, as well as the Domestic Retail Bank for Brunei by Asian Banking and Finance. Baiduri was also recognised for having the Credit Card Initiative of the Year for Brunei by the Asian Banking and Finance magazine.
One contributing factor is Baiduri’s major upgrade of its branch network. The bank has established bigger premises to serve its loyal and dynamic customer base. Baiduri relocated its Serusop, Tanjung Bunut, Kiulap and Seria branches as well as developed a business hub to cater to corporates and budding entrepreneurs.
A second factor is Baiduri Bank Group’s uncompromising outlook on security. The integrity of its customers’ data is of the utmost importance. Baiduri is the first and only bank in Brunei to be Payment Card Industry Data Security Standard (PCI-DSS) certified. The PCI-DSS is a recommendation imposed on Baiduri by the card brands Mastercard and Visa.
A Truly Green Bank that Gives
The last few years have seen new developments for Baiduri, including the construction of new headquarters. In keeping with being a socially responsible bank, Baiduri has laid the foundation of the new headquarters, which is said to incorporate sustainable, energy-efficient and environmentally-friendly features.
Over the years, the Baiduri Bank Group ran a number of initiatives contributing back to society in many different ways. These include Baiduri’s annual charity golf tournament, the Baiduri Masters. The group raises funds for local charities that cater to individuals with special needs to alleviate their financial burden.
Other initiatives include the Let’s Give Back This Ramadhan campaigns in which Baiduri personnel help clean and repair a section of a home for a deserving family as well as treat underprivileged families in all four districts to groceries and dinner.
The group also sponsors several organisations and activities at varying levels that target community development.
“We also have a goal of increasing financial literacy in our community and this includes providing access to financial planners and holding a series of seminars and roadshows with that specific aim. In that respect, among many activities, we are the major sponsor of the Junior Achievement Programme here in Brunei, a global non-profit youth programme which aims to develop financial literacy, work readiness and entrepreneurship among students. Besides providing financial support, Baiduri staff also volunteer as facilitators in schools,” said Imhof.
Tailor-Made for Bruneians
As a banking group that is always aware of the market and clients’ needs, Baiduri has meticulously vetted and selected products and services to suit its customers’ needs.
“We have a very diverse customer base and this requires us to design a wide range of banking products and services to satisfy the diverse needs of the people of Brunei. We design our products with a balanced approach between classic banking services and the most technologically advanced services, such as internet and mobile banking,” said Imhof.
In keeping with the ebb and flow of technological advancement, the digitisation of services for the bank is their absolute priority. However, branch banking is also important, particularly in terms of providing personalised financial advice in face-to-face meetings.
With its large excess liquidity, the Baiduri Bank Group is able to contribute to the nation’s economic diversification. As a local bank with excess liquidity, Baiduri responds swiftly to its clients’ requests, whether local or international, to invest in diversification projects in Brunei.
Baiduri provides investors and corporates with a full range of banking services and financing such as Working Capital Financing, Trade Financing, Project Financing, Fixed Asset Acquisitions and Banker’s Guarantee.
Baiduri works closely with local and foreign investors through their working relationship with the Ministry of Finance and Economy (MoFE) and Darussalam Assets (DARe). On the home front, Baiduri works with DARe and Asia Inc Forum in the Local Business Development workshop for small and medium enterprises (SMEs).
Baiduri recently partnered with Brunei Shell Petroleum (BSP) in their BSP Credit Facility Program. This programme allows current and future local contractors of BSP who meet the programme’s criteria to get fast track service in the reviewing and decision process of their respective credit applications.
An international bank with sound knowledge of the local market, Standard Chartered plays on these strengths to sustain its business and promote its growth in the face of global and domestic economic challenges.
Standard Chartered is the only international bank in Brunei offering a full-suite of banking products and services. The year 2018 saw the bank celebrating their milestone of 60 years of operations in Brunei, signalling the bank’s strength and endurance.
The bank’s international network is a major factor behind its success. With access to global best practices, the bank is able to adopt them into the Bruneian market, allowing for an enhanced, client-centred decision making process and ease in adapting to shifting market conditions to meet clients’ needs better.
Additionally, the bank strives to ensure its daily operations continuously meet global standards to deliver high quality products and services to its clients.
In recent years, Standard Chartered began leveraging on its global network to diversify local economy by bringing in large foreign direct investments (FDIs) into Brunei. Through its strong corporate banking services, the bank aims to be the financial service provider of choice for the inbound FDIs.
The bank also aims to be a bridge for Bruneian companies targetting to expand operations overseas by allowing access to Standard Chartered’s global branches.
In line with Brunei Vision 2035 and supporting AMBD’s calls to promote public financial literacy, Standard Chartered provides content for a weekly financial literacy column and recently began putting out its content on digital publications to expand its reach.
The bank also conducts roadshows around Brunei to further promote financial literacy. The public can learn more about financial planning insights from the bank’s dedicated team of licensed financial consultants.
Standard Chartered’s Corporate Social Responsibilities focus on environmental sustainability, which the bank believes is important for long-term economic benefits. The bank’s sustainability initiatives aim to create a sustainable environment for Brunei to prosper environmentally and economically and therefore contribute to a profitable marketplace for various industries in the country.
In September 2018, the bank received the Best Consumer Digital Bank 2018 award from Global Finance for the fifth time, having previously received the award in 2013, 2014, 2015 and 2016. The award signifies the bank’s commitment and investment into its digital offerings, with great emphasis on security while meeting clients’ demands.
Moving forward, the bank aims to further expand its digital footprint as digital banking habits among its clients continue to grow, ensuring an enhanced and efficient platform.
In 1991, Perbadanan Tabung Amanah Islam Brunei (TAIB) was established and marked the growth of Islamic financial industry in Brunei. As the pioneer Islamic banking institution, Perbadanan TAIB generates a sustainable impact on the economy and community in compliance with the Syariah laws.
Perbadanan TAIB offers retail and corporate financing. There are five subtypes under retail: Personal, Property, Education, Consolidation and Home Improvement. After almost three decades of operations, Perbadanan TAIB has more than 200,000 savings accounts opened with almost half of Brunei’s population as their customers.
With a dedicated team and smooth operations, Perbadanan TAIB delivers the top banking experience. With eight branches and one selfservice centre across the country, Perbadanan TAIB provides the widest network of dedicated Islamic banking channels.
Financial technology (FinTech) is an emerging industry that uses technology to improve financial services. Perbadanan TAIB welcomes the growth of digital banking services. In 2016, Perbadanan TAIB introduced mobile banking and Internet banking for secure and convenient banking transactions. The following year, Perbadanan TAIB opened its first Self Service Centre in Rimba.
Perbadanan TAIB conducted various programmes in 2018 including Financial Literacy Talk; and has participated in Global Money Week and National Savings Day; as well as Baitul Annam for the underprivileged. Perbadanan TAIB also collaborated with AMBD in AMBD’s Financial Fun Fair, spreading financial awareness.
Small and medium enterprises (SME) are a major player in Brunei’s economic growth. Perbadanan TAIB supports local SMEs, providing financial assistance and training programmes to nurture local entrepreneurs. The financial institute catalyses growth of SMEs in terms of a company’s working capital, assets acquisition, building construction, contract and project financing. This is to encourage and assist the SMEs to modernise and upgrade their business capacity. Perbadanan TAIB plans to establish a banking subsidiary as they develop their infrastructure, products and services.
Bank of China
Bank of China was established in Hong Kong in 1917. A subsidiary of Bank of China Group, Bank of China (Hong Kong) Limited (BOCHK) manages the financial giant’s global operations. With a history of over 100 years, BOCHK is the second largest commercial banking group operating in Hong Kong. The bank has branches and representative offices in 49 countries.
Further expanding its influence in Southeast Asia, BOCHK opened its first branch in Brunei in December 2016. The bank offers comprehensive banking services to individuals and corporations, including corporate banking, personal banking, RMB services, cash management, trade finance and non-bank financial institution and public sector services.
Following Chinese investments into Brunei, the establishment of a BOCHK branch in Brunei was another sign of Brunei and China’s strong bilateral relations, especially in trade and finance. It also illustrated BOCHK’s efforts to expand into the ASEAN market, a key region in China’s ‘One Belt, One Road’(OBOR) initiative.
In January 2018, BOCHK celebrated the first anniversary of its Brunei branch. On the subject of economic diversification, General Manager of the bank’s Brunei operations Wang Xiaolin said the bank hopes to create more business opportunities for local development and new banking experiences for the local community.
Bank Usahawan works closely with DARe (Darussalam Enterprise), Made in Brunei and Universiti Brunei Darussalam’s Entrepreneurship Village. Their focus is entrepreneurs. Bank Usahawan does not offer retail services, deposits and credit cards. They are an equity finance from the Ministry of Finance, with the aim of helping to diversify the economy.
The bank offers Syariah-compliant products and services. They have two products, namely Assets Financing Murabaha – to finance fixed assets and working capital for entrepreneurs and businesses; and Working Capital Financing Tawarruq – to finance operating expenses and stocks and working capital.
Small or medium-sized enterprises that are registered, licensed and operating in Brunei, and have been for at least 12 months with a visible profitability trend, are eligible to apply for a selection of financial plans.
As of July 2018, Bank Usahawan has approved five disbursements of loans worth over BND0.5 million in various sectors ranging from agriculture to manufacturing, to the services industry. The bank plans to open branches in other districts and improve their digital services, with its vision to be the leading provider of financial services to the micro, small and medium enterprises (MSMEs) of Brunei.
Maybank is Malaysia’s largest financial institution. In November 1960, Maybank commenced operations in Brunei as the first overseas unit of Maybank. Maybank Brunei offers full retail and commercial banking products and services in the country such as corporate financing, development financing as well as property financing.
Maybank Brunei has continued to thrive in the face of a challenging economic climate. In 2017, the bank won ‘Best Small and Medium Enterprise (SME) Bank, Brunei 2017’, awarded by Capital Finance International, UK. It was the second time the bank had received the award, its first coming in 2015. In September 2017, Maybank Brunei was awarded the ‘Fastest Growing Foreign Bank, Brunei 2017’ by the Global Banking and Finance Review, UK for the third consecutive year.
In November 2018, Maybank announced it had successfully completed the transfer of its Community Financial Services (CFS) business in Singapore from its branch to Maybank Singapore Limited (MSL), a Singapore incorporated subsidiary.
United Overseas Bank
United Overseas Bank (UOB) was initially known as United Chinese bank, established in Singapore in August 1935. In 1965, the bank changed its name to UOB. UOB is a leading bank in Asia with 68 branches in Singapore and a network of more than 500 offices in 19 countries and territories in Asia Pacific, Western Europe and North America. Its asset management arm, UOB Asset Management, is one of Singapore’s most awarded fund managers with a growing regional presence. UOB is rated among the world’s top banks, with a rating of Aa1 from Moody’s and AA-from Standard & Poor’s respectively. UOB provides a wide range of financial services. This includes personal financial services, private banking, commercial and corporate banking, investment banking, corporate finance, capital market activities, treasury services, futures broking, asset management, venture capital management, insurance and stockbroking services.
UOB started its operations in Brunei in 1974, under Overseas Union Bank (OUB). When UOB acquired the Overseas Union Bank in January 2002, the operations of the branches in Brunei was handed over to UOB. On October 1, 2005, the bank relocated its branch office in Bandar Seri Begawan.
In 2015, UOB stopped its retail banking operations in Brunei. Since then, the UOB Group refocussed its business in Brunei to provide investment services through UOB Asset Management (B) Sdn Bhd (UOBAM Brunei).
Copyright 2019 Borneo Bulletin Yearbook 2019 All rights reserved.