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

By NG MIN SHEN / Pic By ISMAIL CHE RUS

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

Its president and CEO Datuk Seri Ahmad Zaini Othman (picture) 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 (court convened meeting) in Kuala Lumpur yesterday.

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) at this stage,” Ahmad Zaini said, adding that the group has engaged a human resources consultant to look into the best fit for the new entity, principally at the management level.

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 becoming a “very significant player” in providing working capital in areas such as trade financing, while its corporate segment will centre on the likes of property financing, affordable homes and certain small and medium enterprises.

It is also looking into funding opportunities for current accounts and savings accounts, as well as other businesses and fee-based income.

“We have a fully integrated business plan, so it’s now a question of how to execute and implement it. It will come in phases — within the next 12 months, you will see some announcements on things and initiatives we’re putting forward,” he said.

The group does not expect large impairments for 2018 following the conclusion of its impairment programme, which was undertaken in 2017 to pursue a banking platform model. Its earnings were dragged by impairments for almost two years prior to 2017.

“We don’t see any major impairments this year apart from normal provisioning. With the implementation of the Malaysian Financial Reporting Standard 9 this year, the thirdparty assessment is now at the validation stage. We are positive that the numbers are going to be acceptable to us come April,” Ahmad Zaini 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 stakeholders’ 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 secondlargest standalone Islamic bank with total assets of RM47.81 billion after Bank Islam Malaysia Bhd.

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