MBSB targets RM1.2b in personal loans

By Zuraimi AbdullahPublished: 2009/05/01

MALAYSIA Building Society Bhd (MBSB) (1171) plans to multiply its personal financing business by targeting to dish out loans totalling RM1.2 billion to individuals this year.

Its chief executive officer Ahmad Zaini Othman said MBSB normally lends about RM17 million a month but now plans to lend out some RM100 million a month, especially to civil servants.

The group, which has 25,000 civil servants as its customers, also plans to open two new branches in Kulim and Bintulu this year to complement its current network of 30.

"This is part of relooking and refocusing of our core business activities," said Ahmad Zaini, who joined MBSB three months ago.
MBSB, a unit controlled by the Employees Provident Fund, also plans to reduce bad debts and rehabilitate certain property projects it helped financed before.

It plans to trim non-performing loans (NPLs) level to 20 per cent this year, from 23 per cent in 2008, Ahmad Zaini said. This will be cut further to 15 per cent in 2010.

"Much of our NPLs are legacy issues. There are NPLs that have been with us since eight to 10 years ago," he said after MBSB's annual general meeting in Kuala Lumpur yesterday.

The biggest one amounts to RM200 million but Ahmad Zaini stressed that there is still hope to recover it.

In reviving certain projects, MBSB is looking for more "white knights", although it already has some companies helping it to revive property projects worth some RM200 million so far.

Last year, MBSB saw double-digit growths in almost every business aspect, and Ahmad Zaini remains bullish of its outlook this year, although he did not elaborate.

For the year ended December 31 2008, MBSB' group's pre-tax profit edged up 24.6 per cent to RM54 million.