Zeti Akhtar Aziz: Participation of Japanese financial institutions in
Malaysia
Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Launch of
Bank of Tokyo Mitsubishi (M) Berhad Penang Branch, Penang, 13 July 2012.
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The speech was read by Assistant Governor, Mr Donald Joshua Jaganathan.
In these highly uncertain economic times, several of the developed economies are
challenged to bring about growth and job creation while addressing several fundamental
weaknesses in their economies and financial systems. While emerging economies have
been affected by these developments, most are still on a positive growth path.
Asia, in this environment, continues to be an important growth centre in the global economy.
While growth may have moderated, it has still remained at levels that have sustained job
creation. Much of this growth is driven by domestic demand and the increased connectivity
among the emerging economies in the region. Economic flexibility and strong financial
systems have supported this trend. In Malaysia, while the slower external demand has
affected our growth, strong domestic demand and our close economic linkages in the region
have continued to underpin our steady growth path.
The Malaysian financial system has long had a tradition of the participation of foreign owned
banking institutions. A number of foreign owned banking institutions began their foothold
here in Penang over a hundred years ago. This was due to Penang's role then as a main
entreport for the export of its hinterland commodities of rubber and tin. At that time, Penang
had become a centre of banking in Malaysia. Therefore the oldest bank in Malaysia first
opened its doors in Penang in 1875, then known as the Chartered Bank of India, Australia
and China to cater to the financial requirements of early European traders. A number of other
major banks also followed suit and established their operations in Penang to serve the large
number of international traders who engaged and participated in Penang's vibrant trade
activities. While Malaysia's financial centre has shifted to Kuala Lumpur, the importance of
Penang as a major economic contributor to Malaysia's economy remains significant. Most
financial institutions have large branches here in Penang with sizeable operations. The
opening of the Bank of Tokyo Mitsubishi's branch here today demonstrates not only the
continued expansion of Malaysian financial system, but that this expansion is well supported
by a fundamentally stable economy that continues to perform during these most challenging
of times.
The decision of Bank of Tokyo Mitsubishi to set up its newest branch will not only be
supported by the large presence of Japanese customers but the continued ongoing
investment activity here in Malaysia's northern region. We also recognise the in-roads the
bank has made in the area of Islamic finance by way of offering new financial products and
services including to international customers.
Malaysia warmly welcomes the continued participation of Japanese financial institutions in
both the domestic financial sector and in the Labuan International Business and Financial
Centre. As at June 2012, there are now 4 commercial banks, 4 insurance companies,
1 reinsurance company and 1 joint-venture takaful operator from Japan, operating in
Malaysia. Through this participation, the Malaysian financial system has greatly benefited
from Japanese investments through the transfer of expertise, knowledge and technology as
well as through enhanced economic interlinkages.
On this note, I wish to congratulate Bank of Tokyo Mitsubishi (Malaysia) Berhad on this
occasion of the commencing of their operations here. I also wish the management and staff
of the Penang branch every success in its endeavours and look forward to its contribution to
our economy.