MBSB gets shareholders’ nod for RM644.95 mln acquisition of AFB

KUALA LUMPUR: Malaysian Building Society Bhd ( MBSB) has received shareholders’ approval for the RM644.95 million acquisition of Asian Finance Bank Bhd (AFB) to pave the way for the financial institution to become a full- fledged Islamic bank.

President/ chief executive officer, Datuk Seri Ahmad Zaini Othman, said the company aimed to complete the integration of MBSB and AFB by this March.

“We expect the integration to be completed by March and will unveil a new name in April,” he told reporters after the company’s extraordinary general meeting yesterday.

He said upon completion of the acquisition, the company would transfer all of its shariah compliant assets and liabilities, excluding non-performing loans, to AFB in tranches.

Ahmad Zaini said the acquisition enables MBSB to access funding sources that were not previously available, such as current account deposits and interbank funding.

“MBSB will also be in a position to offer an end- to- end proposition of Islamic banking products and services such as trade facilities, investment advisory services and wealth management products, as well as to expand our banking services to small and medium entrerprises,” he added.

He said the company would also retain its current workforce, excluding a few positions at the management level.

“We are not exercising a voluntary separation scheme ( VSS) or a mutual separation scheme (MSS). We will engage a human resources consultant to see the best fit,” Ahmad Zaini added.

MBSB will also retain the current portion of 70 per cent retail loans and 30 per cent corporate loans despite the addition of new product offerings, while loans growth is expected to be around three per cent this year, in tandem with the industry’s average.

MBSB entered into a conditional share purchase agreement in November last year with the shareholders of AFB - Qatar Islamic Bank, Financial Assets Bahrain WLL ( FAB), RUSD Investment Bank and Tadhamon International Islamic Bank - to acquire the entire equity interest in it for RM644.95 million.

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

The exercise 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).