MBSB said to be courting new suitors as asset management sale to Salaam hits a snag

This article first appeared in The Edge Malaysia Weekly on December 8, 2025 – December 14, 2025

MBSB Bhd’s (KL:MBSB) planned divestment of its asset management business to the Salaam group, Australia’s largest shariah-compliant wealth services provider, has hit a snag, sources say.

“That deal isn’t likely to happen because they [Salaam] had some hurdle on the regulatory front in Australia,” a source tells The Edge.

MBSB is believed to be in talks with “one or two” other investors that are keen on MIDF Amanah Asset Management Bhd. “One of them, an asset management company, is doing due diligence,” the source adds.

MBSB declined to comment when contacted, while Salaam could not immediately be reached.

The Edge reported in July that MBSB was planning to sell MIDF Amanah to the Salaam group. The divestment, subject to regulatory approvals, was expected to take “a few months” to be completed, sources said. The deal would have marked the Salaam group’s entry into Malaysia.

MBSB, the country’s second-largest standalone Islamic lender after Bank Islam Malaysia Bhd (KL:BIMB), issued a request for proposal to potential suitors late last year. It was open to all options, including getting a strategic partner to come in and beef up MIDF Amanah. But it eventually decided on an outright sale.

Industry sources say a small local lender had put in a bid for MIDF Amanah earlier this year but later withdrew it, deterred by MBSB’s “high asking price”.

That MBSB wants to divest MIDF Amanah is not a surprise, given that it is a non-core, sub-scale and loss-making business. It inherited the business following its RM1.01 billion acquisition of Malaysian Industrial Development Finance Bhd from Permodalan Nasional Bhd in October 2023.

MIDF Amanah is a relatively small player, with assets under management (AUM) of under RM1 billion. The country’s top player, Public Mutual Bhd, is understood to have AUM of over RM100 billion.

“A sale of the business won’t really have much [earnings] impact on MBSB, but it will reduce the bank’s cost quite a bit,” the earlier source says.

As it is, MBSB already has a strategic partnership with iFast Capital Sdn Bhd to provide unit trust offerings in a bid to broaden the lender’s wealth management proposition.

“MBSB’s wealth management partnership with iFast is showing strong traction, with wealth and gold sales tracking well,” RHB Research said in a Nov 28 report following the group’s third-quarter financial results. “MBSB shared that it has found a buyer for its non-core asset management arm, with the sale likely to be announced by end-1Q2026. At this juncture, the group prefers to focus on the distribution, rather than manufacturing, of such products.”

Over the last five years, MIDF Amanah has been in and out of losses. A CTOS search shows that the firm slipped into the red in the financial year ended Dec 31, 2024 (FY2024), having recorded a loss after tax of RM9.32 million compared with a profit after tax (PAT) of RM1.12 million in FY2023. Revenue fell by a sharp 82.8% to RM1.78 million from RM10.34 million.

In FY2022 and FY2021, it posted a loss after tax of RM4.92 million and RM1.2 million respectively. It made a PAT of RM2.5 million in FY2020.

Just last month, rival lender Affin Bank Bhd (KL:AFFIN) announced plans to acquire privately managed Pheim Asset Management Sdn Bhd, a profitable firm with AUM of RM876 million. On Nov 20, Affin entered into a conditional share purchase agreement to buy 100% of Pheim for RM50 million cash. The price translates into a price-to-AUM of 5.7%, a price-to-book value of two times and a price-earnings ratio of about 30 times.

Analysts say the deal is pricey compared with the valuation in the last major asset management transaction in the country — in July 2022, private equity group CVC Capital Partners acquired Affin Bank’s 63% stake in Affin Hwang Asset Management Bhd for RM1.42 billion. That deal was valued at a price-to-AUM of 3.08%, which was above the average of 2.64% for past merger and acquisition transactions involving asset management companies since 2014.

However, given Pheim’s “low overall cost”, the pricier valuation is not particularly concerning, one research house said.

The Pheim group reported a PAT of RM1.58 million in FY2024 on revenue of RM7.9 million. It had RM25.61 million in net assets and RM21.6 million in fixed deposits, cash and bank balances. In 2023, its PAT and revenue were higher at RM2.17 million and RM9.05 million respectively.

Its sale to Affin, subject to approval by Bank Negara Malaysia and the Securities Commission of Malaysia, is expected to be completed by 1Q2026.

Meanwhile, MBSB reported a 9MFY2025 net profit that was higher by 8.1% to RM275.88 million, despite revenue dropping 6.5% to RM2.62 billion. In the third quarter, net profit fell 21.7% year on year to RM95.64 million, reflecting weaker income across financing, investments and placements.

Bloomberg data shows that of four analysts who track MBSB, two rate it a “buy” and two a “hold”, with the 12-month average target price at 73 sen. Its share price is little changed year to date, closing at 70.5 sen on Dec 4, for a market value of about RM5.8 billion.

RHB Research has maintained a “buy” call with a target price of 79 sen on MBSB. “At MBSB’s 3Q results briefing, management was optimistic of an acceleration in financing growth in 4Q and 2026, which should catalyse a turnaround in earnings. While we slashed our earnings estimates post-9M25 results miss, MBSB’s yields remain significantly above the sector average, justifying our unchanged ‘buy’ rating,” the research house says.

The Employees Provident Fund is MBSB’s biggest shareholder with a 56.48% stake, followed by Yayasan Pelaburan Bumiputra with 12.78%. 

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