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Others: Economic Profit And Loss Statement For The Year Ended 31 December 2010

BackMar 25, 2011
Date Announced
:
25/03/2011  



Type
:
Announcement
Subject
:
OTHERS

Description
:
Economic Profit and Loss Statement for the year ended 31 December 2010
   
TABLE 1
31 December 2010

(Audited) RM’000

31 December 2009

(Audited) RM’000

Group profit after taxation
146,025
57,203
Adjustments
- Deferred tax assets
-
16,000
Adjusted Group profit after taxation
146,025
73,203
Less: Cost of capital employed
(53,000)
(60,772)
Economic profit
93,025
12,431

Announcement Details/Table Section :

Malaysia Building Society Berhad (“MBSB” or “the Company”) would like to announce its Economic Profit and Loss statement for the year ended 31 December 2010.

ECONOMIC PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 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
4th Quarter 2010=1.414

3rd Quarter 2010=1.409
2nd Quarter 2010=1.398
1st Quarter 2010=1.396

(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 2010=4.000%
At 30 September 2010=3.610%
At 30 June 2010=3.910%
At 31 March 2010=4.160%

(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.