MBSB gets nod for talks on proposed merger with Asian Finance Bank

PETALING JAYA: Malaysia Building Society Bhd (MBSB) has received Bank Negara’s (BNM) approval for talks on a proposed merger with Asian Finance Bank Bhd (AFB).
This is the latest proposed corporate exercise for MBSB after its aborted merger plan with Bank Muamalat in 2016 as well as a three-way merger with CIMB Group Holdings Bhd and RHB Capital Bhd in 2015.
In a filing with the stock exchange, MBSB said it received a letter from the central bank dated Dec 21, 2016 stating no objection in principle for it to start negotiations with the existing Middle Eastern shareholders of AFB, namely Qatar Islamic Bank (66.67%), RUSB Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain WLL (6.67%), for the merger.
The negotiations are to be completed within the next six months.
“Further details of the proposed merger will be announced in due course,” MBSB said.
MBSB shares rose half a sen to close at 90 sen yesterday on 1.96 million units traded.
AFB, a full-fledged Islamic bank that was incorporated on Nov 28, 2005, has a branch each in Kuala Lumpur and Johor Baru as well as a representative office in Jakarta, Indonesia, its website shows.
For the nine months ended Sept 30, 2016, AFB reported a net profit of RM4.54 million, an 18.8% drop compared with RM5.58 million in the same period last year.
MBSB has a goal to become an Islamic financial institution by 2020 through merger with an Islamic lender. It has ramped up efforts to become a full-fledged financial institution through the implementation of its 2016 Business Plan, which is centred on six areas, namely, business focus, right pricing, asset quality, cost cutting, retail collection and information technology initiatives.