MBSB shareholders okay AFB acquisition, no VSS or MSS on the cards

By NG MIN SHEN / pic by TMR file

Malaysia Building Society Bhd (MBSB) has received shareholder approval for its proposed acquisition of Asian Finance Bank Bhd (AFB), which will enable it to become a full-fledged bank with an Islamic banking licence.

Its president and CEO Datuk Seri Ahmad Zaini Othman said the non-bank lender will be launching its new brand after completing the staff integration process by March this year. 

“There will be a change of name (of the new entity), which we will reveal in April,” he told reporters after the company’s EGM and CCM in Kuala Lumpur today. 

In light of the integration, the group will not be reducing its headcount, save for “one or two management (personnel) under contract”.

“We are not laying off anybody. There will be no voluntary separation scheme (VSS) or mutual separation scheme (MSS),” Ahmad Zaini said.

Expansion is not on the cards at the moment, as the group’s focus will be on maximising its existing network and looking into possibly relocating certain branches.

MBSB currently has 44 branches across the country, while AFB has two. 

Ahmad Zaini said the company will be focusing largely on providing working capital in areas such as trade financing, as well as corporate financing for affordable homes and certain small and medium enterprises (SME) segments. 

“We have a fully integrated business plan which we are now looking into, as to how to execute and implement the plan. It will come in phases within the next 12 months – these plans and initiatives for the group,” he said.

Upon becoming a fully licensed Islamic bank, the lender is expecting to register loan growth in line with banking industry projections of 3% year-on-year for 2018.

The group also garnered stakeholder approval for its proposed transfer of MBSB’s shariah-compliant assets and liabilities (A&L) to AFB in tranches, for a consideration to be determined later based on the book value of the identified A&L at the latest practicable date prior to the transfer.

To recap, MBSB entered into a conditional share purchase agreement in November last year with the shareholders of AFB to acquire the entire equity interest in AFB for RM644.95 million.

The acquisition will be satisfied through a combination of RM396.89 million in cash and the issuance of 225.51 million new shares in MBSB at an issue price of RM1.10 apiece.

It will result in AFB becoming a wholly-owned subsidiary of MBSB, which in turn will become the country’s second-largest standalone Islamic bank with total assets of RM47.81 billion after Bank Islam Malaysia Bhd (BIMB).