Sources say the EPF is considering privatising Malaysia Building Society Bhd (MBSB) as it intends to do much more with the residual properties of the non-bank lender.
The EPF is looking to unlock the values in the properties that MBSB has. The EPF owns 65.5% of MBSB, while institutional fund Permodalan Nasional Bhd is the second largest shareholder with 7.26%.
Based on MBSB's 2010 annual report, the company has 9.21 hectares (ha) in central Johor Baru and another 16.9 ha in Malacca. These pieces of land carry a book value of some RM169.2mil but analysts say they are worth much more now. Besides that, MBSB also has a few pieces of land in Sungai Buloh with a combined area of 5.73 ha and a book value of RM31.9mil.
These properties were inherited by MBSB as many of its delinquent loans of the past were backed by properties in good locations.
The Johor land is particularly valuable given its proximity to Johor's coastline where big plans are being unveiled by the state for a massive integrated waterfront development.
Any plans to develop MBSB's residual properties would tie in nicely with the EPF's plans for its unit called Kwasa Land Sdn Bhd. This 100% subsidiary of EPF is the master developer of the Rubber Research Institute Malaysia land in Sungai Buloh. MBSB's list of properties came about after the lender had ventured in a big way into financing real estate development in the 1990s.
MBSB had adopted the business model to buy and develop land by itself, with the intention to finance the purchasers of the properties. However it did not have the necessary expertise and management skills to execute its plans.
Its non-performing loans (NPLs) stood at 59% in 2002, which stood at about RM2bil, and has gradually been brought down to the current level of 8%. MBSB had also provided guidance that it would strive to reduce their net NPL ratio to between 5% and 6% in 2012, which is substantially below its current level.
It posted RM325.4mil as net profit for its full year ended Dec 31, 2011, more than doubling the RM146mil it achieved in the previous year, driven by a loan growth of 22.8%.
Personal loans made up 40% of MBSB's total loans in second quarter 2011, compared with 28% in fourth quarter 2010.
said MBSB would be able to entice the more affluent civil servants to take up loans by offering more innovative products to them moving forward.
The EPF is looking to unlock the values in the properties that MBSB has. The EPF owns 65.5% of MBSB, while institutional fund Permodalan Nasional Bhd is the second largest shareholder with 7.26%.
Based on MBSB's 2010 annual report, the company has 9.21 hectares (ha) in central Johor Baru and another 16.9 ha in Malacca. These pieces of land carry a book value of some RM169.2mil but analysts say they are worth much more now. Besides that, MBSB also has a few pieces of land in Sungai Buloh with a combined area of 5.73 ha and a book value of RM31.9mil.
These properties were inherited by MBSB as many of its delinquent loans of the past were backed by properties in good locations.
The Johor land is particularly valuable given its proximity to Johor's coastline where big plans are being unveiled by the state for a massive integrated waterfront development.
Any plans to develop MBSB's residual properties would tie in nicely with the EPF's plans for its unit called Kwasa Land Sdn Bhd. This 100% subsidiary of EPF is the master developer of the Rubber Research Institute Malaysia land in Sungai Buloh. MBSB's list of properties came about after the lender had ventured in a big way into financing real estate development in the 1990s.
MBSB had adopted the business model to buy and develop land by itself, with the intention to finance the purchasers of the properties. However it did not have the necessary expertise and management skills to execute its plans.
Its non-performing loans (NPLs) stood at 59% in 2002, which stood at about RM2bil, and has gradually been brought down to the current level of 8%. MBSB had also provided guidance that it would strive to reduce their net NPL ratio to between 5% and 6% in 2012, which is substantially below its current level.
It posted RM325.4mil as net profit for its full year ended Dec 31, 2011, more than doubling the RM146mil it achieved in the previous year, driven by a loan growth of 22.8%.
Personal loans made up 40% of MBSB's total loans in second quarter 2011, compared with 28% in fourth quarter 2010.
said MBSB would be able to entice the more affluent civil servants to take up loans by offering more innovative products to them moving forward.
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