KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) is converting the remaining 10 per cent or RM1 billion conventional asset to the Islamic variant, in two years.
Its president and chief executive officer Datuk Seri Ahmad Zaini Othman said MBSB would gradually convert its conventional assets including home mortgages to become a full-fledged Islamic bank.
“Currently, we have successfully converted about 90 per cent of our assets to Islamic assets,” he told reporters after the company's shareholders meeting, today.
On April 2, 2018, MBSB had successfully vested its Shariah compliant assets and liabilities amounted to RM44 billion.
Ahmad Zaini said there will be no significant investment for its banking business this year, citing that the board has already approved RM250 million budget to upgrade the information and technology infrastructure.
“We don't foresee other significant investment apart from the RM250 million allocation for the IT and digitalisation programme for MBSB's bank unit over the next 12 months,” he added.
He said MBSB had also given its views to the new government on certain things that could be improved in terms of affordable homes and higher education financing as well as money lending activities.
MBSB acquired the entire stake in Asian Finance Bank Bhd (AFB) worth RM644.95 million in April this year.
MBSB said the acquisition would spearhead its banking platform, allowing its participation in the Islamic banking segment both locally and internationally.
He said the company's business outlook is expected to be significantly strong and stable but cautioned it needed to be aware of the country's situation.
“In certain areas like the affordable homes, it should remain stable and strong. However, over supply in the commercial property side remains the same.
“We want to avoid that segment. We want to push more on transactional banking like trade, finance and trading," he said.
Ahmad Zaini said MBSB's loan growth projection is expected to hover between three to five percent this year, driven by affordable housing and business loan financing.
"We are still doing on the commercial side but we are very selective and make sure we don't go overboard," he said, adding that most importantly was the right location and developer.
MBSB's first-quarter (Q1) ended March 31, 2018 net profit tripled to RM316.79 million from RM101.32 million a year ago due to allowance write back for impaired loans.
Its Q1 revenue was slightly higher to RM815.04 million from RM811.2 million previously.