Banking
Brunei has a small banking sector which includes both
conventional financial institutions and Islamic banking with an asset of BND
17.0 billion at the end of 2015. The financial system in Brunei Darussalam is
dominated by banking institutions with an asset base of BND 17.0 billion at
2015, accounting for 82.0% of the total assets of the financial system.
The Monetary Authority of Brunei Darussalam (AMBD) is the
sole central authority for the banking sector, in addition to being the
country’s central bank. Banks in the country have high levels of liquidity,
good capital adequacy ratios and well-managed levels of non-performing loans.
AMBD through the Banking Supervision Unit is responsible for
licensing, regulating and supervising the banks and finance companies. The
primary objective of AMBD’s banking supervision unit is to ensure safety and
soundness of banks and finance companies, as well as protecting the interests
of consumers and public.
A handful of foreign banks have established operations in
the country such as Standard Chartered and Bank of China (Hong Kong). In late
2016, HSBC announced that it will be down-sizing its operations in Brunei. All
banks are under the supervision of AMBD, which has also established a credit
bureau that centralizes information on an applicant’s credit worthiness.
The Brunei dollar is pegged to the Singapore dollar and is accepted currency in
the country.
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Financial
Soundness Indicators for Banks
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Financial Soundness
Indicator
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2014 (%)
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2015 (%)
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Capital Adequacy
|
|
|
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Regulatory Capital to Risk Weighted Assets
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21.4
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21.1
|
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Assets Quality
|
|
|
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Net Non-Performing Financing to Financing
|
2.3
|
1.7
|
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Profitability
|
|
|
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Return on Assets
|
1.4
|
1.4
|
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Return on Equity
|
10.2
|
9.5
|
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Liquidity
|
|
|
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Liquid Assets to Total Assets
|
53.0
|
45.6
|
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Financing to Deposits Ratio (exc Govt Deposits)
|
41.8
|
46.3
|
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Distribution of
Financing
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Sector
|
2014
|
2015
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Percentage
(%)
Change
|
|
Amount
BND million
|
% of Total
Financing
|
Amount
BND million
|
% of Total
Financing
|
|
Household Sector
|
2,956
|
52.1
|
3,094
|
50.7
|
4.6
|
|
Personal Financing
|
1,577
|
27.8
|
1,664
|
27.3
|
5.5
|
|
Residential Housing
|
1,379
|
24.3
|
1,430
|
23.4
|
3.6
|
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Corporate Sector
|
2,719
|
47.9
|
3,012
|
49.3
|
10.8
|
|
Commercial Property
|
609
|
10.7
|
586
|
9.6
|
-3.8
|
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Transportation
|
653
|
11.5
|
328
|
5.4
|
-49.7
|
|
Traders
|
460
|
8.1
|
472
|
7.7
|
2.6
|
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Services
|
303
|
5.3
|
798
|
13.1
|
163.5
|
|
Manufacturing
|
294
|
5.2
|
534
|
8.7
|
81.4
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Others
|
400
|
6.9
|
294
|
4.8
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-26.4
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Total Financing
|
5,675
|
100.0
|
6,105
|
100.0
|
7.6
|