MBSB EYES 4PC LOAN GROWTH
But lender will shy away from sensitive segments such as tourism, says CEO
MALAYSIA Building Society Bhd (MBSB) is targeting up to 4.0 per cent loan growth this year and next year, backed by its revised business plans that focus on civil servants and government contracts.
Its president and chief executive officer (CEO) Datuk Seri Ahmad Zaini Othman said trade finance for exports of certain commodities would remain strong but MBSB would be shying away from sensitive segments such as tourism.
“For MBSB, we put more emphasis on personal financing and funding of such products,” said Ahmad Zaini at MBSB’s after its virtual annual general meeting yesterday.
He added that Treasury products and services and realisation of MBSB’s investments would also supplement its income and profit in the coming months.
MBSB incurred higher expected credit loss (ECL) in the first quarter of this year due to the staging deterioration for loans and financing.
The group has identified customer engagement as one of the key measures for its return to profit in the next quarter.
MBSB has also granted a sixmonth loan moratorium to eligible customers from April 1, in line with the Covid-19 relief measures by the government.
“However, I believe the bank may not be in the position to look at it (extending the moratorium) until we see the hard facts. Restructuring and rehabilitation are common things for financial institutions.
“During the moratorium period, there was a lot of mismatch on how we look at cash flow and accounting standard. The mismatch will result in modification loss and NCL (net credit loss). The modification loss is the main culprit in whether we incur a loss or reduction in profit,” he said.
He said MBSB would continue to support customers and small and medium enterprises based on merit.
The total collection from customers across the moratorium period stood at RM1.5 billion.
“But we have been encouraging customers to regularise the instalment arrears, which will then improve our ECL and financial results for the coming quarters,” he said.
Meanwhile, MBSB said it was looking into listing the banking group.
This could be done after the group’s structure was reorganised and all its conventional assets converted and non-converted assets disposed of.
Since April 2, MBSB has converted about 25 per cent, or RM659 million of conventional assets, into Islamic assets.
“We expect to convert all our existing conventional assets to Islamic next year.”
It has gross balance of RM1.84 billion of conventional loans as of March.
“The conversion is an ongoing process. When Bank Negara Malaysia gave us the licence, it expected us to do the convergence within three years. So far we are on track,” he added.