MBSB: Good time to merge, aims for Islamic financial institution status


  • Business
  • Tuesday, 09 Jun 2015

Refinancing facility: (From left) MBSB chairman Tan Sri Abdul Halim Ali, Ahmad Zaini, YBK Usahasama executive director Mohd Tamin Mohd Yusof and executive chairman Datuk Zainal Abidin Sakom at the signing ceremony. – Bernama

KUALA LUMPUR: It may be a good time for MALAYSIA BUILDING SOCIETY BHD (MBSB) to merge, according to president and chief executive officer Datuk Ahmad Zaini Othman.

“It may be a good time,” Ahmad Zaini said when asked whether the banking sector’s present valuations would be conducive for a merger with possible partner, Bank Islam Malaysia Bhd.

He said a merger with Bank Islam could be seen as a fast track solution for the non-bank lender to achieve a Islamic financial institution status.

“But this matter would be decided ultimately at the shareholders level. We do our work to deliver value for them,” he said.

MBSB had earlier said it wanted to achieve Islamic financial institution status in five years and would consider inorganic means to achieve that status.

It has named Bank Islam, which is owned by BIMB HOLDINGS BHD, as a possible target.

Speaking at a press conference after MBSB’s signing ceremony with YBK Usahasama Sdn Bhd, Ahmad Zaini said that every financial institution would be somewhat affected by Malaysia Airlines Bhd’s (MAS) decision to downsize its workforce.

“On our end, we also have some customers who are employees from MAS for personal financing and we will be affected.

“This is also a matter for the industry to decide how we can rehabilitate the financing for the affected staff.

“We will need to look at the terms if there was any reemployment within MAS or if they may be reemployed somewhere else. We hope they will repay their loans as it is not good for the industry if there are massive defaults,” he said.

He said that the amount of potential exposure to MAS staff was “manageable”.

“The non-performing loans for MAS was very small before the restructuring of the airline. We think it should still be okay. We have already met with their human resources department and we are still studying the issue,” Ahmad Zaini said.

Meanwhile, MBSB said although it would be a tough year for the company, it was fairly confident of achieving a high single-digit loan growth target.

“Across our portfolio we are aiming for an 8% loans growth. It is a very competitive year for all financial institutions but hopefully we can achieve this target,” Ahmad Zaini said.

MBSB is also aiming for a shift into corporate loans from retail and is aiming for a 35 to 65 ratio mix for corporate to retail portfolio in the medium term from 12 to 88.

MBSB yesterday signed a Tawarruq refinancing facility of RM250mil for YBK to perform maintenance services works on UiTM’s Jasin, Malacca campus. Its share price closed down 1.08% to RM1.84 yesterday.


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