Hi guys,
Today I paid a visit to MBSB BANK in Taman Molek, Johor and met the Branch Manager Encik Hanafi
And these are some highlights why Calvin think MBSB BANK HAS AN EDGE AND POWERFUL POTENTIAL FOR GROWTH
1) MBSB BANK Has Margin Of Safety
Price at 83 sen (the very bottom now) with NTA of Rm1.23 MBSB BANK is selling at a discount of 33% It has margin of safety according to Great Benjamin Graham
Its Assets are mostly lands, shop house, office and 2 hotels located in Melaka, Port Dickson, Negeri Sembilan & Kuala Lumpur
These are located in the direction of Growth
2) UPGRADED TO FULL ISLAMIC BANK
Last time MBSB Society borrowed monies from Bank Negara & Other Banks at high interest of around 3% and then gave out loans for houses at even higher interest rates of 6% to 7%. That put it in an unfavourable position against Tier One Banks like Maybank, Public Bank, Hong Leong, Bank, RHB Bank & CIMB Bank which have license to collect monies through Savings Acc at lower interest cost
NOW THAT IT HAS BEEN UPGRADED TO A FULL DEPOSIT TAKING BANK ITS COST OF FUNDS HAVE BEEN REDUCED HANDSOMELY
THIS IS A BIG PLUS AS COST OF CHEAP FUNDS NOW ENABLE MBSB TO COMPETE HEAD ON WITH TIER ONE AND OTHER BANKS IN MALAYSIA LIKE MAYBANK, PUBLIC BANK, RHB BANK, CIMB BANK AS WELL AS OTHER ISLAMIC BANKS LIKE BIMB BANK, BSN & BANK MAUMALAT
ALL BECAUSE IT HAS TAKEN OVER THE OPERATION OF ASIAN FINANCE BANK (AFB)
TAKING OVER BANKS?
THIS WAS HOW MALAYSIA BANKS STARTED
RHB BANK, HONG LEONG BANK AND MAYBANK ALL STARTED SMALL BUT LATER MERGED WITH OTHER BANKS TO FORM TIER ONE BANKS LATER
SO WITH THE MERGER WITH AFB MBSB BANK IS NOW THE 2ND LARGEST ISLAMIC BANK BY ASSETS AFTER BIMB BANK
3) NOW WITH THIS SINGLE UPGRADE MBSB IS ABLE TO OPEN BRANCHES AND COLLECT DEPOSITS FROM THE PUBLIC
IN THOSE DAYS IT HAS TO BORROW FUNDS FROM OTHER TIER ONE BANKS THROUGH BANK NEGARA AT THE INTEREST OF 3% AND GIVE OUT HOUSING LOANS AT 6% TO 7% HIGH INTEREST TO EARN THE DIFFERENCE
NOW IT ACCEPTS FD DEPOSIT AT 3.8% AND FOR SAVINGS A/C THE RATE IS A MERE 1.5% PAYOUT
THIS IS A BONANZA WINDFALL ABOUT INTEREST COST SPREAD
IT STILL CHARGE THOSE HOUSES LOANED AT 6% TO 7% INTEREST BUT NO LONGER PAY TIER ONE BANKS AT 3%
ITS FUNDS WILL BE VERY MUICH CHEAPER
THE DIFFERENCE OF SUCH GOOD INTEREST RATE SPREAD WILL ELEVATE THE EARNINGS BY A FAR BIGGER MARGIN
4) MBSB BANK GIVES OUT CASH PRIZES TO ATTRACT NEW DEPOSITORS
THIS WAS DONE BY BIMB BANK, BSN & BANK MAUMALAT
THEY GIVE OUT LUCKY DRAW CASH PRIZES OR CARS TO ATTRACT FUNDS
MBSB BANK CAMPAIGN IS NOW ON. A TOTAL OF RM2 MILLIONS CASH PRIZES DREW IN MANY NEW DEPOSITS
WITH THIS NEW CHEAP FUND IT HAS NOW SETTLED ALL ITS BORROWINGS FROM TIER ONE BANKS AT HIGH INTEREST
THIS INTEREST RATE DIFFERENTIAL IS OVERLOOKED BY THE INVESTING CROWD
MANY WERE TALKING ABOUT OIL CRACK SPREAD PROFITS DURING HENGYUAN BULL RUN
SO SOME DAY PEOPLE WILL ALSO DISCOVER THE INTEREST RATE SPREAD OF MBSB BANK WHICH IS SUPERIOR
5) WHY IS IT SUPERIOR COMPARED TO OTHER BANKS?
ANSWER:
BECAUSE MBSB BANK GAVE OUT LOANS TO B40 AT 6% TO 7% INTEREST. THESE LOANS HAVE ASSETS AS COLATERAL LIKE LANDED HOUSES AND APARTMENTS (NOT COMMERCIAL SHOPS) AS MBSB BANK GOES FOR BREAD AND BUTTER LOANS AMONG CONSUMERS
THESE B40 DON'T CARE ABOUT INTEREST RATE AS THEY ARE STILL YOUNG
SO THESE HOUSES WITH LOCKED IN INTEREST AT 6% TO 7% WITH UP TO 30 YEAR TENURE ARE GOLDEN GOOSE FOR MBSB
WHILE THE COST OF FUND SPREAD HAS BEEN REDUCED THE LOAN PAYMENT LOCKED IN FOR CUSTOMERS CONTINUE.
SEE IF YOU CAN CHARGE 7% BUT COST OF CAPITAL IS 1.5% AND MULTIPLY THAT BY 30 YEARS
THE PROFITS WILL EXPLODE UPWARD FOR MBSB BANK
6) MBSB BANK OPERATES UNDER THE SAFETY OF DOMESTIC BORROWERS
MAYBANK IS SUFFERING FROM THE INSOLVENCY OF HYFLUX IN SINGAPORE. EVEN PUBLIC BANK IS IMPACTED BY POOR BUSINESSES BUT MBSB BANK IS QUITE INSULATED DUE TO ITS WELL SPREAD OUT EXPOSURE TO CONSUMERS AND MOSTLY LOWER END AFFORDABLE HOUSES
AFFORDABLE HOUSES?
YES! MBSB HAS INVESTMENT IN AFFORDABLE HOUSES FOR THE MASSES
7) A 6% DIVIDEND MAKES MBSB BANK LIKE A BOND FUND
YES 5 SEN DIVIDEND AT 83 SEN NOW TRANSLATES TO A VERY NICE 6% DIVIDEND
WHO KNOWS DIVIDEND MIGHT EVEN INCREASE FURTHER IN COMING GOOD YEARS FOR MBSB BANK
See MBSB Dividend History
| 11-Jun-2019 | 24-Jun-2019 | DIVIDEND | Final Dividend (with Dividend Re-Investment Plan) | RM 0.05 |
 |
| 25-Jun-2018 | 05-Jul-2018 | DIVIDEND | Final Dividend (with Dividend Re-Investment Plan) | RM 0.05 |
|
| 12-May-2017 | 24-May-2017 | DIVIDEND | Final Dividend | RM 0.03 |
|
| 09-Jun-2016 | 21-Jun-2016 | RIGHTS_ISSUE | Rights Issue | 1 : 1 |
|
| 05-May-2016 | 17-May-2016 | DIVIDEND | Final Dividend | RM 0.0300 |
|
| 15-Apr-2015 | 27-Apr-2015 | DIVIDEND | Final Dividend | RM 0.1 |
|
| 15-Apr-2015 | 27-Apr-2015 | DIVIDEND | Special Dividend | RM 0.02 |
|
| 22-Apr-2014 | 06-May-2014 | DIVIDEND | Final Dividend | RM 0.05 |
|
| 10-Dec-2013 | 23-Dec-2013 | RIGHTS_ISSUE | Rights Issue | 1 : 2 |
|
| 22-Oct-2013 | 01-Nov-2013 | DIVIDEND | Interim Dividend | 5% |
|
| 17-Apr-2013 | 14-May-2013 | DIVIDEND | Final Dividend | 9% |
|
| 17-Apr-2013 | 14-May-2013 | DIVIDEND | Special Dividend | 18% |
|
| 30-Aug-2012 | 19-Sep-2012 | DIVIDEND | Interim Dividend | 6% |
|
| 13-Mar-2012 | 12-Apr-2012 | DIVIDEND | Final Dividend | 7% |
|
| 02-Aug-2011 | 15-Aug-2011 | DIVIDEND | Interim Dividend | 5% |
8) OBSERVE CLOSER: BOTH EPF & INSIDERS ARE SO SANGUINE ABOUT MBSB BANK FUTURE THAT THEY ARE REINVESTING ALL THEIR DIVIDENDS
See
[MBSB] Change In Substantial Shareholder's Shareholding - EMPLOYEES PROVIDENT FUND BOARD on 01-Aug-2019
| Stock | [MBSB]: MALAYSIA BUILDING SOCIETY BHD |
| Announcement Date | 01-Aug-2019 |
Substantial Shareholder's Particular:
| Name | EMPLOYEES PROVIDENT FUND BOARD |
Details of Changes:
| Currency | - |
| Date of Change | Type | Number of Shares | |
|---|---|---|---|
| 24-Jul-2019 | Acquired | 254,654,687 | |
| Registered Name | Citigroup Nominee(Tempatan) Sdn Bhd Employees Provident Fund Board | ||
| Nature of Interest | Direct Interest | ||
| Nature of Interest | Direct Interest |
| Shares | Ordinary Share |
| Reason | Shares Derived from Dividend Reinvestment Plan |
Total no of securities after change
| Direct (units) | 4,329,129,682 |
| Direct (%) | 64.48 |
| Indirect (units) | 0 |
| Indirect (%) | 0.00 |
| Total (units) | 4,329,129,682 |
| Total (%) | 64.48 |
| Date of Notice | 25-Jul-2019 |
NOTICE ABOVE
EPF OWNS 64% OF MBSB BANK & IT REINVEST ALL DIVIDENDS INTO MORE SHARES INSTEAD OF TAKING CASH DIVIDEND
BELOW IS DIRECTOR
[MBSB] Change In Director's Shareholding - TAN SRI ABDUL HALIM BIN ALI on 24-Jul-2019
Director's Particular:
Details of Changes:
Total no of securities after change
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DIRECTORS ALSO DEEM IT FIT TO REINVEST DIVIDEND INTO SHARES OF MBSB BANK
WHY IS EPF AND DIRECTORS SO BULLISH?
9) A BANKING LICENSE IN MALAYSIA IS VERY PRECIOUS. IS LIKE GIVING YOU THE KEYS TO A POT OF GOLD
OR GIVING YOU A PASSPORT TO SECURE MONIES
MALAYSIA IS VERY STRICT WITH UNLICENSED BANKS. OR INVESTMENT BANKS LICENSE
THAT WAS HOW DIFFICULT FOR MUI GROUP TO SELL OFF ITS STAKE IN PH HOLDINGS TO DR YU
DR YU WANTED PH HOLDING FOR ITS OWNERSHIP OF PM SECURITIES
BUT DR YU FAILED TO GET AN INVESTMENT BANK LICENSE SO THE DEAL WAS ABORTED
A SECURITY FIRM IS WORTH ANYTHING FROM RM100 MILLIONS TO RM200 MILLIONS
A FULL FLEDGED ISLAMIC BANK LIKE MBSB?
IT'S EVEN FAR HARDER TO GET AND MOST COSTLY
BUT IT WAS GIVEN TO EPF
OF COURSE EPF HAS THE FIRST RIGHTS AS IT REPRESENTS THE WEALTH FUND OF MALAYSIA JUST LIKE TEMASEK CONTROLS SINGAPORE GOVT FUND AND NORGES FUND OF NORWAY
SO NOW YOU KNOW THE EDGE OVER ALL OTHERS AS IT IS A PRIVILEDGE AND THE FUTURE POTENTIAL OF THIS STOCK
10) AT ALL TIME LOW NOW AT 83 SEN WILL MBSB BANK MORPE INTO ANOTHER MAYBANK, HONG LEONG BANK, BIMB BANK OR PUBLIC BANK
PUBLIC BANK?
HA! PUBLIC BANK FELL TO A LOW OF 80 SEN DURING THE ASIAN FINANCIAL CRISIS
IF ONLY YOU HAVE BOUGHT SOME THEN WHEN TIMES WERE BLEAK
NOW WILL MBSB BANK THROWS UP ANOTHER SURPRISE LIKE PUBLIC BANK DURING THE ASIAN FINANCIAL CRISIS?
WHOA IT SOUNDS FAMILIAR
ASIAN FINANCE BANK ( ASIAN FINANCIAL CRISIS)
PUBLIC BANK WAS 80 SEN IN YEAR 1998 & TODAY ASIAN FINANCE BANK OR MBSB BANK IS 83 SEN
WILL MBSB BANK (AFB) FOLLOWS IN THE FOOTSTEP OF PUBLIC BANK SOME DAY
OF COURSE CALVIN DOES NOT DREAM SO BIG AS PUBLIC BANK IS NOW OVER RM20.00
A DOUBLING IN PRICE WILL DO
SO I HAVE A TARGET PRICE FOR MBSB BANK AT RM1.60 (ABOUT 100% UPSIDE)
POSSIBLE?
WHY NOT?
LAST ROUND CALVIN ALSO PICKED RCECAP AT 27.5 SEN AT ITS LOWS
LATER RCECAP GAVE A 7.5 SEN CASH PAYOUT AND MERGED 4 INTO ONE
SO 20x4 = 80 SEN
THEN RCECAP POWERED TO OVER RM1.60 FOR A CHUN CHUN 100% GAIN
THE EDGE OF RCECAP WAS IN ITS SECURED SALARY DEDUCTION OF GOVT SERVANTS LOANS
THE EDGE OF MBSB BANK WILL BE ITS HUGE DIFFERENTIAL OF LOW INTEREST RATE SPREAD COMPARED TO ITS HIGH MARGIN LOANS SECURED WITH COLLATERAL IN LANDED HOUSES
WHEN WILL MBSB BANK REACH RM1.60?
THAT WE CANNOT TELL BUT A NICE 6% DIVIDEND IS ALMOST A GIVEN
WHY 6% A GIVEN?
BECAUSE EPF NEEDS 6% TO GIVE TO ITS DEPOSITORS YEARLY
BEST REGARDS
Calvin Tan Research
Note further:
10 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD . PLEDGED SECURITIES ACCOUNT FOR FONG SILING
38,000,000
Fong Siling or Mr ColdEye is in Top 10 holder of MBSB BANK with 38 million shares
As Pledged securites he probably borrow monies on margin to buy these shares
Please buy with spare cash and invest longer term
As I heard that that Refurbishment for ASIAN FINANCE BANK TO MBSB BANK STILL ON GOING Lots of Monies for Capex will be needed
So don't look at short term. THINK LONGER TERM AND INVEST LONGER TERM AS PUBLIC BANK, HONG LEONG BANK, MAYBANK, RHB BANK, AFFIN BANK, CIMB BANK, BIMB BANK TOOK TIME TO GROW TO ITS SIZE TODAY
Please do your own due diligence before buying or selling
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