MBSB to expand loan portfolio to RM2b

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB), a financial institution which largely caters to government servants, is looking to grow its loan portfolio aggressively in the financial year ending Dec 31, 2010, with a focus on expanding its corporate loans business, its chief executive officer, Ahmad Zaini Othman said.

MBSB targets to disburse RM2 billion in financing in FY09, compared to around RM1.3 billion last year, he said on Tuesday, Nov 10.

“We have more aggressive plans for next year and are targeting big numbers in our personal financing portfolio, as well as aiming for strategic growth in our mortgage and contract financing businesses,” Ahmad Zaini said, adding however, its targets for next year had not been finalised yet.

He also said MBSB was looking at achieving 30% growth in its corporate banking assets in FY10, equivalent to between RM700 million and RM800 million in new receivables.

“We are aiming to expand our corporate loans portfolio next year, especially in the property side, which we are known for. We want to provide bridging loans, term financing, and are looking towards building up our contract financing business, especially with the government,” he added.

The company is 62.41% and 11.09%-owned by the Employees Provident Fund and Permodalan Nasional Bhd, respectively.

Meanwhile, of its RM2 billion in loans to be disbursed this year, he said these comprised mainly of personal financing, which was expected to amount to RM1.3 billion by year-end, with the remainder of loans made up of mortgages and corporate loans.

He added of the RM1.3 billion in personal loans, RM1 billion would consist of new loans, with the company having disbursed around RM850 million already currently.

As at Sept 30, the company’s total assets had risen 11.3% to RM8.1 billion, from end-Dec 2008, driven by growth in its net loan and financing of 12.8% to RM7.7 billion, he said.

Ahmad Zaini was speaking to reporters here after signing a deal with Cagamas Bhd, Malayan Banking Bhd, Affin Bank Bhd and Eon Bank Bhd for a RM500 million with recourse securitisation of its mortgages.

The securitised mortgages, to be issued by Cagamas and taken up by Maybank, Affin and Eon, are the second tranche of MBSB’s RM1 billion program. The banks would commit to RM250 million, RM150 million and RM100 million, respectively.

Ahmad Zaini said the facility would be used to expand MBSB’s business activities, adding the first tranche, arranged in April this year, had already been utilised to give out more personal loans and mortgages.