MBSB prepares to become an Islamic bank

Kuala Lumpur

MALAYSIA Building Society Bhd, a lender controlled by the country's biggest pension fund, plans to adopt stricter coverage standards for loan impairments as it prepares to become an Islamic bank.

The company known as MBSB wants to raise its loan-loss coverage ratio from about 80 per cent to 100 per cent, matching the level most banks have in Malaysia, chief executive officer Ahmad Zaini Othman said in an interview on Friday. As a non-bank financial institution, MBSB is currently not required by the central bank to adhere to a more stringent benchmark to protect itself from future losses.