With the transfer of all MBSB’s Shariah-compliant assets and liabilities to AFB, MBSB Bank is the 2nd-largest full- edged Islamic bank in the country
By NG MIN SHEN / Pic By TMR
Malaysia Building Society Bhd (MBSB) has rebranded its recently acquired wholly owned subsidiary Asian Finance Bank Bhd (AFB) as MBSB Bank Bhd, now the country’s second-largest full-fledged Islamic bank with assets worth RM43.7 billion.
MBSB Bank president and group CEO Datuk Seri Ahmad Zaini Othman said the bank will provide Shariah-compliant products and services, such as consumer banking, business banking and trade financing.
“We will focus on building up our assets, but the larger focus is on transactional banking, such as fee-based income and trade finance.
“The bank will also focus on developing its financial technology (fintech) capabilities to attract more customers,” he told reporters at the launch of the rebranded entity in Kuala Lumpur yesterday.
MBSB finalised its acquisition of AFB in February for RM644.95 million with the latter becoming a wholly owned subsidiary of MBSB on Feb 7, 2018, which is now known as MBSB Bank from April 2, 2018.
With the transfer of all MBSB’s Shariah-compliant assets and liabilities to AFB, MBSB Bank is the second-largest full-fledged Islamic bank in the country.
Ahmad Zaini said the lender has no plans to offer stockbroking, investment banking or insurance services at present, as its aim is to provide financial services. However, it will be looking into bancassurance services through collaborations with takaful partners.
“Loan growth for the bank should come in at between 4% and 5% for this year, in line with the industry,” Ahmad Zaini said.
This will be driven mainly by the group’s key segments such as lending for affordable housing.
“Some eight to 10 of the 1Malaysia Civil Servants Housing (PPA1M) projects in Malaysia are financed by MBSB.
“We also have in the pipeline about RM5 billion to RM7 billion of undrawn property projects that we can disburse,” Ahmad Zaini said.
He said real estate comprises about 15% of the bank’s loan book.
About 73% of the bank’s loan portfolio is contributed by its retail base, which includes mortgages and personal financing.
The remaining loans are mainly from its corporate segment, which also includes property developers.
Meanwhile, Ahmad Zaini said the bank’s cost-to-income (CTI) ratio presently stands at around 22% to 23%. “For 2018, our CTI ratio should not breach 30%. Our staff strength stands at slightly above 1,500 people with 46 branches, which is quite lean and manageable, so we do not have plans for any voluntary separation scheme,” he added.
The lender has already embarked on several digitisation initiatives, including big data projects started in June 2017.
MBSB Bank plans to launch its fintech capabilities for wealth management and trade facilities by the third quarter of this year, and to have Internet banking facilities ready by end-2018.
“We have some seven to nine products readily available, which we will roll out over the next 12 months,” Ahmad Zaini said.