KUALA LUMPUR: The Labuan International Business and Financial Centre (Labuan IBFC) recorded total industry assets of US$94 billion in 2025, up 13 per cent from the previous year, reflecting continued resilience and growth momentum across key sectors.
Labuan Financial Services Authority (Labuan FSA) director-general Affendi Rashdi said the IBFC also registered a 32.3 per cent increase in capitalisation to US$22.5 billion, supported by stronger market fundamentals.
The report was released in conjunction with Labuan IBFC’s 35th anniversary year, which saw the centre recording progress in market expansion, business innovation and regulatory standing in line with global standards.
He said the positive momentum was reflected in Malaysia’s favourable outcome in the Financial Action Task Force (FATF) Mutual Evaluation, in which the Labuan IBFC market was assessed favourably, and the financial centre’s debut in the Global Financial Centres Index (GFCI).
"New company incorporations and registrations grew by 5.1 per cent, while 41 new licences were issued, bringing the total number of licensed entities to 808 and operating companies to 4,971,” he said at the release of the Labuan IBFC Market Report at Lanai Kijang here.
Affendi said the performance was underpinned by sustained business activities, new market participation and resilient growth across banking, insurance, capital markets, captive insurance, Islamic finance, and wealth management.
"These niche lines reinforced Labuan IBFC’s role as a financial boutique market offering specialised and future-oriented financial services, with both conventional and Shariah-compliant business structures for investors,” he said.
He said the Labuan banking sector posted a strong recovery in profitability, rising 55.3 per cent to US$665.7 million after a decline in 2024.
"Lending by Labuan banks to the financial services sector rose by 36.9 per cent, reflecting the banks’ continued support for Asia’s financial intermediation activities.
Islamic banking also recorded solid growth, with assets expanding 35.2 per cent to US$2.2 billion, while Islamic financing grew 23.4 per cent to US$1.65 billion, mainly comprising non-resident borrowing.
Affendi said Islamic deposits expanded 17.7 per cent to US$231.8 million, supported by higher non-resident deposits during the year, he said.
The Labuan insurance sector also delivered a stronger performance, with gross premiums rising 5.8 per cent to US$2.5 billion, while profitability increased 7.1 per cent to US$434.7 million, the highest level over the past five years.
"The sector’s net retention rose to 62.7 per cent, reflecting Labuan IBFC’s growing risk capacity and stronger reinsurance role.
"Captive insurance premiums grew 7.2 per cent to US$726 million, contributing more than one-third to the total premiums underwritten by the industry,” he said.
On the capital market segment, Labuan FSA said innovation continued to advance, driven by digital structuring alongside conventional offerings.
Affendi also said the world’s first 200 million renminbi Climate Sukuk reinforced the centre’s innovation in Shariah-compliant finance, sustainability and digital tokenisation solutions.
"Labuan fund managers’ assets under management rose 9.4 per cent to US$1.2 billion, while profitability in the fund management segment surged 143 per cent to US$10.5 million, supported by higher management fees and improved cost efficiency.
"The wealth management segment gained further momentum, with new Labuan foundations rising 29 per cent to 263, the highest since 2021, while total foundations grew 11 per cent,” he said.
Affendi said assets under management of Labuan foundations increased 12 per cent to US$802 million, comprising mainly cash holding endowments.
Labuan FSA said Labuan IBFC complements Malaysia’s multi-layered wealth ecosystem through its conventional, digital and Shariah-compliant structures for wealth preservation, investment and legacy planning.
Meanwhile, the leasing and international commodity trading sectors remained resilient amid global trade uncertainty and commodity price volatility.
"The leasing sector recorded US$1.8 billion in new assets leased in 2025, mainly from the aviation sector, which accounted for 64.2 per cent of the total.
Labuan leasing revenue moderated to US$1.2 billion, while profitability eased to US$597 million amid a softer operating environment.
"However, the lower lease expenses indicated improved cost management and operational efficiency,” he said.
Affendi said for Labuan international commodity trading companies, higher export volumes of crude oil and liquefied natural gas were offset by weaker global prices, resulting in lower export value and narrower profit margins at US$0.6 billion. - Bernama
