(From left) MBSB Bank chief strategy officer Datuk Azlan Shahrim, Malaysia Building Society Bhd (MBSB) group chief executive officer Rafe Haneef, and MBSB group chief financial officer Ramanathan Rajoo. (Photo by Suhaimi Yusuf/The Edge)

KUALA LUMPUR (July 27): Malaysia Building Society Bhd (MBSB) has received shareholders’ approval to buy Malaysian Industrial Development Finance Berhad (MIDF) from Permodalan Nasional Bhd (PNB) for RM1.01 billion that will be satisfied via the issuance of 1.05 billion MBSB shares at 96.52 sen per share.

Following the proposed acquisition — which is expected to be completed in August this year — MIDF will become a wholly owned subsidiary of MBSB, and PNB will emerge as a substantial shareholder of MBSB with an equity stake of 12.78%.

Meanwhile, the Employees Provident Fund’s (EPF) shareholdings in MBSB will be reduced from 65.87% to 57.45%.

In an extraordinary general meeting (EGM) held on Thursday (July 27), MBSB’s new group chief executive officer Rafe Haneef said that the merger will expand MBSB’s banking spectrum.

He said the merger would provide financial resilience to both entities to compete in the market through a bigger balance sheet, wider customer reach and enhanced product offerings and capabilities.

“Therefore, the enlarged group will be in a position to offer end-to-end banking services comprising consumer banking, stockbroking and asset management, commercial banking, small, medium and enterprises (SME) and development finance as well as corporate and investment banking,” he said.

He noted that MIDF’s strength in investment banking and asset management could support MBSB in areas of its wealth management solutions.

“Traditionally, MBSB has been very strong on home financing and personal financing, but we are lacking in wealth management.

“So if we want to be successful in our target segments within the consumer, we need to offer a comprehensive suite of products that soon would require a wealth management solution,” he explained.

Once the acquisition is complete, he expects that the integration between MBSB and MIDF will be realised in the next 12 to 24 months.

Additionally, both MBSM and MIDF will be able to serve customers through their combined digital capabilities as well as a network of 53 branches nationwide, comprising 47 branches from MBSB and six branches from MIDF, said Rafe.