KUALA LUMPUR (April 14): Malaysia Building Society Bhd (MBSB) has received notification from Bank Negara Malaysia that the Ministry of Finance has granted approval for its acquisition of Malaysian Industrial Development Finance Bhd (MIDF).

In a filing with the exchange on Friday (April 14), MBSB said it has received notification from BNM that the ministry granted approval for the proposed transaction.

It added the transaction will result in a well-capitalised financial services group which is financially resilient to compete in the market with a stronger balance sheet.  

“It will create a universal banking group with end-to-end banking services comprising consumer banking, commercial and SME banking, development finance, corporate banking, investment banking and asset management, servicing a wider customer base that extends beyond MBSB Bank and MIDF’s pool of existing customers,” said MBSB.

MBSB's group chief executive Datuk Nor Azam M Taib said: “With the combined strength and expertise of both MBSB Bank and MIDF, we will be able to expand into new and larger customer segments through tailored financing, structuring and advisory solutions to support the business needs and growth of consumer and corporate clients.”

The group said it will announce further details upon the execution of the share purchase agreement in respect of the proposed transaction.

MBSB is 65.87% owned by the Employees Provident Fund (EPF) while MIDF, a development finance institution, is wholly owned by Permodalan Nasional Bhd (PNB).

MIDF is a diversified financial services provider with three core businesses, namely investment banking, asset management and development finance.

There are no provided details of its proposed merger with MIDF. However it is widely known that it will be effected entirely via a share swap, The Edge had reported on March 13, 2023.

The EPF is expected to emerge as the single-largest shareholder in the merged entity, with PNB holding less than 20%, The Edge had previously reported, citing a source familiar with the plan.

MBSB shares gained 2.54% or 1.5 sen to 60.5 sen at Friday’s close, valuing the group at RM4.3 billion.