Speaking to the Malaysian Business Times, LOFSA director general, Noorazman A. Aziz, said that although the number of offshore banks established in the territory has declined to 55 from 60 at the end of last year, this has mainly been due to inter-bank mergers and aquisitions. 'There has not been one bank that has gone out (of Labuan) because of this (economic slowdown),' he confirmed. 'They still think that Asia is the way to go.'

The LOFSA chief added that the island's insurance sector had seen a significant jump, with the number of providers and related companies now standing at 97, compared with 68 in December 2000.

When questioned about the future for the jurisdiction, Mr Noorazman said that LOFSA, as the regulatory authority, was looking into changes in legisalation to increase the financial centre's international competitiveness, and would be more selective in its marketing approaches in the future. 'We are not going to do any more generic promotions,' he told the Business Times. 'This time around, it will be more a one-to-one thing where we know what we want,'

He also revealed that in the next year, the focus would be on attracting Chinese business, and promoting conventional financial services there, adding: 'We will go big on Shanghai especially.'