MBSB receives green light from Bank Negara, Ministry of Finance for merger with Asian Finance Bank

PETALING JAYA: Malaysia Building Society Bhd (MBSB) has received Bank Negara Malaysia (BNM) and the Finance Ministry's approval for its proposed merger with Asian Finance Bank Bhd (AFB).

MBSB told Bursa Malaysia that it had received notification from BNM vide its letter dated August 18, that the Minister of Finance has granted approval for the proposed acquisition by MBSB of 100% interest in AFB shares pursuant to the Islamic Financial Services Act 2013.

"Further details will be announced upon the finalisation and execution of the definitive agreement," the group added.

The proposed merger will create the second largest Islamic bank in the country with total assets of around RM48 billion.

MBSB aims to become an Islamic financial institution by 2020 through its merger with AFB. The full bank licence will allow MBSB to tap into new financial services segments which it cannot offer at the moment, such as trade facilities, collecting current account savings account (CASA) deposits and offering other interbank instruments to expand its business.

AFB, a full-fledged Islamic bank that was incorporated in November 28, 2005, has a branch each in Kuala Lumpur and Johor Baru as well as a representative office in Jakarta, Indonesia, according to its website.

MBSB shares fell one sen to close at RM1.27 on Friday, with some 1.59 million shares done, giving it a market capitalisation of RM7.52 billion.