KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) is targeting an 8% overall loan growth for 2015, despite weak consumer sentiment caused by the weakening ringgit, which hit a nine-year low yesterday.
“Most of our loans and exposures are in ringgit, so we don’t have much currency exposure. This would mean that the weakening of the ringgit against the US dollar and also other currencies will not affect our line of business. Most of our businesses are all localised,” MBSB president and chief executive officer Datuk Ahmad Zaini Othman (pic) told reporters after a signing ceremony for a RM250 million tawarruq financing facility between MBSB and YBK Usahasama Sdn Bhd (YBKU) yesterday.
He added that MBSB currently has a corporate-to-retail ratio of 12% to 88%, but hopes to see the corporate segment grow to 35% against the retail of 65% within the next three years.
“We have moved away from retail more towards the corporate segment. This is in line with our aspirations and business plans.
“We are targeting to do more corporate businesses. It is going to be a very competitive year, but hopefully we will be able to achieve what we have targeted,” said Ahmad Zaini.
YBKU intends to use the refinancing facility to perform maintenance services works at the Universiti Teknologi MARA campus in Jasin, Melaka, for a concession period of 23 years.
“We are indeed proud to be participating in this deal. The education sector has been identified as the 10th major area under the National Key Economic Area stipulated in the Economic Transformation Programme,” said Ahmad Zaini.
The Jasin UiTM campus deal is the second that MBSB had inked for facility refinancing, the first being UiTM Seremban 3, Negeri Sembilan for an amount of RM300 million.
Ahmad Zaini added that MBSB is also a major financier of the university, as the group is also funding the development of three other campuses located in Puncak Alam in Selangor, Raub in Pahang, and Rembau in Negeri Sembilan, which are expected to be completed by the end of this year.
He added that MBSB will look for similar refinancing projects in the future.
“When we look at the government’s blueprints, there will be more such facilities in the future. What we are looking at is to also refinance some of the existing ones that we have entered at the construction level earlier. So similar to YBKU’s case, when the project is finished, there is cash flow coming from the government.
“We have got a fairly strong relationship with the government, so we definitely hope we can do more in the future,” said Ahmad Zaini.
MBSB (fundamental: 1.2; valuation: 3) shares closed at 1.08 or two sen lower to RM1.84 yesterday, with a market capitalisation of RM4.99 billion. The counter saw 1.19 million shares changing hands.
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This article first appeared in The Edge Financial Daily, on June 9, 2015.