EPF has no intention to divest its stake in MBSB for now

PETALING JAYA: The Employees Provident Fund (EPF) has not made any decisions to divest its stake in Malaysia Building Society Bhd (MBSB).

“The EPF is comfortable with the present performance of MBSB and looks forward to continuing improvements in their financial results,” an EPF spokesman told StarBizWeek yesterday to a question whether it was considering to divest its 65.5% stake in MBSB.

After EPF, the second largest shareholder of MBSB is Permodalan Nasional Bhd, with a 11.9% stake.

MBSB is an exempt finance company, a status granted by the Finance Ministry on March 1, 1972, which allows it to carry on a finance business without a licence.

EPF's stake in MBSB has been in the news lately after it was revealed at the Economic Transformation Programme update in July that 33 government-linked companies were part of a divestment plan, that included the paring down of stakes in five companies, the listing of seven and outright sales of the remaining 21.

MBSB, Malaysia Airlines and Malaysia Airports Holdings Bhd are among those identified by analysts and market observers as candidates for government-linked investment companies to reduce their shareholdings.

An analyst with a bank-backed research house said if EPF pared down its stake, MBSB would gain from the improve liquidity in its shares.

The analyst added that if EPF wanted to divest some of its shares in MBSB, then it should be done at “maximum value to the EPF”.

However, another industry analyst said EPF should hold on to its stake in MBSB as the latter has “just started to turn around” and needed “a shareholding backing it up to elevate it to a stronger footing.”

“There are still things that needed further improvement, like its legacy loans, although it has been positively progressing. On the other hand, MBSB could do with a strategic investor such as consumer credit institution to catapult it to a the next level.

“MBSB can issue new shares to the strategic investor so that it will have bigger capital for better growth,” he said.

MBSB, helmed by Datuk Ahmad Zaini Othman since 2009, has undertaken a major reform from being a traditional mortgage provider to become a dynamic institution offering more products for the retail and corporate sectors.

In its recently announced second quarter results ended June 30, MBSB posted a 58% increase in net profit to RM78.2mil from a year ago due to higher income from Islamic banking operations and conventional business net interest income.

Revenue for the quarter under review jumped to RM318.6mil from RM176.1mil last year.

For its six-month performance, MBSB net profit reached RM146.5mil from RM92.7 while revenue climbed to RM630.2mil from RM345.2mil a year ago.