Malaysia Building Society Berhad

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MBSB Five Years Of Strong Performance

BackMay 22, 2008

Kuala Lumpur: MBSB reported an encouraging financial performance contributed by steady operating revenue from retail and corporate loan for the past five consecutive years.


MBSB track record have indicated an encouraging improvement



2003

(RM)

2004

(RM)

2005

(RM)

2006

(RM)

2007

(RM)

Profit After Tax (M)

-66.7

-31.8

38.8

40.2

53.3

Total Assets (B)

3.7

4.3

4.9

6.0

6.7

Revenue (M)

182.4

198.5

229.5

293.1

355.6

Deposits (B)

1.2

2.1

3.4

5.0

5.4


MBSB profit after tax grew from RM-66.7million in 2003 to RM53.4 million in 2007. The total assets grew by 81 % from RM3.7 million in 2003 to RM6.7 million in 2007. Revenue have increased by 95 % from RM182.4 million in 2003 to RM355.6 million in 2007.


The deposit grew by 361% from RM1.2 billion to RM5.4 billion. As at May 2008 our deposit stood at RM6.6 billion. The trend have indicated greater confidence from large corporate clients and individual depositors.

 

The breakdown are as follows:
 
Corporate : RM 3.2 billion - 48%

Retail : RM 1.3 billion - 20%

Islamic : RM 2.1billion - 32%

 

MBSB share prices increases from 0.51 cent in August 2003 to 1.28 cent as at current trading (20 May 2008). It has gone up as high as 1.76 cent in the 3rdquarter of 2007.


MBSB strategy to focus on financing of owner occupy of low medium and medium cost residential properties has contributed to the growth. The loans portfolios are all secured by properties at strategic locations.


By offering higher margin of financing up to 95 - 100 % and flexible terms and conditions to these group of customers are also another contributing factors of the growth. MBSB being the First Property Financier and have existed more than five decades in this country, have managed to fulfil million's of Malaysians dream come true to own a place call home.


Elaborating from our financial performance for 2007, profit for the year was contributed mainly due to higher interest income, and significant contribution of net income from Islamic banking operations.


Dividend to shareholders over the five years have increased every year from 2 cents in 2004 to 4 cents in 2007.


As a GLC company, MBSB had in 2007 announced its three years Headline KPI's as follows:
 
 


Target 2007

Achieved 2007

2008

2009

ROE

7%

10.55%

7.5%

8.0%

Revenue Growth

15%

27.44%

!5.0%

15.0%

Retail Loan Growth

25%

26.75%

25.0%

25.0%

 
All indicators for the Headline KPI's for 2007 surpassed its target set. The Return of Equity has improved significantly in 2007. Though it slightly reduced from 8.38% in 2005 to 8.20% in 2006 but at 2007 it has increased to 10.55%. Under the GLC initiatives, MBSB has announced its three years Headline KPIs up to 2009. MBSB performance has exceeded the target set for 2007 by 3.55% positive variance.

We welcome all the GLC's initiatives, and at MBSB, we have a dedicated team to implement each book and all books are on target. And to date we have reaped the benefit from implementing the initiatives. Among new initiatives or benefits we have achieved are through the Silver Book initiatives.

In line with the Silver Book Transformation Plan that GLCs have to move ahead its Corporate Social Responsibility (CSR) activities beyond philanthropy activities, we have embarked on initiatives to create benefits to society as an integral part of our company strategy and core business.

As part of the GLC's, we are playing our role as a responsible corporation by adopting two schools under the PINTAR programme, a three-year education programme that aims to assist rural school children to improve their academic performance in preparing them for a better future.

We started the PINTAR program in July 2007 with two schools in Bukit Mertajam i.e Sekolah Kebangsaan Machang Bubuk and Sekolah Kebangsaan Bukit Teh. We started off by contributing reading starter kits for 30 students who were unable to read as they enrol primary education. We supported in contributing reading materials for the schools resource centres, subscription of English newspapers under the Newspaper in Education programme with the New Straits Times, motivational programmes for students and teachers and educational trips. We adopted another 17 schools under the education initiative through our School Adoption Programme 2008. Our focus will be on assisting students prepare for their UPSR, PMR or SPM.

We have launched the first of its kind initiative, the MBSB Home Safety Campaign - Our Home - The Safest Place in May 2008. The rationale behind this initiative is to build a safer living environment for the society, build community knowledge on creating safer living environment, encouraging caring society and educating public on necessary actions and measures to be taken to ensure home safety. The focus of this campaign are on first aid, fire preventions and crime preventions. This effort will be the landmark for our core CSR activities. To date, the campaign road tour have gone to the northern region (Kedah) and east coast region (Kuantan). We will continue to other parts of the country to carry the message of home safety awareness. This initiative will be one of MBSB on going CSR activities.

Under the Red Book MBSB managed to reap a cost saving of 21% last year on total procurement spending. The Company have also achieved a 61:39 ratio of Bumiputra vendors participating in all procurement with 90% local content.

From 22 branches in December 2003, now the Company have 27 branches in operation throughout Malaysia. Seven (7) more branches will be opened, marking a total of 34 branches by year end 2008.

MBSB's 27 branch network are in Central Region 7 branches; Southern Region:7 branches; Northern Region 7 branches; East Coast Region 2 branches and East Malaysia 4 branches.

MBSB staff strength increases in tandem with the expansion of the branch network. From 478 in December 2003 it increased to 724 as to date, which was mainly to support our business growth, to extend excellence customer services and to strengthen our marketing and recovery team.

The extension of the delivery channels and staff strength are in line with the corporate strategy to capture new market segment of small scale developers and land owners by offering bridging loans, in return of end financing from this line of customers.

Previously MBSB business concentration were only on housing loans and deposits. Now we have diversified into other products such as personal loan, saving account, contract financing, bancassurance, and credit card & will writing.

MBSB have diversified its personal financing products to I - Do Financing-i, Graduate Financing-i, Exec-Entrepreneur Financing-i, Gentlemen Farmer Financing-i, Home-Improvement Financing-I and MBSB Assist. Currently, we are approving RM 20 million monthly for all the personal financing - i products. The personal loan customers portfolio are about 80% angkasa code.

Focus in 2008 will continue to be its core mortgage and other retail businesses. MBSB is up beat to rake in higher pretax profit in the financial year 2008.

MBSB is moving forward into developing more syariah compliance products. The Company is seriously looking into building a strong- based and gradually phasing out the conventional products. The Company is positive in achieving 104.7 million revenue in Islamic business based on 96% growth of 2007.
 
Issued by:

Corporate Communications Unit, MBSB
Contact Rohani Mazlan at
Tel: 03-2099 3516 Fax: 03-2095 4260
e-mail: rohanim@mbsb.com.my