INTRODUCTION

The Board of Malaysia Building Society Berhad is pleased to announce that its wholly-owned subsidiary, MBSB Bank Berhad (“MBSB Bank” or the “Issuer”), is establishing a sukuk programme of up to RM10.0 billion in nominal value (“Sukuk Wakalah Programme”) under the Shariah principle of Wakalah Bi Al-Istithmar for the issuance of Senior sukuk wakalah (“Senior Sukuk Wakalah”) and/or Tier-2 sukuk wakalah (“Tier-2 Sukuk Wakalah”) and/or Additional Tier-1 capital sukuk wakalah (“AT-1 Sukuk Wakalah”) (collectively, “Sukuk Wakalah”).

The proposed Sukuk Wakalah Programme was lodged with the Securities Commission Malaysia (“SC”) on 20 November 2019 in accordance with the SC’s Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (effective 15 June 2015).

DETAILS OF THE SUKUK WAKALAH PROGRAMME

The Sukuk Wakalah Programme has been structured to provide the Issuer with the flexibility to issue, from time to time, Senior Sukuk Wakalah and/or Tier-2 Sukuk Wakalah and/or AT-1 Sukuk Wakalah under the Shariah principle of Wakalah Bi Al-Istithmar.

The proceeds from the issuance of the Sukuk Wakalah shall be utilised by MBSB Bank for its Shariah-compliant general banking purposes and to refinance its outstanding capital instruments.

The issuance of Senior Sukuk Wakalah provides the Issuer with senior funding for its general banking purposes whilst the Tier-2 Sukuk Wakalah and AT-1 Sukuk Wakalah are structured to comply with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks (Capital Components) issued on 2 February 2018 (“CAFIB”) in relation to the requirements of a Tier-2 capital instrument and an Additional Tier-1 capital instrument, respectively.

The Tier-2 Sukuk Wakalah are intended to qualify as Tier-2 regulatory capital and the AT-1 Sukuk Wakalah as Additional Tier-1 regulatory capital of the Issuer.

This Announcement is dated 20 November 2019.