International Investment Bank's 1st quarter net income rises by 42.3 per cent

The Q1 2007 Net Income of US$ 5.03 million compares favorably with US$ 3.54 million for the same period last year. Total Income increased by 66.2% to US$ 8.3 million in the quarter, mainly from investment banking fees that increased by US$ 2.6 million to US$ 7.1 million generated from the structuring, underwriting and placement of new investments. Reflecting lower commodity murabaha receivables and payables with financial institutions, total assets reduced by 20.8% from the 2006 year end to US$ 74.9 million. The Profitability Ratios for the 2007 first quarter were strong, evidenced by an annualized return on average equity of 32.6% and on average assets of 23.8%, while the capital adequacy ratio of 37% is three times greater than the minimum requirement of the Central Bank of Bahrain.

Commenting on the Bank's results, his excellency Mr. Saeed Abdul Jalil Mohammed Al Fahim, Chairman of IIB, said,

'IIB's strategy of investing across diverse asset classes and geographic regions continues to deliver record income, with excellent returns for the Bank's shareholders and investors. During the first quarter of 2007, the Bank has concluded investment transactions ranging from a manufacturing project in Bahrain, a fully-tenanted commercial building in Europe and a real estate development venture in Saudi Arabia. With a strong pipeline of deals under preparation, the outlook for further growth in earnings in 2007 and beyond looks very positive, based on rigorous due diligence and efficient execution.'

Mr. Aabed Al-Zeera, CEO of the Bank commented, 'During the 2007 first quarter, IIB acquired on behalf of its investors a 35% stake in a US$ 30 million Bahrain-based steel reinforcement bar manufacturer. Exit from the investment is intended to be within five years and an internal rate of return (IRR) in excess of 23% is targeted by IIB. Steel reinforcement bars ('rebars') are an important component in construction projects and generally represent around 15% of total construction costs. UNIROL is constructing an industrial facility which will be the first steel rolling mill in Bahrain.' The CEO added, 'Since its inception, the Bank has entered into real estate transactions totaling US$ 1.10 billion of which US$ 660 million were concluded in Europe and the remaining US$ 440 million were done in the UAE and Bahrain. The Bank has also concluded other commercial, industrial & financial projects totaling US$ 240 million.

Mr. Al-Zeera added, 'The Bank has also recently acquired a high-quality portfolio of commercial real estate properties in Munich, Germany, valued at US$ 210 million. IIB owns a 95% stake in this portfolio, comprising three commercial properties which are rented to 'Siemens Corporation' a blue chip German company and are strategically located in Munich. The Bank and its co-investors can effectively leverage continued growth and strong demand for office space in the German commercial property sector. The projected IRR on the investment is in excess of 10.1% p.a. over an investment horizon of five years, with a cash yield of 7% p.a. payable on a quarterly basis.'

The CEO of IIB said, 'The German investment, which marks IIB's fourth European investment in total, and its third real estate acquisition in Europe, is aimed at providing the Bank's GCC-based investors with access to the buoyant German commercial property market, which continues to expand at a rapid rate and is expected to deliver opportunities for both healthy returns as well as diversification.'

In addition, IIB has recently partnered with Islamic Corporation for the Development of the Private Sector (ICD), an affiliate of the Islamic Development Bank Group, by signing a shareholders agreement with several strategic partners for the establishment of Ewaan Capital in Saudi Arabia. Ewaan Capital, an asset management company with an authorized capital of 50 million Saudi Riyal, will come under the direct supervision of the Saudi Capital Markets Authority. It aims to engage in capital markets activities, fund management, investment banking and advisory services.

Mr. Aabed Al-Zeera, Chief Executive Officer of IIB said, 'With a strong pipeline of deals lined up and a clear investment focus, we are confident of achieving our ambitious performance goals for 2007. Our strategy continues to be the selection of key partners to offer attractive investment opportunities to our investors and shareholders. We are striving to further diversify our reach across various sectors, regions and partners.'