We intend to add value by establishing new delivery channels, says Ahmad Zaini
By TMR / Pic By HUSSEIN SHAHARUDDIN
Malaysia Building Society Bhd (MBSB) will build on its full-fledged Islamic bank status to roll out new products and add value as it nears the completion of its takeover and merger with Asian Finance Bank Bhd (AFB).
“While we shall remain committed to doing what has always been profitable — for example, the affordable housing projects and the penetration in selected small and medium enterprise sectors — rolling out new products in the immediate years shall be a very positive development for the new entity,” MBSB president and CEO Datuk Seri Ahmad Zaini Othman noted in a statement this week.
The finance company intends to add value by establishing new delivery channels to reach out to a larger prospective customers base, he added.
MBSB received shareholders’ approval for the RM644.95 million acquisition of AFB on Jan 23 this year, which involves the company transferring its Shariah-compliant assets and liabilities to AFB.
When completed, the group is to offer Islamic banking services to retail and wholesale customers including deposit taking, wealth management, foreign-exchange, investment banking, debt capital management and trade finance.
The acquisition is scheduled to be completed in the first quarter of this year (1Q18) and will result in MBSB becoming Malaysia’s second-largest standalone Islamic bank with RM47.81 billion in assets.
This comes as the company tripled its net profit to RM123.98 million for 4Q17, on higher operating profit, lower funding costs and impairments.
The lower allowances for impairment losses on loans, advances and financing was in line with the company ending its impairment programme in 4Q17, its filing on Tuesday noted.
Gross income from corporate loans and property financing was higher for the quarter due to increase in the lender’s financing assets base.
Personal and auto financing brought in lower gross income due to the decreasing portfolio bases.
Its 4Q17 revenue was flat at RM818.27 million compared to RM819.4 million in 4Q16.
For the full financial year 2017 (FY17), MBSB more than doubled its net profit to RM417.13 million from the RM201.41 million made in FY16, despite FY17 revenue falling by 0.3% year-on-year (YoY) to RM3.26 billion.
The group’s gross financing and loans for the fiscal year contracted by 3.1% YoY to RM34.2 billion due to the reclassification of selected impaired retail financing and loans to financial assets held-for-sale.
This was offset by the annual growth of 10% YoY and 16.3% YoY noted in its gross corporate and property financing respectively.
MBSB’s net impaired financing and loans ratio improved by 0.76 points to 2.11% in FY17, while its gross impaired financing and loans coverage improved by 30.28 points to 139.52%.
It has recommended a single-tier final dividend of five sen for the fiscal year on the back of 7.1 sen in earnings per share for the year.