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Banking

Baiduri Bank bemoans the burden of Brunei’s bounty

Financial markets are woefully underdeveloped in this oil- and gas-rich country. For Baiduri Bank, which is mulling a listing in Kuala Lumpur, that makes growing a tough proposition.

Pierre Imhof is burdened with a problem that many bankers would envy.

By his own admission, the French-born chief executive of Baiduri Bank, the closest thing to a privately owned local bank in the autocratic and oil-drenched sultanate of Brunei, has too much cash on the books.

Take Baiduri’s financial statement for calendar 2016. Of the bank’s Br$3.13 billion ($2.3 billion) in assets reported that year, some Br$1.64 billion, or 53%, were in cash and short-term funds. 

That excludes the Br$154 million that Baiduri says it had in mandatory reserves held at Brunei’s state monetary authority. By contrast, Singapore’s DBS reported around 6% of its assets as cash and balances with central banks in its 2016 accounts.

Banks exist largely to lend, but in Brunei “our banking and financial sector for years has had a strong excess of liquidity,” says Imhof, almost apologetically.

As for that other bane of bankers, non-performing loans, it seems they are just not much of a problem in Brunei these days. 

“Our NPLs are very, very close to zero,” he says.

Pierre-Imhof-160x186

Pierre Imhof,
Baiduri Bank

The Parisian Imhof, now 64 and close to retirement, has spent most of his career with BNP Paribas, which is a minority shareholder of Baiduri Bank, and has been around, serving banks across francophone West Africa, the Middle East, China and the Philippines.

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