MBSB: Supply glut in high-end property

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) president and chief executive Datuk Seri Ahmad Zaini Othman says there is a supply glut in the high-end property segment.

“Sentiment for affordable houses is there, but there is a bit of a glut in the high-end properties.

“I think what Bank Negara is saying, in terms of being more cautious, I think is indeed true,” Ahmad Zaini told reporters on the sidelines of a signing ceremony for a solar farm financing project yesterday.

He said that although the bulk of MBSB’s loan portfolio is for the property sector, it is mainly for medium to affordable houses.

MBSB’s property loan approval rate stands at about 55%, he added.

The property market has been in the limelight with the recent decision by the government to freeze developments of future high-rise luxury residential projects with units costing more than RM1mil.

The decision was made following Bank Negara’s findings on the mismatch of housing demand and supply in the country.

The central bank said there was a huge amount of serviced apartments, small office/home office, retail and office space that were coming onstream in the next four years.

Meanwhile, on the merger exercise between MBSB and Asian Finance Bank Bhd (AFB), Ahmad Zaini said “there is no turning back and the merger is going to happen”.

“We already paid 10% for the asset and it is a matter of integration. The whole process is expected to be completed by end-January and we will assume 100% control,” he said. MBSB is in the midst of acquiring AFB in a RM644.95mil deal that would give it the licence to become a full-fledged Islamic bank.