Brunei Darussalam’s banking system is characterised by a dual system made up of Islamic and conventional banks, as well as an Islamic trust fund set up under its own statute. According to the Brunei Darussalam Central Bank’s (BDCB) bi-annual policy statement released in September 2021, the banking industry continues to have a robust capital position with an aggregate capital adequacy ratio of 21.4 per cent as of Q1 2021.
Nevertheless, the banking industry’s profitability has declined slightly due to uncertainties associated with the pandemic and the low global interest/profit rates environment. The banking sector’s overall risk level in Q1 2021 remained the same as Q4 2020.
In order to ease the financial burden, BDCB extended the period for assistance to affected businesses and invididuals, and waiver of fees and charges for online local interbank fund transfers from April 1 to September 30. Following the pandemic’s second wave starting in August 2021, the period of assistance was further extended to December 31.
The interim measure introduced by BDCB and the Brunei Association of Banks (BAB) in March 2020 to waive all local interbank transfer fees led to over 90-per-cent year-on-year (y-o-y) increase and 59.9-per-cent y-o-y increase in the utilisation of the Real Time Gross Settlement (RTGS) system and Automated Clearing House (ACH) Direct Credit system respectively from April to September 2020.
Besides efforts to enhance and streamline the prudential regulatory framework for the financial sector that is consistent with international standards and best practices, BDCB also expanded its macro-prudential surveillance toolkit to mitigate systemic risk of the financial sector in Brunei.
To further promote market transparency and discipline, BDCB has refined the existing public disclosure requirements by issuing a Regulatory Notice on Pillar 3 – Public Disclosure Requirements.
Meanwhile, to ensure effective controls and management of conflict of interest when producing or disseminating research reports to any investors or potential investors concerning securities or issuers of securities, BDCB has issued the Guideline on Handling of Conflict of Interest upon Promoting Research Reports.
As part of its continuous efforts to strengthen financial consumer protection, BDCB has issued two enhanced notices – Notice on Market Conduct and Notice for the Establishment of a Complaints Handling Function within Financial Institutions. The ASEAN +3 Macroeconomic Research Outlook (AMRO) in its recent publication said Brunei’s financial sector remains sound with credit risks under control, amid slowing credit growth.
Banks continue to be well capitalised with ample liquidity and reasonable profitability. The policy of deferment of principal or interest payments since April 2020 has been successful in containing the deterioration in the non-performing loan ratio.
In 1994, Baiduri Bank began its operations from a modest office space at Jalan Pemancha with less than 10 staff. What followed was a decade of growth and expansion for what would become the Baiduri Bank Group.
Parallel with the move to a new headquarters in Kiarong in 1996, Baiduri Finance was launched to undertake hire purchase financing of cars and construction equipment. Baiduri Finance would later become the nation’s leading automobile finance company. This period also saw Baiduri Bank’s reach expand to the Belait and Tutong districts in 1997 and 2004 respectively.
Today, Baiduri Bank is the largest conventional bank in the country comprising ten branches including a modern eco-friendly headquarters at 1 Jalan Gadong in the capital. Baiduri Finance has two branches, one in Sumbangsih and another in Kuala Belait. Baiduri Capital, another wholly owned subsidiary of the bank launched in 2015, specialises in securities trading and investment products. Baiduri Bank Group has an 800-strong workforce comprising 99 per cent local employees.
Despite the challenging operating environment during the pandemic, Baiduri Bank remains resilient and continues to thrive on many fronts. Its subsidiaries Baiduri Finance and Baiduri Capital have also demonstrated strong business momentum during this period.
The CEO of Baiduri Bank, Ti Eng Hui, said, “The past two years were indeed unprecedented times for all businesses as the world economy plunged into recession. We are pleased that Baiduri Bank Group, as a whole, demonstrated solid performance despite the challenges. Our capital remained strong and we continued to invest in capability building, focusing on people, technology, process efficiency, risk management and governance. This is also made possible by the effective measures undertaken by His Majesty’s government in addressing the pandemic, for which we are grateful.”
In supporting the government’s efforts to curb the spread of COVID-19, Baiduri Bank added a new feature to its digital banking service by facilitating donations to the COVID-19 Relief Fund. The bank also added a feature on its website which allows customers to donate to the aforementioned fund using any credit or debit card.
As part of its corporate social responsibility drive, the bank has been donating food and personal protective equipment (PPE) to frontliners as well as underprivileged special needs families. The bank also donated laptops to underprivileged students to facilitate home learning as well as rapid antigen test (ART) kits and PPE to the Ministry of Health.
For safety and convenience during the pandemic, the group actively encourages its customers to take advantage of digital banking such as Baiduri b.Digital Personal, Business i-Banking and Baiduri Finance Mobile App. Baiduri Bank’s financial planners are also available for video consultation by appointment via the website. Businesses have the option to take their businesses online through MerchantSuite (by Linkly) or through the Baiduri Payment Gateway Service (BPGS).
Human capital development In support of Brunei Vision 2035 to create a dynamic and sustainable economy, the bank introduced the Graduate Apprenticeship Programme (GAP), a programme targeting fresh graduates. The programme comprises two main parts – a classroom component and job rotations within Baiduri Bank Group.
“This programme offers a unique opportunity for recent graduates to gain valuable working experience and give them a firmer foothold in the job market. Through exposure to a real-world working environment, we hope that GAP will play a role in creating an adaptable and skilled workforce that’s ready to take on any challenge in the future,” Ti said.
In 2019, the bank introduced the Management Associate Programme (MAP) to provide associates with a solid foundation in banking.
The programme offers placements at various departments and divisions within the group, as well as the opportunity to manage projects under the guidance of senior management. “MAP is designed to enhance the associates’ skill sets and prepare them for leadership roles in the future.”
As part of Baiduri Bank Group’s human resources (HR) transformation journey, a number of initiatives have been launched to digitalise key processes for greater efficiency and better employee experience. Through SAP SuccessFactors, one of the largest cloudbased Human Capital Management systems, it covers processes such as recruiting, learning, performance management, employee onboarding and succession planning.
The bank has also invested heavily towards selfdirected continuous professional development for its staff by partnering with a number of providers such as Intuition Knowledge Service, Moody’s Analytics and LinkedIn Learning among others. “We have been incorporating digital solutions and online learning platforms in our efforts to instil a culture of self-learning and development to build a highly competent workforce,” said Ti.
The bank strives to improve financial literacy among consumers and the general public in support of the Brunei Darussalam Central Bank’s (BDCB) goal of developing financial knowledge of the public and employees in the financial sector.
“As a knowledge-based industry, the success of the financial sector is underpinned by a skilled workforce and knowledgeable consumers,” said Ti. “This is why we are actively working towards helping BDCB reach its goals through various collaborations with government agencies and stakeholders.”
The bank’s Wealth Management unit participates in various events and roadshows, providing consultations on financial planning in addition to hosting seminars and workshops. The bank also leverages its social media platforms, offering tips and advice on achieving financial goals.
Since 2016, Baiduri Bank has been participating in BDCB National Savings Day programme to promote a savings culture. The bank also collaborates with Employees Trust Fund (TAP) to hold financial planning talks and financial health checks for employees.
With technology advancing at an ever-increasing rate, the drive to incorporate it into the banking environment is part of Baiduri Bank’s sustainability plan. These innovations also fall in line with the primary objective of BDCB Digital Payment Roadmap to create a digital payment ecosystem by 2025.
“Banks must focus on digital transformation and migrate traditional banking services focussing on accessibility, ease of use, security and awareness,” Ti said.
For the ease and convenience of customers, Baiduri Bank offers digital banking services such as Baiduri b.Digital Personal and Baiduri Business i-Banking where customers and businesses can conduct their day-to-day banking in a secure online environment. The bank also invested in the use of artificial intelligence in the form of Emmi, a chatbot on its corporate website. Using predictive analytics, Emmi has the capacity to actively learn from conversations, providing relevant answers before customers even complete their questions and offering next-best answers based on context. Other major technological initiatives include Robotics Processing Automation (RPA) implementations to streamline processes and improve operational efficiency, data analytics applications for credit risk management and compliance monitoring as well as infrastructure to enable remote work.
While digital technology will continue to play a vital role in meeting the needs of consumers today and in the future, it should not be seen as the sole or even primary focus of the financial services industry. Baiduri Bank strongly believes that banking requires a balance between digital experience and the human touch to deliver the best customer experience.
2021 was undoubtedly a difficult time for corporates worldwide as the pandemic had triggered the most challenging global health crisis and economic downturn for a generation. However, it also accelerated and gave new force to pre-existing trends, notably digitisation. Many made major strategic decisions to negotiate between business disruption, some sought new partnerships that were necessary for adapting and most found themselves relating more empathetically to the needs of the wider society. These adjustments may be daunting for most companies. Nonetheless, they were business resilience strategies that corporate sustainability has long been advocating for.
COVID-19 had rapidly shifted much focus to quick solutions that coincide with values that promote sustainability. As we begin to rise into a post-pandemic phase, digital transformation and sustainability are among the key opportunities that have emerged. Businesses have been embracing the opportunities to innovate and march forward, while finding ways to weave digital transformation and sustainability into their DNA as the world moves towards endemicity.
To recover holistically, Bank Islam Brunei Darussalam (BIBD) as the nation’s largest financial institution, has set an example by anchoring re-growth on environmental protection, responsible entrepreneurship and inclusive social impact via its sustainability framework, launched in October 2021. This marked the bank’s strategic decision and focus to encourage a wider commitment towards sustainability in support of United Nations (UN) Sustainable Development Goals (SDGs) – the blueprint to a sustainable future for all, individuals and organisations alike.
Guided by Maqasid Shariah – the fundamental principle and values that have shaped BIBD as an Islamic financial institution, the bank’s sustainability framework underlines the values that will determine and shape its future. With the increased awareness and rapid global transition towards a sustainable economy, BIBD strives to be a catalyst of change for the nation – to pave the way towards a more equitable and sustainable future for Bruneians; deeply intertwined with the bank’s ethos of ‘Bruneian at Heart’.
As part of its Sustainability Framework, BIBD also aims for a target commitment of BND2 billion towards sustainability funding by 2030. BIBD seeks to take the lead on business practices and activities in the domestic market by promoting stewardship among Brunei corporates; strongly supported by digitalisation, sustainability funding, community education and social inclusion. Its commitment will be powered by the environment and social governance (ESG) policies, technology, and digitisation, which are the key enablers in driving a sustainable and responsible business activities towards creating more economic diversity, greater employment opportunities and an inclusive social impact.
The economic disruption associated with the pandemic has also accelerated technological adoption and innovation, including digital technologies and automation. BIBD has always been at the forefront of digital banking transformation in the country. The bank introduced its next generation digital banking solutions, aptly named BIBD NEXGEN, back in 2018 which harnessed the latest innovation in artificial intelligence (AI), machine learning, data analytics and customer insights – symbolising the bank’s position as the pioneer in digital banking for connectivity, accessibility and convenience of its customers.
BIBD NEXGEN is a futuristic banking concept that is mobile-led and customer-centric, while providing financial inclusion for the unbanked and underserved segments. Digital solutions are consistently upgraded and continue to be invested, with more emphasis on creating a digital eco-system for digital transactions through enhanced inter-connectivity and multi-industry alliances; going beyond the shores with local and international partnerships to create synergies via inter-operability and open infrastructures.
For all the rapid technological progress so far, there is a reason to believe that BIBD has significant opportunities to push the innovation frontier. Entrepreneurship in Brunei is likely to continue, given the large young population, long-term growth aspirations and opportunities to address the widespread inefficiency that can be tackled using technology innovation. As businesses respond to the diversifying consumer landscape with new offerings, business models and technology-enabled innovation; the conventional relationship between income and consumption patterns is breaking down in some categories. Business-model innovation and digital platforms are unlocking latent demand by enabling lower-income consumers access to what they could not previously, creating the social inclusive impact to society.
At BIBD, the bank believes that embracing the principles of sustainability will build resilience to change as they ensure governance, transparency and accountability take heightened roles. This will in turn allow the bank to become one of the main drivers in supporting 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’s Brunei Vision 2035.
Established in 1958, Standard Chartered Bank (SCB) is the only international bank in Brunei offering full universal banking services for both individual and corporate clients. The bank has introduced a number of “firsts” in the market such as affluent segment banking through Priority Banking, business instalment loans and dual currency investment products. In 2016, the bank established its Standard Chartered Securities subsidiary in line with the Securities Markets Order.
SCB’s growth and expansion over the years has been geared towards the digital space. This has been an ongoing drive for the past decade as the current global trends accelerate towards digital capabilities, especially with the increasing prevalence of online transactions for everyday life.
With the pandemic further accelerating the need for contactless transactions, this can be expected to be a part of the new normal going forward.
The pandemic was a challenging time for individuals and businesses in the country. Following the first wave of COVID-19, the bank implemented a variety of processes to serve its clients in contactless ways while keeping its staff safe such as processing requests online and offering consultation services through video calls.
At the height of the pandemic, nearly 75 per cent of SCB’s workforce worked from home. Those who were required to work in the office quickly adapted to the situation especially with split operations. Aside from the challenges of ensuring its business continuity plan, the bank also took quick steps in supporting the country’s relief measures for businesses and individuals affected by the pandemic.
It was important that the affected clients knew the bank was ready to support them. This also extended to helping its clients accelerate their digital banking capabilities by having its staff guiding them through the bank’s platforms, especially for businesses.
As the only international bank with a presence in all 10 ASEAN markets in addition to its strong footprint in diverse and exciting markets in Asia, Africa and the Middle East, SCB is well positioned to drive commerce and prosperity for people and businesses.
The bank’s footprint connects emerging and high-growth markets with more established economies, allowing SCB to channel capital to where it is needed the most. SCB’s diversity through its footprint allows the bank to tap into regional and global expertise, providing its clients and stakeholders with world class advisory services for their financial needs. Clients can avail banking solutions overseas through international banking services where they can access a wider range of products and services.
With the bank’s network capabilities, corporate clients can tap into global financial markets and treasury services for liquidity management while being advised of sustainability solutions.
Earlier in 2021, the bank launched Islamic investment offerings through the country’s first approved Islamic window. Having established its wealth management capabilities and offerings in Brunei for over 20 years with the widest range of products and services paired with a professional advisory team, SCB continues to help clients grow and protect their wealth in line with their values and aspirations.
In addition to offering Islamic investments, SCB was the first in market to offer ESG (environment, social and governance) focussed funds, enabling its clients to make a positive impact with their investments.
The bank also supported and sponsored Brunei’s chairmanship of ASEAN last year. Through the ASEAN Business Investment Summit, the bank was able to engage senior leaders in the business to lend thought leadership to the focal themes discussed during the summit.
Sustainability continues to be a focal point for the bank’s operations. Paper usage has been reduced by digitalising many of its internal processes which in turn sped up efficiency. Steps have also been taken to reduce energy usage and eliminate single use plastics, which resulted in its green building certification award for its offices.
The bank’s latest proud achievement was winning the Best Digital Bank award by Global Finance for the eighth time, solidifying its commitment on its digital agenda.
Moving forward, the bank continues to focus on digitalising its operations. As clients continue to expect ease of banking via digital, the bank is constantly finding ways to improve its capabilities around these aspects.
The bank will also continue to engage its clients and the wider community on wealth management via various initiatives such as widening its offerings, financial literacy engagements and awareness building.
Sustainability will be a key agenda as the bank made a global commitment to reduce the emissions associated with its financing activities to net zero by 2050, setting 2030 interim targets in its most carbon-intensive sectors.
With this commitment, the bank believes they can offer thought leadership for Brunei’s approach to shape the country into a low carbon and climate resilient nation.
The bank’s greatest assets continue to be its people, making the organisation what it is today. SCB places a great focus on helping its staff fulfil their potential as the bank continues to upskill them to be future ready while equipping them with new ways of working. Embracing new ways of working has been critical to the bank’s success of navigating the pandemic while keeping its employees safe.
Bank of China (Hong Kong) or BOCHK is the leading commercial banking group in Hong Kong with strong market positions in all major businesses. The bank offers a comprehensive range of financial, investment and wealth management services to personal, corporate and institutional customers.
BOCHK has a prominent presence in the Southeast Asian region, with branches and subsidiaries in Thailand, Malaysia, Vietnam, the Philippines, Indonesia, Cambodia, Laos and Brunei Darussalam. In recognition of its solid financial performance, BOCHK was named the Strongest Bank in Asia Pacific and Hong 2020 by The Asian Banker.
In December 2016, the bank officially opened its branch in Brunei as the first Chinese financial institution to establish its footprint in the country. The BOCHK Brunei branch offers corporate banking, syndicated loan, RMB, cash management, trade finance, non-banking, public sector and personal banking services.
The establishment of a BOCHK branch in Brunei signifies the country’s strong bilateral relations with China, 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.
Malaysia’s largest financial institution Maybank is one of the leading banks in Southeast Asia, with branches in all 10 ASEAN member states and global financial markets such as China and the United States. Maybank has an international network of over 2,600 branches worldwide with 60 years of resilience and market expertise.
The Maybank Group offers a comprehensive range of products and services that include commercial banking, investment banking, Islamic banking, offshore banking, leasing and hire purchase, insurance, factoring, trustee services, asset management, stock broking, nominee services, venture capital and Internet banking.
Maybank commenced operations in Brunei Darussalam as its first overseas unit in 1960. The bank provides full retail and commercial banking products and services. Over the years, Maybank Brunei has continued to thrive and sustain its success in the face of a challenging economic climate.
The bank won Best Small and Medium Enterprise (SME) Bank Brunei in 2017, awarded by Capital Finance International, United Kingdom (UK). In the same year, Maybank Brunei was awarded the Fastest Growing Foreign Bank in Brunei by the Global Banking and Finance Review, UK for the third consecutive year.
Founded in 1935, United Overseas Bank (UOB) has charted steady growth and established itself as a leading bank in Asia with more than 500 offices across 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. The bank provides a wide range of financial services including 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.
In 1974, UOB started its operations in Brunei Darussalam under Overseas Union Bank. The bank opened its second branch in Kuala Belait in 1984. The two branches took on UOB’s name when Overseas Union Bank merged with UOB in January 2002. Three years later, the bank relocated its branch office in Bandar Seri Begawan.
In 2015, UOB Brunei divested its retail banking business. Since then, their focus as a bank is in wholesale banking, onboarding and providing banking services and facilities such as current accounts, time deposits, remittance services, overdraft, trade finance, term loans, working capital and project financing facilities, loan syndication and transaction banking.
UOB Brunei was named the Brunei International Project Finance Bank of the Year 2019 at the Asian Banking & Finance Corporate and Investment Banking Awards. The UOB Group received a total of 13 awards at the combined awards ceremony.
As a subsidiary of RHB Banking group, RHB Bank Berhad is Malaysia’s oldest bank with the incorporation of the Kwong Yik (Selangor) Banking Corporation (Kwong Yik Bank) in July 1913.
Following the Group Corporate Restructuring Plan, RHB Bank Berhad is now the ultimate holding company of the RHB Banking Group effective June 2016. It has been listed on the main market of Bursa Malaysia Securities Berhad on June 28, 2016, in place of RHB Capital Berhad, the former ultimate holding company of RHB Banking Group. In an increasingly competitive business environment, RHB Bank Berhad maintains as one of the leading financial services providers not only in Malaysia but also in the Asia-Pacific region.
The bank has received numerous awards and accolades over the years. With its remarkable service towards small and medium enterprises (SMEs), RHB Bank Berhad won the prestigious Excellence in SME Banking award in Asia in 2019. RHB Bank Berhad provides commercial and merchant banking services with more than 300 branches located across Southeast Asia including Singapore, Thailand, Cambodia, Laos, Myanmar, Vietnam and Brunei.
RHB Bank Berhad’s branch in Brunei has been in operation since 1965 and was initially known as United Malayan Banking Corporation Berhad. In December 1996, the bank was renamed Sime Bank Berhad after the change in ownership under the Sime Darby Group of Malaysia. Following the banking consolidation exercise in Malaysia, the branch was renamed RHB Bank Brunei Berhad in May 1999 offering financial products such as housing loans as well as working capital or financing for registered businesses in Brunei such as overdraft, trade facilities and business loans. It is presently located at Yayasan Sultan Haji Hassanal Bolkiah Complex, Bandar Seri Begawan.
In an effort to get closer to the community, RHB Bank Berhad Brunei has been conducting RHB Touch Hearts and the group had raised more than MYR1.2 million over the past years, which has benefitted more than 20,000 across the areas RHB Group is operating in.
Moving forward, RHB Bank Berhad Brunei strives to expand its business and continues to provide the best of services to its customers, guided by its corporate vision and values.
Copyright 2019 Borneo Bulletin Yearbook 2019 All rights reserved.