MBSB posts stronger Q2
Shares actively traded on merger approval with AFB
PETALING JAYA: Malaysia Building Society Bhd (MBSB), which has received regulatory approval for its proposed merger with Asian Finance Bank Bhd (AFB), has announced stronger profitability for the second quarter ended June 30, 2017 (Q2’17).
Net profit for the latest quarter came in 44.56% higher to RM91.08mil compared to RM63.01mil in the same period a year ago on the back of a higher income from net financing/loans, investment activities and lower cost of funds.
Revenue for Q2’17 came in flattish at
RM813.41mil.
The group’s gross loans and financing recorded a year-to-date growth of 2.19% to RM36.06bil, mainly contributed by higher corporate financing disbursements, but partly set off by a slight contraction in the retail base, the company said in a statement.
Annualised return on equity stood at 5.7%, while annualised return on assets stood at 0.87%.
“Asset quality has improved with a reduction in the net impaired financing/loans ratio by 0.47 percentage points to 2.84% compared to Q2’16. This is contributed by strengthened collection and recovery strategies,” the company said.
Meanwhile, its corporate segment’s strategic business expansion had increased the asset composition between retail and corporate to 79:21 compared to 81:19 as at Dec 31, 2016 and is progressing well towards the group’s target of a 70:30 ratio by the year 2019.
Total assets recorded a year-to-date growth of RM1.6bil or 3.72% to RM44.88bil.
President and chief executive officer Datuk Seri Ahmad Zaini Othman said that the financial institution was encouraged with the results, which was “a marked improvement from last year’s performance and it also indicates the company’s continued ability to sustain revenue growth”.
“In line with its efforts to expand the corporate segment, we shall develop special programs for equipment financing, seek more effective approaches to increase the generation of fee income via wealth management as well as corporate advisory services,” he added on the business strategies for the rest of the year.
On the approval of the merger with AFB, Ahmad Zaini said it was positive news much welcomed by all stakeholders.
“Prior to this, we have actually established key plans and activities to ensure a smooth integration process, so now it’s the time to get the ball rolling.”
Shares of MBSB were actively traded yesterday following news that the Finance Minister had granted approval for its proposed merger with AFB pursuant to the Islamic Financial Services Act 2013 on Friday.
At market close, the stock gained 1.57% or two sen to RM1.29 on 23.15 million shares traded, making it one of the most actively traded stocks yesterday.
MBSB disclosed in December last year that it planned to negotiate with the existing shareholders of AFB, namely, Qatar Islamic Bank (66.67% stake), RUSB Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain WLL (6.67%) for a proposed merger of the two financial institutions.
The proposed merger will create the second-largest Islamic bank in the country with total assets of around RM47bil and transform MBSB into a full-fledged Islamic bank.
With a banking status, MBSB, which is 65.56% owned by the Employees Provident Fund, will have access to cheaper funding and broaden its revenue stream.