Malaysia Building Society Bhd (MBSB)

Malaysia Building Society Bhd (MBSB)

Postby winston » Sun Jun 07, 2015 10:42 am

not vested

MALAYSIA BUILDING SOCIETY BHD By Gurmeet Kaur

Current stock price: RM1.86

MALAYSIA Building Society Bhd (MBSB) traded at RM1.77 – its lowest level this year. The stock is up by 4.5% to close at RM1.86 yesterday.

But at this price, the stock is still down by about a quarter year-to-date. It is also the cheapest finance stock with a price to book (P/BV) of 1.02 times.

Eight months ago, the company was valued at a P/BV of 1.91 times or RM2.82 under a proposed three-way merger.

But this alone is not good enough a reason to consider the stock for one’s portfolio. Business-wise, MBSB is being transformed into a different entity that will reduce its reliance on personal financing loans that it is historically associated with.

Early this year, the company kicked off a five year business plan (to run from 2015 to 2019) where it hopes to achieve a corporate financing ratio of 30% from 15% now. Retail financing, meanwhile, will be brought down to 70% from 85% . This strategy will cushion the expected slowdown in personal financing, which has been hit by a slew of tightening measures.

It has revived plans to convert into a full-fledged Islamic bank after the proposed merger with CIMB Group Holdings Bhd and RHB Capital Bhd was aborted early this year.

For this, it has made known that the preferred way is a merger with an existing Islamic financial institution.

According to reports quoting its chief executive officer Datuk Ahmad Zaini Othman, a corporate exercise could take place as early as this year or next. MBSB, in which the Employees Provident Fund (EPF) has a 64% stake, is understood to be keen on Bank Islam Malaysia Bhd as a merger partner.

To prepare itself for a potential merger and acquisition, the company is planning a capital-raising exercise of about RM3bil, to be announced sometime in the middle of this year. It is adopting a stricter coverage standard for loan impairments as it prepares to become an Islamic bank.

It is working towards a 100% financing loss coverage, from 80% now, matching the level most banks have in the country.

The downside is that earnings will remain weak for the short-term.

Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Malaysia Building Society Bhd (MBSB)

Postby winston » Sun Jan 03, 2016 9:05 am

not vested

MALAYSIA BUILDING SOCIETY BHD

DESPITE this year’s botched three-way merger between Malaysia Building Society Bhd (MBSB), CIMB Group Holdings Bhd and RHB Capital Bhd, MBSB’s shares may well see a large appreciation in value if another merger comes to fruition.

Back in October, Bank Negara gave the go-ahead for MBSB to start merger talks with Bank Muamalat Malaysia Bhd, an exercise expected to be completed end of this month.

A potential deal would pave way for the creation of the country’s largest standalone Islamic bank with a combined asset size of about RM60bil.

MBSB, which is currently a non-bank lending firm, will be boosted by Bank Muamalat’s commercial deposits base.

Assuming a merger goes through, the enlarged banking entity could assume MBSB’s current listing status but with improved valuations.

Presently, MBSB’s stock is trading at around RM1.40 per share, or a large discount to its net assets per share of RM1.71.

With a larger asset base than that of BIMB Holdings Bhd, which owns Bank Islam, a new listed entity will command richer valuations.

By way of comparison, BIMB Holdings currently has a market capitalisation of RM5.69bil and an asset size of RM54bil as at March.

MBSB currently has a capitalisation of some RM4bil even without the backing of a deposit base.

Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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