KUALA LUMPUR: Newly-formed MBSB Bank Bhd is looking at disbursing up to RM6 billion of affordable home financing this year.
According to its president and chief executive officer (CEO) Datuk Seri Ahmad Zaini Othman, the amount will carry the bank over for the next three years.
“A huge chunk of our portfolio even before we became a bank has always been in development and affordable housing, and that would not change now that we have become a full-fledged bank,” he said.
“As of now, we have between RM5 to RM6 billion worth of affordable home financing in the pipeline this year and that would keep us comfortable for the next three years.”
To date, MBSB Bank has financed some RM4.5 billion towards government-backed affordable housing projects.
They comprised Perumahan Penjawat Awam 1Malaysia (PP1M) for RM2 billion, 1Malaysia People's Housing (PR1MA) for RM1.6 billion and Rumah Wilayah Persekutuan (RUMAWIP) for RM900 million.
The bank’s acquisition of Asian Finance Bank Bhd last month had made it a fully-fledged Islamic bank with an enlarged asset base of RM47.81 billion.
“With this new status, we are looking at launching more Shariah compliant products in the future. We are presently strong in property development and we will be looking on added feature to increase our end financing penetration,” Ahmad Zaini said.
“We will also look at strengthening our trade financing portfolio, add on more products to our Islamic retail segment as well as grow our transactional banking.”
MBSB Bank has also allocated RM250 million to upgrade its core banking system to roll out its financial technology (fintech) solutions in the third quarter of this year.
Ahmad Zaini had earlier alongside Cagamas SRP Bhd CEO Datuk Chung Chee Leong signed a double collaboration agreement for Cagamas' Mortgage Guarantee Programme (MGP) and the participation of MBSB in Skim Rumah Pertamaku.
MBSB Bank will be able to tap into Cagamas’ guarantee for all three government-backed affordable housing projects it is involved with, which currently has some RM9.61 billion in collective gross development value.
“Cagamas MGP can also help to improve the bank’s capital adequacy ratio (CAR), serves as an alternative venue to alleviate the impact of MRFS 9 as well as free up more capital for financing,” said Ahmad Zaini.
“Under the SRP, MBSB Bank will be able to provide up to 100 per cent financing to those below 40 years of age and obtain guarantee from Cagamas for the first 10 per cent of the financing originated.”
The SRP was first launched in 2011 to assist those below 40 years old with a gross income not exceeding RM5,000 and joint borrowers with gross individual income not exceeding RM10,000 per month, to obtain up to 100 per cent financing from participating banks.
To date, 23 financial institutions inclusive of MBSB Bank have participated and have approved of 7,920 financing and loans amounting to RM1.6 billion.