OSK Research Sdn Bhd is positive on Malaysia Building Society Bhd (MBSB) following the government's salary adjustments based on its position as one of the few players in the niche civil servants personal loan space.
In a note today, OSK Research said assuming a conservative five per cent growth in the federal government's emoluments for this year, the potential size of the civil servant personal financing market would theoretically expand by RM4.6 billion.
"This means that MBSB can easily expand its civil servants personal loan base by another RM204.8 million, assuming that the company maintains its current market share at 4.5 per cent," it said.
It, however, said the positive effects could only be measured from the second quarter this year onwards as the adjusted salaries would only be paid out this month or the next.
The government yesterday scrapped the Public Service New Remuneration Scheme for civil servants and opted to continue with the Malaysian Remuneration System with improvements.
OSK said it has retained its 'buy' call on MBSB at RM2.70.
It said it liked the company's diversification strategy and innovativeness in expanding its business. -- Bernama