Audited Financial Statements for Financial Year Ended 31 December 2024

MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad)

(Incorporated in Malaysia)

FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Directors' Report for the financial year ended 31 December 2024

The Directors have pleasure in presenting their report together with the audited financial statements of MBSB Berhad ("the Company") and its subsidiaries (together referred to as "the Group") for the financial year ended 31 December 2024.

Principal activities

The Company is principally engaged in investment holding and had ceased providing new financing.

Financial results

Group Company RM'000 RM'000

Net profit for the financial year

406,776

417,019

Dividends

The dividends on ordinary shares paid or declared by the Company since 31 December 2023 were as follows:

RM'000

In respect of the financial year ended 31 December 2024:

- single-tier interim dividend of 2.75 sen per ordinary share on 8,222,312,432

ordinary shares declared on 10 December 2024 and paid on 6 January 2025 226,114

In respect of the financial year ended 31 December 2023:

- single-tier interim dividend of 3.50 sen per ordinary share on 8,222,312,432

ordinary shares declared on 18 April 2024 and paid on 4 July 2024 287,781 513,895

On 3 March 2025, the Company announced a single-tier interim dividend of 1.80 sen per ordinary share in respect of the financial year ended 31 December 2024. Based on the number of shares in issue of 8,222,312,432 ordinary shares as at 31 December 2024, the dividend payable would be RM148,001,624.

The financial statements for the current financial year do not reflect the interim dividend. The dividend will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 December 2025.

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Reserves, provisions and allowances

There were no material transfers to or from reserves or provisions or allowances during the financial year other than those disclosed in the financial statements and notes to the financial statements.

Issue of shares and debentures

During the financial year, there were no changes to the issued and paid-up ordinary share capital.

Bad and doubtful debts and financing

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps to ascertain that proper actions had been taken in relation to the writing off of bad debts and financing and the making of allowance for doubtful debts and financing and satisfied themselves that all known bad debts and financing had been written off and that adequate allowance had been made for doubtful debts and financing.

At the date of this report, the Directors are not aware of any circumstances which would render the amount written off for bad debts and financing, or the amount of the allowance for doubtful debts and financing in the financial statements of the Group and of the Company, inadequate to any substantial extent.

Current assets

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps to ascertain that any current assets, other than debts and financing, which were unlikely to realise in the ordinary course of business, including the values of current assets as shown in the accounting records of the Group and of the Company had been written down to an amount which the current assets might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading.

Valuation methods

At the date of this Report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Contingent and other liabilities

At the date of this report, there does not exist:

• (a) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

• (b) any contingent liability of the Group or of the Company which has arisen since the end of the financial year other than those arising from the normal course of business of the Group and of the Company.

No contingent or other liability in the Group or the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

Change of circumstances

At the date of this Report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company, that would render any amount stated in the financial statements misleading.

Items of an unusual nature

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended 31 December 2024, have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

Directors

The Directors of the Company who have held office during the financial year and during the period from the end of the financial year to the date of this report are:

Dato' Wan Kamaruzaman bin Wan Ahmad (appointed on 24 January 2024) Puan Lynette Yeow Su-Yin

Encik Mohamad Abdul Halim bin Ahmad Dr. Loh Leong Hua

Datuk (Dr.) Yasmin binti Mahmood

Encik Sazaliza bin Zainuddin (resigned on 9 May 2024, re-appointed on 1 January 2025) Encik Ho Kwong Hoong (appointed on 1 November 2024)

Tan Sri Abdul Rahman bin Mamat (resigned on 31 December 2024) Ir. Moslim bin Othman (resigned on 6 February 2024)

Datin Hoi Lai Ping (resigned on 24 January 2024)

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Directors (cont'd.)

The Directors of the Company's subsidiaries who have held office during the financial year and during the period from the end of the financial year to the date of this report (not including those Directors listed above) are:

Datuk Azrulnizam bin Abdul Aziz Encik Kamarulzaman bin Ahmad Encik Arul Sothy Mylvaganam Cik Hasnah binti Omar

Encik Ahmad Lutfi bin Abdul Mutalip @ Talib Datuk Mohd Nasir bin Ali

Encik Ahlan Nasri bin Mohd Nazir @ Nasir Encik Azlan bin Abdullah

Mr. Tai Keat Chai

Encik Hasman Yusri bin Yusoff Encik Shan Kamahl bin Mohammad Mr. Johnson Rudd a/l Sunny Rudd Encik Azizi bin Mustafa

Encik Sheikh Shahruddin bin Sheikh Salim Mr. Chia Ku Tang

Encik Kheirul Anwar bin Mohamed Dato' Seri Diraja Nur Julie Gwee Ariff Encik Asrul Hazli Salleh

Ms. Ng Jui Shan

Encik Jesleigh bin Johari

Tan Sri Abdul Rahman bin Mamat (redesignated on 1 January 2025) Encik Aqeel bin Mokhtar (appointed on 7 January 2025)

Encik Chong Yiow Loong (appointed on 27 September 2024) Encik Shawn Conrad Campos (appointed on 1 September 2024) Norashikin binti Mohd Kassim (appointed on 1 August 2024)

Ms. Sim Fen Nee (appointed 5 March 2024)

Ms. Rupavathy a/p A.V. Govindasamy (resigned on 7 January 2025) Encik Hazim bin Yahya (resigned 27 September 2024)

Dato' Azlan bin Shahrim (resigned on 15 July 2024)

Encik Ahmad Farouk bin Mohamed (resigned on 3 March 2024) Dato' Kaziah binti Abd Kadir (retired on 31 December 2024) Datuk Johar bin Che Mat (retired on 14 June 2024)

Mohamed Rafe bin Mohamed Haneef (appointed on 1 February 2024 and resigned on 19 August 2024)

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Directors' interests in shares and share options

According to the Register of Directors' shareholdings, the interests of the Directors in office at the end of the financial year in the shares and options over shares of the Company and its related corporations during the financial year were as follows:

Number of ordinary shares

Granted/

Name of Directors Indirect interest:

01.01.2024

acquired Disposed

31.12.2024

Ordinary shares of MBSB Berhad

Tan Sri Abdul Rahman bin Mamat #

148,400

-

(148,400)

- #

Indirect interest via shareholding held by his son. Tan Sri Abdul Rahman bin Mahat, by virtue of his total indirect interest of 148,400 shares in the Company, is deemed to have an interest in the shares of all of the Company's subsidiaries to the extent that the Company has interest.

Other than as disclosed above, the Directors in office at the end of the financial year did not hold any interest in shares and options over shares in the Company and its related corporations during the financial year.

There were no options granted to any person to take up unissued shares of the Company during the financial year.

Directors' benefits

Since the end of the previous financial year, no Director of the Company has received, nor become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in Note 37 to the financial statements) by reason of a contract made by the Company or a related corporation with any Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by mean of the acquisition of shares in or debentures of the Company or its related corporations during the financial year.

Indemnity and Takaful cost

The Directors and Officers of the Group and of the Company are covered by Directors' and Officers' Liability Takaful. The annual takaful cost that is payable by the Group and the Company amount to RM215,550 (2023: RM217,410) and RM71,850 (2023:RM135,000) respectively.

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Ultimate holding body

The ultimate holding body is Employees Provident Fund ("EPF"), a statutory body established under the Employees Provident Fund Act 1991 (Act 452).

Subsidiaries

The principal activities of the subsidiaries are described in Note 12. There have been no significant changes in the nature of the principal activities of the subsidiaries during the financial year.

Directors' remuneration

The remuneration in aggregate for Directors of the Group and the Company for the financial year are as follows:

Auditors' remuneration of the Group and the Company are RM4,642,000 (2023: RM2,921,000) and RM945,000 (2023: RM702,000) respectively. Details of auditors' remuneration are as set out in Note 36 to the financial statements.

Other auditors' remuneration of the Group is RMnil (2023: RM1,008,000). Details of auditors' remuneration are as set out in Note 36 to the financial statements.

Business review for 2024

The Group registered a profit before taxation and zakat of RM586 million for 2024 as compared to a profit before taxation and zakat of RM560 million in the prior year. As at 31 December 2024, the Group had assets of RM64,264 million (2023: RM66,663 million), gross loans, financing and advances of RM42,983 million (2023: RM42,044 million), total deposits of RM48,835 million (2023: RM47,624 million) and shareholders' equity of RM9,778 million (2023: RM9,838 million).

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Business review for 2024 (cont'd.)

The Group's gross loans, financing and advances grew by 2.2% for the year to RM43 billion, from both consumer and corporate/commercial financing. Consumer Banking, which accounts for 68.4% of the total gross financing portfolio, grew by 0.8%, led by mortgage and property Islamic financing which grew by 11.5%. Corporate/commercial gross financing grew by 5.6% contributed mainly by trade finance.

Outlook for 2025

The global economy is expected to remain stable in 2025, supported by monetary policy easing, positive labour market conditions and moderating inflation. Global trade growth is expected to recover further, supported by the strength in electrical and electronics ("E&E") and non-E&E goods. Based on the World Bank's forecast, global growth is projected at 3.3%, a slight increase from 3.2% expected for 2024. The growth outlook remains subject to downside risks, mainly from escalation of geopolitical tensions, trade policies in major economies, and heightened volatility in global financial markets.

According to Bank Negara Malaysia ("BNM") the Malaysian economy is expected to be driven by robust expansion in investment activity, strong exports and resilient household spending. Employment and wage growth, as well as policy measures would remain supportive of household spending. The Ministry of Finance projected Gross Domestic Product expansion of 4.5%-5.5% in 2025, compared to 2024's expected expansion of 5.0%.

The Group's business plan for 2025 will be driven by our FLIGHT26 strategy. Introduced in early 2024, FLIGHT26 is a 3-year strategy that targets improvement and optimisation in 4 key areas, namely our cost of fund, financing growth, operating expenditure, and higher proportion of fee-based income. The Group will strive to deliver excellent customer service and higher value proposition via new products and digital channels, as well as superior customer experience offerings.

The Group also aims to realise further synergies with its subsidiary, Malaysian Industrial Development Finance Berhad ("MIDF") particularly in the commercial segment, which includes the vibrant small, medium enterprises, and in the growing wealth segment.

Statement of Corporate Governance

The Board of Directors ("the Board") of the Company is pleased to report the application by the Company of the principles contained in the Malaysia Code on Corporate Governance ("the Code") and the extent of compliance with the best practices of the Code. The Board has endeavoured to apply the principles and comply with the relevant best practices of corporate governance as set out in the Code. The Company is also required to comply with BNM's policy document on Corporate Governance ("BNM/RH/PD 029-9") issued on 3 August 2016.

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MBSB BERHAD (197001000172 / 9417-K)

(Formerly known as Malaysia Building Society Berhad) (Incorporated in Malaysia)

Statement of Shariah Governance

MBSB Berhad Group

The Group is committed to upholding the highest standards of Shariah governance across its subsidiaries companies. To strengthen this commitment, the Shariah Advisory Committee ("SAC") of MBSB Bank and the Shariah Committee of MIDF Amanah Investment Bank Berhad have been unified into a single SAC under MBSB Bank, serving as the central authority for Shariah compliance across the Group. This ensures the integrity and consistency of Shariah principles across all operations, business activities, and governance frameworks.

The unified SAC provides Shariah rulings, advice, and endorsements applicable to all subsidiaries within the Group. It ensures compliance with Shariah requirements either directly or through its delegated functions and oversees the implementation of Shariah frameworks for the Group to maintain robust governance and effective Shariah compliance.

Engagement between the SAC and the respective Boards of MBSB Bank and Board of other subsidiaries facilitates seamless communication on Shariah governance matters. This includes regular SAC meetings, participation of the SAC Chairman or Deputy Chairman in Board discussions, and quarterly reporting to ensure alignment and informed decision-making across the Group.

To support these efforts, MBSB Bank Board has reviewed and endorsed the planned resources for 2025 to strengthen Shariah support and control functions across the Group. These resources, as reviewed by the SAC, are deemed adequate to support the Group-wide Shariah governance objectives, ensuring effective oversight and implementation.

The unification of the SAC reflects the Group's commitment to fostering a sound Shariah governance culture across, reinforcing stakeholder trust in its Islamic finance practices and ensuring a unified, consistent approach to Shariah compliance across the Group.

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