Monday, October 19, 2009

MBSB Chairman Statement

Chairman Statement
Extracted from Annual Report 2008

Dear Shareholders, On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Malaysia Building Society Berhad (MBSB) and its Group for the financial year ended 31 December, 2008.
Overall Business Environment

Malaysia, like most other countries is not spared from the adverse effects of the global economic slowdown following the sub-prime crisis. The operating environment for the finance industry is difficult and competitive especially in terms of retail and corporate loans.
Despite the above challenges, we were profitable in 2008. Our continued focus on retail loans and increased efforts in our loan recoveries were the main contributors to the profit performance.

MBSB Group's loan base continued to increase. A net loan growth of 12.3% was achieved in 2008. The increase was substantially due to the increase in mortgage loans especially in Islamic financing.

Review of the Group Financial Performance
MBSB recorded a Group pre-tax profit of RM54.0 million in 2008, which was an improvement of 24.6% over the previous year of RM43.4 million. Similarly, at company level, the pre-tax profit improved by 52.2% to RM63.9 million as compared to the previous year of RM41.9 million.

The improvement was mainly due to the growth in net interest and financing income and other income arising from increased loan base, which was supported by increased deposit taking activities. The improvement was partially offset by higher other operating expenses.
Due to our profit achievement over the last five (5) years, the unabsorbed tax losses have been utilised accordingly. This year, the utilisation has resulted in the reversal of deferred tax assets of RM17.0 million resulting in a lower deferred tax assets of RM16.0 million as compared to RM33.0 million in the previous year.

The reversal of deferred tax assets has resulted in a lower net profit for the Group and the Company of RM32.6 million and RM40.9 million respectively for 2008 as compared to the previous year of RM53.3 million and RM44.8 million respectively.

Lending Activities
As mentioned earlier, MBSB Group's total net loans, advances and financing grew by 12.3% to RM6.8 billion in 2008. This was due to the continuing growth in mortgage loans of 17.0% in 2008, in particular our Islamic financing, which contributed 69.0% of the overall growth. Apart from mortgage loans, MBSB has been focusing on personal loans, which grew by 43.0% in 2008. Overall, mortgage and personal loans accounted for 71.0% and 4.7% of the total net loans.
MBSB Group's net non-performing loans ("NPL") increased by RM140.5 million on the back of RM742.0 million loan growth in 2008. The NPL ratio for 2008 has remained at 23.0%, equivalent to the NPL ratio recorded in 2007. Our general provision was 1.0% in 2008. We will be enhancing our risk management capabilities in view of the current economic environment to improve the Group's asset quality.

Deposits from Customers
MBSB Group's deposits grew by 17.0% to RM6.3 billion in 2008 as compared to the previous year of RM5.4 billion. Government and statutory bodies account for 41.0% whilst business enterprises and individuals account for 37.0% and 22.0% of the total deposits respectively.
With the increase in deposits from customers, the bank borrowings have accordingly reduced by 48.0% to RM305.2 million in 2008 compared to RM591.0 million in 2007.

Dividends
The dividend policy for this year onward is a minimum payout ratio of 30%. On this basis and the current financial performance, the Board of Directors have recommended a first and final dividend of 3.0% less 25.0% income tax for the financial year ended 31 December 2008 to MBSB's shareholders for approval. The payout ratio for the estimated net dividend payment
Strategic Initiatives

Product Development
MBSB will continue to focus on product development and enhancement. As part of the growth strategy, MBSB has pre-launched the "PartnerHome-i" product which is based on the Musharakah Mutanaqisah Home Financing Concept. In addition, MBSB has also prelaunched the "Mudharabah Savings-i", a general investment savings account based on the profit sharing concept. This product is aimed to encourage the habit of saving amongst our depositors.
As part of MBSB's continuous development strategy, the Financial Process Exchange (FPX) system, an on-line collection facility will be implemented in the near future to facilitate and to ease the payment process for our customers.

Strategic Alliance
During the year, we have collaborated with a few strategic partners such as Takaful Malaysia, CommercedotCom, Kaizen HR and ShareInvestor in our efforts to improve the delivery system to benefit MBSB's customers, shareholders and stakeholders.
We have also entered into a collaboration with ShareInvestor, a programme endorsed by the Malaysian Investors' Relation Association, to enhance our channel of communication with our shareholders, investors and the investment community. In view of the current financial turmoil, MBSB feels that it is important to maintain an active level of dialogue and communication with its shareholders and investors.

Human Capital Development
For the year 2008, MBSB has been prudent and will continue to do so in its recruitment exercise in line with the current economic scenario.
MBSB believes that each and every employee is an asset to the organization. As such, it is important that its workforce be developed to meet the growing needs of the organization. Various in-house and external training programmes have been conducted for executives and non-executives to enhance their competencies by focusing on supervisory skills, leadership skills, soft skills and management skills. A total of 98 in-house and external training programmes were conducted to improve the employees' skill set.
We have also participated in The Talent Exchange Programme, coordinated by the Khazanah Nasional Berhad. The Exchange Programme was designed to enable an exchange of talents between the Government- Linked Companies.

Corporate Social Responsibility
During the year, MBSB has embarked on various initiatives to give back meaningfully to the community in which MBSB operates.
CSR has been integrated into its business strategy and this is reflected through the launching of MBSB Home Safety Campaign with the theme,"Our Home – The Safest Place". The rationale behind this initiative was:-

To build a conducive living environment;

To build community knowledge towards creating safer living environment,

To encourage a caring society; and

To educate the public on the necessary actions and measures to be taken on crime prevention,
fire prevention and first aid.

The campaign was launched in May 2008 and since then, talks and outreach programmes were held throughout Malaysia to educate and create awareness on the importance of home safety.
One of the achievements of the Campaign was the recognition by the Prime Minister's Department of MBSB's contribution in championing The MBSB Home Safety Campaign to the public. The award was presented during the launching of the National Crime Prevention Month in August 2008.

Besides the Home Safety initiative, MBSB also contributes towards the improvement in education, particularly, in the rural areas. During the year, MBSB continued to monitor the progress of its two adopted schools in Bukit Mertajam, i.e. Sekolah Kebangsaan Machang Bubok and Sekolah Kebangsaan Bukit Teh, under the PINTAR school adoption programme. In addition, another 17 schools were also adopted. Counselling sessions, motivation and other related activities were undertaken to equip the students to prepare for their exams.
Not forgetting our home, the employees' welfare has always been our prime concern. During the year, we have initiated a financial assistance programme for selected single parents. Monetary assistance was provided to these parents to alleviate the rising costs of living.

GLC Transformation Initiatives
As a Government-Linked Company (GLC), MBSB will continue to implement the best practices in order to achieve our aspirations and objectives and also to transform MBSB into a high performance organization. In the Transformation Implementation Plan, MBSB was on track in its deliverables and has shown the following tangible results under GLC initiatives.

The GLC Initiatives carried out during the year were:-

Blue Book (Intensifying Performance Management) Implemented the reward system to the individual staff scorecard.

Red Book (Procurement Guidelines and Best Practices)Implemented the first module of the E-Procurement System

MBSB have also implemented the Vendor Development Programme, comprising of the Bumiputera Vendor Development Programme and the Strategic Supplier Programme. Small and medium Bumiputera enterprises would be selected and developed during the programme, to be at par with the existing companies in terms of competitiveness.

Branch Network
For the year 2008, MBSB had opened six branches at various strategic locations in Kangar, Taiping, Sandakan, Kemaman, Sitiawan and Tawau. MBSB has a total of 30 branches throughout Malaysia.

In line with our expansion plan, two more branches have been identified to be opened in 2009 i.e. Kulim and Bintulu.

Future Direction
MBSB will continue to focus on the retail business, and we have identified Personal Financing and Home Mortgage to be the core retail programmes for the Company.
For 2009, our Management has structured certain strategic initiatives to penetrate the Personal Financing and Mortgage markets that should see significantly higher contributions of income from these two businesses in the future.

The other core business activity that MBSB will focus on for the coming year, will be the continued involvement in Conventional and Islamic Corporate businesses. Bridging loans for Projects that are viable will continue to be financed by MBSB.
The planned introduction of the Islamic Business Model to cater for the financing needs of the small and medium Bumiputera enterprises would be one of the business initiatives to be launched during the year.

To ensure that all the Projects under both Conventional and the Islamic business model programmes are critically evaluated and their viability enhanced, MBSB will set up a Project Management and Monitoring Department, whose task would be to manage, evaluate and monitor all the Projects financed or participated by MBSB.

Appreciation
On behalf of the Board of Directors, we wish to express our heartfelt appreciation to shareholders, depositors, customers and stakeholders for their continuous support to the Company. To all our partners, we thank you for the assistance and cooperation during the year.
We also wish to welcome Encik Ahmad Zaini bin Othman who took over the helm of the Company on 26 February 2009 as the new Chief Executive Officer. His vast experience in the Commercial and Merchant Banking and Corporate sector over the past 24 years, particularly in Islamic Finance will, I believe contribute positively to the overall growth of MBSB. To my fellow Directors, I wish to record my sincere appreciation for their invaluable wisdom, advice and guidance.

A special thanks to Yang Berbahagia Datuk Haj i A. Rahim Bin Abdullah, who retired from the Board on 3 June 2008.
Last but not least, on behalf of the Board, I would like to record our appreciation to our previous Chief Executive Officer, Encik Ahmad Farid Omar, for his services and contribution to MBSB for the past 5 years from August 2003 up to December 2008.

Tan Sri Abdul Halim Bin Ali
Chairman
27 March 2009

MBSB kini di laboh ampang

Bahagian Pembiayaan Peribadi MBSB Kini Beroperasi Di Leboh Ampang
Jul 31, 2009

Bahagian Pembiayaan Peribadi MBSB kini mula beroperasi di lokasi baru di Bangunan MBSB, Pusat Bandar 13/15, Leboh Ampang bermula 27hb Julai 2009.

Pemindahan lokasi ini bertujuan untuk mempertingkatkan lagi keupayaan perkhidmatan di samping memberi kemudahan dan keselesaan yang lebih baik kepada pelanggan serta orang ramai. Segala urusan Pembiayaan Peribadi seperti perkhidmatan pelanggan, pemprosesan pinjaman, pentadbiran serta bahagian pemasaran akan berpusat di MBSB Leboh Ampang.

Operasi pemprosesan pinjaman kini dipergiat sehingga pukul 12.00 tengah malam. Usaha ini merupakan salah satu langkah bagi mempertingkatkan lagi operasi pemprosesan pinjaman untuk beroperasi selama 24 jam sehari kelak bagi memastikan segala urusan permohonan pelanggan dapat diproses dengan kadar segera. Langkah agresif ini sejajar dengan matlamat MBSB untuk memberi perkhidmatan yang cekap dan pantas kepada pelanggan.

Untuk keterangan lanjut, orang ramai boleh menghubungi En. Azman Aziz atau Cik Fara Bahagian Pembiayaan Peribadi MBSB Leboh Ampang di talian 03–2072 4600/ 2072 4043 atau menghubungi talian bebas tol PFi MBSB Leboh Ampang 1–800–22–6000. Pelanggan-pelanggan juga boleh menghantar faks di talian 03-2072 4037.

MBSB kini giat mempromosikan pinjaman peribadi-i kepada kakitangan awam dengan memperkenalkan pakej istimewa serta menawarkan kadar faedah yang paling kompetitif di pasaran. Selain produk pembiayaan peribadi-i, MBSB juga menawarkan pakej pinjaman perumahan, akaun simpanan, dan peniagaan korporat.

mbsb Announcements

Economic Profit and Loss Statement for 2nd Quarter 2009
Aug 11, 2009

General Announcement
Reference No MB-090811-55405

Company Name:
MALAYSIA BUILDING SOCIETY BERHAD

Stock Name:
MBSB

Date Announced:
11/08/2009

Type:
Announcement

Subject:
Economic Profit and Loss Statement for 2nd Quarter 2009

Contents:
Malaysia Building Society Berhad (“MBSB” or “the Company”) would like to announce its Economic Profit and Loss Statement for 2nd Quarter 2009.

Announcement Details :
ECONOMIC PROFIT AND LOSS STATEMENT FOR THE 2ND QUARTER 2009Economic profit or loss is an amount earned for a period by a business after deducting the operating expenses and a charge of opportunity cost of capital employed.

The economic profit and loss statement set out in Table 1 is disclosed on a voluntary basis.The assumptions used in computing the economic profit/loss are set out below:

(i) The cost of equity is calculated based on the following formula:Cost of equity = (Beta x Market Risk Premium) + Risk Free Rate

(ii) The Beta used in the calculation is the 5 years
adjusted Bloomberg Rate:
Quarterly Period Beta2nd Quarter 2009=1.4411st Quarter 2009=1.3834th Quarter 2008=1.373

(iii)The risk free rate is the rate of return of a 10-year Malaysian Government Securities at the closing of the reporting period:Risk Free RateAt 30 June 2009=4.340%At 31 March 2009=3.850%At 31 December 2008=3.170%

(iv) The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.

TABLE 1
30 June 2009

(Unaudited) RM’000

Group profit after taxation
14,233

Adjustments
- Deferred tax assets
8,000

Adjusted Group profit after taxation
22,233

Less: Cost of capital employed
(29,440)

Economic loss
(7,207)