PETALING JAYA: Malaysia Building Society Bhd (MBSB) has set a financing portfolio growth target of RM44 billion this year from RM42 billion last year, said group chief executive officer Rafe Haneef.
He said with a return on equity (ROE) of 5.2 per cent last year and about RM9.8 billion worth of equity, MBSB aims for a 4-5 per cent ROE by the end of 2024.
"We aim to grow financing by 8-9 per cent. Our current ROE is at RM42.9 billion as of the first quarter of 2024, hence, we are quite healthy in terms of growth in financing and we need to make sure the growth is giving us the right profit margin.
"Our guidance is two per cent in terms of net profit margin and at the same time, we need to make sure our cost is controlled," Rafe told reporters at the MBSB annual general meeting (AGM) media conference here today.
At the 54th AGM, which was chaired by MBSB chairman Datuk Wan Kamaruzaman Wan Ahmad, the company approved a dividend of 3.5 sen per ordinary share.
The bank also unveiled FLIGHT26, the group's strategic three-year business plan designed to boost profitability, during the AGM.
FLIGHT26 outlines four key missions, namely elevating the group's current account savings account (CASA) ratio to 20 per cent, expanding the financing portfolio to RM50 billion, increasing non-funded income to 15 per cent of net revenue, and achieving an optimal cost to income ratio of 50 per cent by 2026.
These initiatives are expected to substantially improve ROE, said Rafe.
"FLIGHT26 is all about bringing the CASA up, rebalancing the fixed deposit portfolio, releasing some of the high-cost institutional deposits, improve the net revenue and the gross impact ratio," he said.
To realise the goals, FLIGHT26 is supported by 30 transformation programmes or known as TP30 — these include 12 programmes in wholesale banking, six in commercial banking, nine in consumer banking, and three in digital banking.
Meanwhile, shareholders passed all resolutions during the AGM, including a significant proposal to rename the company from Malaysia Building Society Bhd to MBSB Bhd.
The change reflects the group's evolution into a larger banking entity following the merger with Malaysian Industrial Development Finance Bhd (MIDF) on Oct 2, 2023.
During the AGM, MBSB reported a profit after tax (PAT) of RM491.8 million for the fiscal year ended Dec 31, 2023, marking a 6.9 per cent increase from the previous year.
The group's total financing grew by nine per cent to RM42 billion which surpassed the industry's growth average of five per cent, while customer deposits surged by 30.58 per cent year-on-year, reaching RM47.62 billion.
Growth in deposits also marked progressive increase in CASA ratio from 6.22 per cent to 7.06 per cent.