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.
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.