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MBSB (1171)

Economic Profit and Loss Statement for the period ended 30 June 2010

BackAug 26, 2010
Date Announced
:
26/08/2010  




Type
:
Announcement
Subject
:
Economic Profit and Loss Statement for the period ended 30 June 2010

Contents
:
Malaysia Building Society Berhad (“MBSB” or “the Company”) would like to announce its Economic Profit and Loss statement for the period ended 30 June 2010

Announcement Details :

ECONOMIC PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED 30 JUNE 2010

Economic profit or loss is an amount earned for a period by a business after deducting the operating expenses and a charge of opportunity cost of capital employed. The economic profit and loss statement set out in Table 1 is disclosed on a voluntary basis.

The assumptions used in computing the economic profit/loss are set out below:

(i) The cost of equity is calculated based on the following formula:

Cost of equity = (Beta x Market Risk Premium) + Risk Free Rate

(ii) The Beta used in the calculation is the 5 years adjusted Bloomberg Rate:

Quarterly Period Beta
2nd Quarter 2010=1.398

1st Quarter 2010=1.396
4th Quarter 2009=1.417

(iii)The risk free rate is the rate of return of a 10-year Malaysian Government Securities at the closing of the reporting period:

Risk Free Rate
At 30 June 2010=3.910%
At 31 March 2010=4.160%
At 31 December 2009=4.250%

(iv) The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.

This announcement is dated 26 August 2010.

Table 1
30 June 2010 (Unaudited)

RM’000

30 June 2009 (Unaudited)

RM’000

Group profit after taxation
92,701
22,233
Less: Cost of capital employed
(28,404)
(29,440)
Economic profit/(loss)
64,297
(7,207)