MBSB not keen on digital banking licence

MBSB president and CEO Datuk Seri Ahmad Zaini

PETALING JAYA: Malaysia Building Society Bhd (MBSB) is not inclined to apply for a digital banking licence, says group president and chief executive officer Datuk Seri Ahmad Zaini Othman.

“For digital banking, we are looking at it but we are more skewed towards not having it on the cards as far as we are concerned due to certain conditions that have been placed for licence (holders).

“Nevertheless, as a banking institution, we are allowed to and will continue to digitalise our present banking platform, ” Ahmad Zaini said at MBSB’s post-AGM press conference.

“We are also looking at the segmentation of this licence. This is something we would have to engage with our board of directors and there will be a discussion on it very soon, ” he added.

Meanwhile, MBSB is targeting a 3% growth in revenue and loans this year as it sees selective bright spots in the consumer retail and trade financing segments.

In the consumer retail segment, Ahmad Zaini said its personal financing to civil servants sees a steady outlook amid the continued uncertainties due to the Covid-19 pandemic.

“In the consumer segment, the personal financing from government servants provides a greater stability for us since there are no retrenchments on the cards.

“This (segment) provides us a very stable level of income and we will continue to expand in this segment. We are also ensuring that salary reduction is done right at the source, ” he said.

Ahmad Zaini said another segment is the trade finance, which the group aimed to push it beyond the present level.

“Right now, we have achieved a turnover of RM5bil-RM6bil in trade financing facilities this year alone. We would like to push this higher, ” he added.

Ahmad Zaini said MBSB has had to be very selective in the onboarding of new businesses in the current prolonged pandemic environment.

“We are very mindful of how we do this onboarding. This is part of our big strategy to ensure the quality of our assets are being observed. We will have to avoid the tourism and airline industries, ” he said.

“We have to be a bit more cautious with the retail segment as we would basically suffer losses from any (lockdown declaration) by the authorities.

“Moving forward, we must have the right segment. The ones that have deteriorated are the existing assets but the new assets will go through a very rigid appraisal process to ensure there will be no slippage in quality, ” he added.

Meanwhile, Ahmad Zaini said he expects MBSB’s profitability to be sustained or even improved compared with last year.

“But this would depend on the economic conditions of the country. We are trying to push more revenue streams. We have been hit by the pandemic last year. Our push for certain fee-based incomes and trade financing is still on the cards, ” he said.

He said non-performing loans (NPLs) have spiked slightly but most of these are from its previous customers.

“It is manageable and it is not to a point where it is frighteningly high. In terms of trend, yes it has gone up slightly – our gross NPL position, ” he added.

On the outlook for the immediate term, Ahmad Zaini said it can be quite difficult to have even a two-year visibility.

However, he said that with the country’s immunisation rate improving, coupled with the announcement on the National Recovery Plan, MBSB expects the economic recovery to regain momentum.

“We expect total deposits to increase further in the second quarter following a 5.12% growth in the first quarter, ” he said.

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