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DatabankSeptember 29 2021

ROA holds up at Brunei banks despite pandemic

The recent rise in the oil price bodes well for the country’s financial sector.
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Return on assets (ROA) at Brunei’s two largest banks remained stable last year in spite of the impact of the Covid-19 pandemic. The oil-rich Asian nation was one of a handful in the region to experience economic expansion in 2020 and the government’s strong net fiscal asset position provided it with ample buffers.

The country’s largest bank, Bank Islam Brunei Darussalam, saw ROA fall slightly from 1.45% in 2019 to 1.40% last year, while rival Baiduri Bank saw ROA dip from 1.42% to 1.40%, according to The Banker Database.

The banks’ fortunes are strongly linked to the oil price. Brunei’s oil and gas industry accounts for almost half of the country’s gross domestic product and more than 70% of government revenues. The price of crude oil pushed above $80 a barrel this week, which should bode well for the country’s financial sector if this trend continues.

Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world’s leading banks in 190 countries. Contact us.

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