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1. Financial Year Ended 2006 Performance And headline kpis for 2006 2. Forward Looking Headline Kpis For 2007 To 2009 (Amended Announcement)

BackJun 14, 2007

In an effort to enhance greater transparency to the public, Malaysia Building Society Berhad ("the Company") wishes to announce its year-end achievement against the headline Key Performance Indicators ("KPIs") announced earlier. These headline KPIs have been set and agreed by the Board of Directors and Management of MBSB as part of the broader KPI framework that MBSB has in place, as prescribed under the Government Linked Company ("GLC") Transformation program and is disclosed on a voluntary basis.

The headline KPs represent the main corporate targets set by the Company for the year and should not be construed as being forecasts. In this respect, please note the following:

1. These headline KPIs are targets or aspirations set by the Company as a transparent performance management practice. These headlines shall not be construed as forecasts, projections or estimates of the Company or representations of any future performance, occurrence or matter as the headlines are merely a set of targets/aspirations of future performance aligned to the Company's strategy and which have been derived on the assumption that the Company and its subsidiaries ("the Group") shall operate under the current business environment.

Major challenges will include the dynamic and competitive financial institution landscape, mergers and acquisitions, meeting market demands for higher service levels, and the ability to attract and retain skill capabilities within the Company.
2. FINANCIAL YEAR ENDED 2006 PERFORMANCE 
Headline KPIs
FY2006 Target KPI
31/12/2006 Actual
1. Return on Equity ("ROE")
9%
8.2%
2. Pre-tax Profits Growth
37%
19.4%
3. Retail Loans Growth
30%
40.1%
4. EVA/Economic Profit
-
+RM10.5 million

Explanation:
2.1 For the audited financial year ended 2006, the actual Group pre-tax profit of RM30.409 million was lower as compared to the 2006 target. This was mainly due to higher provision made for losses on loans and financing which was off set by slightly higher net interest income and lower operating expenses.

2.2 The Group posted lower growth in pre-tax profit for 2006 which resulted a lower average Return on Equity as compared to the target for 2006.

2.3 The retail loans growth exceeded the target for 2006 due to the focus given by the management team.

3. FORWARD LOOKING HEADLINE KPIs FOR 2007-2009
The forward looking Headline KPIs for 2007 to 2009 are as follows:
Headline KPIs
2007
2008
2009
1.
Maintaining a minimum ROE of 7%
7.0%
7.5%
8.0%
2. Revenue growth
15.0%
15.0%
15.0%
3. Retail Loans Growth
25.0%
25.0%
25.0%

Explanation:
3.1 The minimum ROE of 7.0% is maintained due to the following scenarios;
Legacy accumulated losses; and
Smaller profit margin due to stiff market competition
 
3.2 The Company will accelerate the growth in revenue with aggressive new loan releases with focus on retail financing.
 
3.3 The strategy moving forward is to sustain the growth performance and continuous improvement through:
Incremental growth in retail financing
Improvement in asset quality
Develop human capital strategy
Intensify collection strategy