MBSB to grow east Malaysian contribution to 30%

KUALA LUMPUR (Jan 18): Malaysia Building Society Bhd (MBSB) aims to increase revenue contribution from east Malaysia to 30% this year from more than 20% in 2011, said CEO Datuk Ahmad Zaini Othman.

"Presently, the east Malaysian side contributes more than 20% and we are aiming to push it (up by) another 10% to 15% this year," he said at the signing ceremony between MBSB and Labuan Shipyard Engineering Sdn Bhd (LSE) for a project financing facility of RM51 million. The group began establishing its offices and branches in Sabah two years ago and currently has a total of 14 branches there.

The signing with LSE for a financing facility of RM51 million marks the group's foray into contract financing for the oil and gas sector and is part of the company's mission to diversify its loan portfolio.

It will set up a dedicated project monitoring department in Kota Kinabalu, Sabah this year.

For the nine months ended Sept 30, the group generated RM327.1 million in profit on the back of R1billion in revenue.

Ahmad Zaini is bullish on the group's prospects for the year and plans to grow its loans book between 20% and 25% in 2012 with personal loan financing, mortgages and its new venture into hire-purchase financing, to be launched next month.

"We will take it slow and easy and do a bit more on high-end vehicles," he elaborated on his strategy on MBSB's hire-purchase facility.

He noted that the group would be able to achieve single-digit non-performing loan (NPL) ratio, adding that it has progressively pared down its NPL ratio from about 25% in 2009 to 11% currently.

Ahmad Zaini said MBSB will carry out at least one asset-based securitisation programme of RM4 billion to RM5 billion this year, depending on the growth of its assets and market conditions.

In 2011, MBSB carried out a securitisation programme of RM1.5 billion with Cagamas, the national mortgage corporation.

Asked on rumour of a possible merger or acquisition, Ahmad Zaini said presently there were no plans on the table yet and it was up to the shareholders to decide should a situation arise. To him, the topic of merger and acquisition has always been a topic discussed by the board but it has always been a case of suitable pricing.

"As far as MBSB is concerned, it is making good profits and good returns for the shareholders.

"I think the shareholders would have to weigh between what they are already earning and what they could earn from such an exercise." he added.

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