MBSB expects integration with Asian Finance Bank by March

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB), which has received shareholders’ approval for the acquisition of Asian Finance Bank Bhd (AFB) at its EGM today, expects complete integration with AFB by March this year.
MBSB president and CEO Datuk Seri Ahmad Zaini Othman said MBSB is not laying off any staff with the merger, except for one or two management under contract.
“There’s no VSS or MSS at this stage. In terms of fitting the manpower, we’ve engaged the HR consultant to look at the best fit in the new bank, which is more of the management level. For other staff, we will cross-engage them at the respective units,” he told a press conference after the group’s EGM.
“We’ve started the integration. We’re looking at making inroads into trade finance, funding opportunities, current account & savings account, fee-based income and other businesses. We also need to study the readiness for infrastructure and IT platforms. Part of the whole work that we’re looking is to ensure feasibility and viability of this new bank remains,” said Zaini.
MBSB has 44 branches while AFB has two branches, which Zaini said it is not looking at expansion at this stage.
“We need to be able to maximise the existing branches. There could be some relocation of branches to fit in with our whole business agenda.”
Zaini stressed that the acquisition of AFB, which has assets of about RM2 billion, is not for the expansion of existing assets but for AFB’s banking license and the opportunity to look at some of the business streams like trade finance and areas that MBSB, a non-bank lender, has not been able to do.
There will also be a new name for the merged entity, which cannot be revealed yet.
“We’re looking at April for the launch of the new name,” said Zaini.
MBSB will acquire the entire stake in AFB for RM644.95 million to be satisfied through cash and shares. The merger will create the second largest Islamic bank in the country and enable MBSB to emerge as a full-fledged Islamic bank in Malaysia with access to funding sources that were not previously available such as current account deposits and interbank funding.
MBSB will also 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 as well as to expand its banking services to SMEs.
Zaini said it will still maintain a 70:30 ratio of retail and corporate businesses, adding that MBSB is looking at a 3% loan growth this year, in line with industry consensus.