KUALA LUMPUR: Malaysia Building Society Bhd’s (MBSB) move to strengthen its presence in Islamic banking is in line with majority shareholder Employees Provident Fund’s (EPF) endeavour.
MBSB is 65 per cent-owned by EPF.
EPF had earlier this month rolled out its syariah-compliant fund and expressed confidence in the potential of Islamic finance in the country and overseas.
In an interview with Business Times recently, MBSB president and chief executive officer Datuk Ahmad Zaini Othman said being a prominent Islamic player would help the firm’s growth plan.
“Being a prominent Islamic finance player offers a strong value proposition if we were to merge or be acquired in the future,” he said, but did not reveal whether MBSB was talking to any entity on merger possibilities.
“I am very pleased to say since we started our Islamic finance push some two years ago, we have seen Islamic loans growth of almost 85 per cent.
“The potential of Islamic finance is massive in comparison to conventional finance. When an industry is this young, there is so much to explore and capitalise on.
“The fact that Malaysia is the hub of global Islamic finance also plays a part in this,” he said.
MBSB aspires to graduate from a non-lender into a full-fledged Islamic bank to increase its competitiveness.
With a bank status, MBSB will be able tap new segments and provide more financial services.
For the first six months ended June, MBSB’s net profit dropped 53.4 per cent to RM97.8 million, despite an 11.6 per cent jump in revenue to RM1.6 billion.
The first-half results were below estimates, with operating income declining 1.8 per cent as management continued to focus on corporate loans portfolio in place of the higher-yielding personal financing portfolio.