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Economic Profit and Loss Statement for 4th Quarter 2008

BackMar 10, 2009
General Announcement
Reference No MB-090310-32509

Company Name
:
MALAYSIA BUILDING SOCIETY BERHAD 
Stock Name
:
MBSB
Date Announced
:
10/03/2009


Type
:
Announcement
Subject
:
Economic Profit and Loss Statement for 4th Quarter 2008

Contents
:
Malaysia Building Society Berhad ("MBSB" or "the Company") would like to announce its Economic Profit and Loss statement for 4th quarter 2008.

Announcement Details :

ECONOMIC PROFIT AND LOSS STATEMENT FOR THE 4TH QUARTER 2008

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
4th Quarter 2008=1.373

3rd Quarter 2008=1.248


(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 31 December 2008 3.170%

At 30 September 2008 4.550%


(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.



TABLE 1
31 Dec 2008

(Unaudited)

RM'000

Group profit after taxation
32,575
Adjustments
- Deferred tax assets
17,000
- Deferred tax liabilities
(1,539)
Adjusted Group profit after taxation
48,036
Less: Cost of capital employed
(48,076)
Economic loss
(40)