KUALA LUMPUR (Oct 2): Sabah Development Bank Bhd (SDB) on Wednesday said the board had so far approved settlement proposals worth RM879 million of total non-performing loans (NPLs) of RM5 billion.

The state-owned bank is also expected to finalise additional settlement proposals by year end, bringing the total amount to more than RM1 billion, SDB said in a statement. 

Following this, SDB said it is confident that the entire recovery process can be wrapped up within three years. 

“Since the new board and management took over in the second half of 2023, aggressive legal actions have been taken against both borrowers and guarantors of the NPLs, including the appointment of receivers and managers,” it said.

SDB said it had taken legal action against all of its NPLs and achieved positive outcomes after a “new recovery team” was set up in September 2023.

“Arising from this aggressive stand taken by the SDB board on the recovery of its bad loan assets, several borrowers have come forward with their settlement proposals and to work with SDB on resolving their outstanding loans,” it noted.

SDB said that it is bullish that this strong momentum will continue as the RM5 billion NPLs are secured against tangible assets.

To recap, Sabah Finance Minister Datuk Seri Masidi Manjun in July revealed that SDB’s NPLs stood at RM5 billion or 75% of its total loan portfolio of RM6.6 billion as at end-May.

Masidi was quoted as saying that SDB had “poor quality of existing loan assets”, and was infamous among the borrowers as a “last resort” to fund projects no other bank would finance. 

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