Mbsb Shareholders Aye Midf Acquisition Deal

PETALING JAYA, July 27 (Bernama) -- Malaysia Building Society Bhd (MBSB) has received shareholders' nod for the proposed acquisition of Malaysian Industrial Development Finance Bhd (MIDF) from Permodalan Nasional Bhd (PNB) in a RM1.01 billion deal.

The purchase would be satisfied via the issuance of 1.05 billion MBSB shares, representing 12.8 per cent of the group’s enlarged share base, to PNB at 96.52 sen per share, it said in a statement in conjunction with the group's extraordinary general meeting today.

Following the proposed deal, which is expected to be completed next month, MIDF will become a wholly-owned subsidiary of MBSB and PNB will emerge as a substantial shareholder of MBSB with an equity stake of 12.78 per cent.

The Employees Provident Fund’s stake in MBSB will reduce to 57.45 per cent from 65.87 per cent.

MBSB's new group chief executive officer (CEO) Rafe Haneef said the merger is strategically compelling for both banking groups.

He said the enlarged group would give a wider set of products and services to cater for certain sectors within the three business lines of corporate, consumer and commercial banking.

The group will be able to offer end-to-end banking services comprising consumer banking, stockbroking and asset management, commercial banking, small and medium enterprise (SME) and development finance as well as corporate and investment banking, he said.

“This (merger) also gives us a bigger capital base. We now have more capital, allowing us to grow our assets with total assets combined (amounting) to over RM63 billion, (and this) is just the right size for the market segment we want to play in.

“With the financing amount of about RM42 billion and excess capital, we have a huge potential to double this financing load. 

“We want to (compete) in the small and medium enterprise (SME) segment as there will be higher growth potential that can increase our asset growth probably in the next two to three years,” he told reporters after the meeting.

Rafe said the SME segment would be the biggest beneficiary in the MBSB-MIDF merger which would create a bigger opportunity for the enlarged banking group in the commercial banking segment. 

He said the merger would ensure that the SME segment would be well served and allow additional products and services to be offered.

“So, not only can we offer traditional SME financing, but we can also blend the financing with development finance and grants,” he said. 

Meanwhile, Rafe anticipated that the integration between MBSB and MIDF would be realised in the next 12 to 24 months.

He said both entities can access the deposit banking business and offer customers cash management solutions through their branches and digital channels.

“The complete suite of products by MBSB and MIDF will hopefully give us greater retention power with our customers. To bring this integration across consumer, corporate and commercial, I would assume if the execution is very focused, we could probably see the integration (to be realised) in 12 to 24 months,” he said.

Additionally, the enlarged group will be able to serve customers through their combined digital capabilities and a network of 53 branches nationwide, comprising 47 branches from MBSB Bank and six from MIDF.

Commenting on a recent news report about the possible appointment of the former CEO of Retirement Fund Inc (KWAP) Datuk Wan Kamaruzaman Wan Ahmad as chairman of the enlarged MBSB-MIDF group, Rafe said the market would know in due course.

“Probably in the next few weeks, we should be able to get official confirmation and then we can update the market,” he added.

-- BERNAMA