MBSB projects 3-4% topline growth for 2021, seeks new revenue streams

PETALING JAYA: Malaysia Building Society Bhd (MBSB) is anticipating 3-4% growth in revenue for 2021 driven by fee income and trade financing expansion in the face of the challenging operating environment posed by the Covid-19 pandemic and the ensuing restrictions.

Group president and CEO Datuk Seri Ahmad Zaini Othman (pix) said the group will focus more on growing its income levels and maintaining its profitability trajectory.

He said the group is pushing for more revenue streams. In 2020, the outbreak of the pandemic hampered its efforts to create more revenue streams at the top level and also affected its income stream.

“Nevertheless, our push for certain fee-based income, trade finance, and others are still on the cards. Our profitability will be more or less sustained or even improve from 2020’s position,” Ahmad Zaini told the media after MBSB’s AGM today.

At the end of the day, he said, it wants to focus on its net income level.

In tandem with its topline growth expectations, the group targets 3% loan growth in 2021.

The CEO outlined the importance of income level and said MBSB has put in more efforts to build up its capabilities this year.

Under the current lockdown, the group’s current non-performing loans (NPL) levels saw a slight spike from the first movement control order (MCO 1.0) of last year but noted that the numbers are from the previous brackets of customer that was applying for rollovers, among others.

“The NPLs are manageable and it is not to a point that is frighteningly high but the gross NPL position has trended up slightly,” he said.

With this development, Ahmad Zaini stated, MBSB has adopted a more mindful approach on onboarding new businesses or new financing to its loan books.

“I think part of a big strategy in terms of ensuring quality assets are being observed, selectively also we will avoid the tourism industry, airlines and so on. So we are enhancing further in terms of how we look at the onboarding of customers, especially corporate customers.

“We are also increasing and looking at the right segmentation. From our experience over the last one year since 2020, we do know that certain segments like the retail segment are something that we need to be more cautious about, where things can be initiated by authorities and then we would basically suffer such losses,” Ahmad Zaini said.

Apart from that, it has found that the personal financial segment for government servants is the growth spot for the company to pursue going forward, due to job stability.

As for modification loss, the president expects it would be much lower this year compared to previous year, due to implementation of more targeted assistance to those in need.

As at the end of last year, MBSB has assisted more than 47,000 of its retail customers allowing them to continue payments at their prevailing affordability level.

While the moratorium has affected MBSB’s earnings, he said, the impact is still manageable as customers are responding positively to requests for consultations to restructure their financing accounts.

For the first quarter ended March 31, 2021, the group returned to profitability with a net profit of RM63.41 million against a net loss of RM73.25 million reported in the same quarter of the previous year attributed to lower funding costs while net allowance for impaired loans fell.

Meanwhile, its revenue for the quarter slipped 8.2% to RM680.98 million from RM741.41 million previously.