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Economic Profit And Loss Statement For 1st Quarter 2008

BackJun 03, 2008
Malaysia Building Society Berhad ("MBSB" or "the Company") would like to announce the Economic Profit and Loss Statement for 1st quarter period ended 31 March 2008.

Announcement Details :

ECONOMIC PROFIT AND LOSS STATEMENT FOR THE 1ST 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 below is disclosed on a voluntary basis.

The assumptions used in computing the economic profit 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
1st Quarter 2008 = 1.303
4th Quarter 2007 = 1.332

(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 March 2008 3.792%
At 31 December 2007 4.130%

(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.


1stQtr 2008
3 months (Unaudited)
RM'000
2007
12 months
(Audited)
RM'000
Group profit after taxation 19,607 53,319
Less: Cost of capital employed (12,930) (49,158)
Economic profit 6,677 4,161