(File pix) Malaysia Building Society Bhd (MBSB) president and chief executive officer Datuk Seri Ahmad Zaini Othman says shareholders' approval would also allow the company to move forward in realising its aspirations to become a full-fledged Islamic Bank in Malaysia.

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) shareholders today approved the acquisition of the entire stake in Asian Finance Bank Bhd (AFB) for RM644.95 million.

The acquisition will be paid by cash amounting to RM396.89 million and the issuance of 225.51 million shares at an issue price of RM1.10.

President and chief executive officer Datuk Seri Ahmad Zaini Othman said the approval would allow the company to move forward in realising its aspirations to become a full-fledged Islamic bank.

"Everything is on track and we will be able to conclude the share purchase agreement soon.

"We believe the MBSB-AFB merger will spearhead MBSB's growth and allow us to have a competitive edge in the financial industry," he said at the company's extraordinary general meeting here today.

Ahmad said the acquisition would not impact the company's cash balance, given its ample funds.

"The acquisition provides opportunity for us to participate in the growth of the Islamic banking segment both locally and internationally," he said.

The merger will also enable MBSB with access to funding sources that were not previously available such as current account deposits and interbank funding.

Hence, he said MBSB will be in the position to offer an end-to-end proposition of Islamic banking products and services such as trade facilities, investment advisory services and wealth management products.

The integration between MBSB and AFB is expected to be completed in March this year.

"We have started the integration process, which would provide business opportunities such as in trade-finance.

"We also need to study and look at the potential business income to ensure feasibility and viability of our business model," he said.

He further pointed out that the acquisition would allow the company to utilise AFB's banking license, which in turn would strengthen its financial services.

"There will be no voluntary separation scheme (VSS) and mutual separation scheme (MSS)," he added.

The integration would not reduce the company's headcount, although a few management under contract services might not be renewed.

MBSB did not intend to open more branches, instead it would emphasise on maximising its 44 branches to fit in business agenda.

"We will also upgrade our banking system over the next few months to provide efficient service rate," he said, adding that the company's loan growth is expected to be about three per cent inline with the local industry projection.

MBSB is still retaining its targeted business mix of 70 per cent retail business and 30 per cent corporate business.

Both segments including property, small medium enterprise and affordable housing.

The financial services provider would focus on working capital for both corporate and trade financing as well.