Brunei's Local News - Brudirect.com

Bandar Seri Begawan – Non-banking financial companies are an essential part of the financial landscape of any country. In the context of Brunei Darussalam, they keep the wheels of automobile financing turning by competing with banks for deposits as their main source of funding, which came under the purview of the Finance Companies Act that is administered by the Financial Institutions Division of the Ministry of Finance.

Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd Rahman bin Hj Ibrahim, the Second Minister of Finance, make the remarks during his keynote address at the official opening of Baiduri Finance Berhad's new head office at the GHK building, Beribi Industrial Complex, last night.

The minister also reminded the industry players to pay more attention to the directive that was issued by the Ministry of Finance a few years ago, which requires borrowers of finance companies to contribute to the payment of their car purchases through the stated minimum down payment requirement. He said that the measure was put in place to help finance companies mitigate some of the borrowing risks, relating to automobile

purchases, which comes with an immediate depreciation cost.

"Regulations aside, we believe the cornerstone to a sustainable industry is one that is bred and led by prudent financial management, best practiced first and foremost, by industry players themselves," the minister said.

"It is important that risks, which could translate themselves into non-performing assets (NPA), must be identified at the first sign and timely action taken to manage risks and make adequate provisions to cover them," the minister went on to add.

"The current global financial crisis has shown how important strong capital is to make financial institutions resilient to external shocks caused by extenuating economic downturns. It is therefore always prudent to take stock, rationalise and ensure that your expansion plans include a prudent estimate of capital needed to support such expansion," Pehin Dato Hj Abd Rahman said.

Speaking on the effect of the global financial crisis, he explained: "A growing number of countries are faced with a threat not seen in decades, with consequences that emerge as deepening economic recessions, burgeoning budget deficits and record unemployment."

"By the grace of Allah the Al-Mighty, Brunei Darussalam's financial industry has remained unburdened by this crisis, however, witnessing the events unfold across the world reinforces the belief that Brunei must continue to remain vigilant," he stressed.

The minister continued, "The current financial crisis has taught us many lessons, not just on the importance of understanding and managing risk but also on the need to act with restraint when most needed."

In the banking and finance industry, management at every level plays a crucial role in protecting the interest of shareholders and depositors. To forget these interests and the trust and loyalty that have been built by previous generations can disappear very quickly.

"The lesson learnt from this crisis is to always place your shareholders and depositors interest at the forefront of decision making processes," the minister said.

Mr Pierre Imhof, General Manager of Baiduri Bank explained, "Baiduri Finance is making a strategic move to the new location in order to meet the demands of a burgeoning population. The past three to four years have shown increasing traffic jams and parking problems at the Kiarong Complex for both Baiduri Bank and Baiduri Finance customers."

Pehin Dato Hj Abd Rahman officiated the new Baiduri Bank's Finance premises by playing the ‘gulintangan' (traditional Malay music instrument) together with Mr Pierre Imhof and Haji Haliluddin bin Dato Hj Talib, General manager of Baiduri Finance. -- Courtesy of Borneo Bulletin