KUALA LUMPUR (Dec 11): MBSB Bhd (KL:MBSB) could potentially dish out another dividend between March and June 2025, according to BIMB Securities on Wednesday.

The company, formerly known as Malaysia Building Society Bhd, typically announces dividends in June the following year but had unexpectedly announced an interim dividend per share of 2.75 sen on Tuesday.

BIMB Securities, one of three research houses covering the stock, now expects dividend per share to total 3.5 sen for 2024 as well as for 2025-2026, translating into payout of between 52% and 87% for a yield of 4.7%.

Shares of MBSB have risen less than 5% this year, lagging strong gains of peers in the financial services industry, as the company struggled with competition due to its relatively smaller size while digesting the acquisition of Malaysian Industrial Development Finance (MIDF).

BIMB Securities remained cautious on its near-term prospects, and kept its ‘hold’ call on the stock and its target price of 80 sen. AmInvestment Bank also has the stock on ‘hold’ while Kenanga Investment Bank rates the stock ‘underperform’.

The consensus 12-month target price is 72 sen, implying potential downside of 4% from the current price of 75 sen.

BIMB Securities said it is keeping its forecast for MBSB’s net profit to hit RM329 million in 2024. Next year, net profit could rise by some 46% to RM480 million on the back of stable loan growth and improvement in both cost-income ratio and expected credit loss.

Still, MBSB needs to make more efforts to reduce the gross impaired financing ratio and boost its return-on-equity, BIMB Securities added.

In the third quarter ended Sept 30, 2024 (3QFY2024), MBSB posted a threefold jump in net profit to RM122.08 million due to the consolidation of MIDF following the completion of the merger in October 2023.

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