International Investment Bank's 2007 profit rises by more than 56%

Net Income for the year has reached $ 21.1m, representing an increase of 56.3% compared to $13.5m earned in 2006.

The result reflects the continued growth of IIB's business and its ability to effectively develop and offer a diverse range of attractive investment opportunities.

Total Income increased by 39.4% to $34.3m in 2007 from 24.6m in 2006, mainly from investment banking fees that increased by 33.3% to $22.8m from $ 17.1m in 2006, generated from the structuring, underwriting and placement of new investments.

Total Expenses increased by $2.1m, as IIB continued to build its staffing and operating infrastructure to support its growing business activities.

Total Assets increased by 172.2% from the 2006 year end figure to $257.3m. The increase mainly represents the net receipts from investors in respect of the share issue of $138.9m.

The Bank continued to maintain a high degree of liquidity, with 83.6% of total assets placed with selected investment-grade banks mainly in short-term Murabaha deposits.

Profitability Ratios for 2007 are impressive, evidenced by annualized returns of 43.4% on Average Paid up Capital (ROC), 27.1% on Average Equity (ROE) and 15.8% on Average Assets. Earnings per share of $1.0 rose from 31.3 cents in 2006 to 43.4 cents, while book value per share was $1.97 versus $1.43 a year ago. The Bank's Cost/Income Ratio improved from 45.2% in 2006 to 38.4% in 2007, which compares very favorably with our regional and international peers.

Capital Adequacy Ratio at 31 December 2007 of 244% is over 20 times greater than the minimum requirement of 12% by the Central Bank of Bahrain, mainly due to the increase in paid up capital and the prudent approach of the Bank in respect of risk management.

IIB increased its paid up capital from $43m to $ 110m reflecting the issue of 67 million new ordinary shares. Including the share premium, the Bank's Total Equity has increased by 252% during the year to $216.4m. Therefore, from both the regulatory and liquidity standpoints, there is considerable capacity to underwrite larger and more investment transactions in 2008 and beyond.

This prudent approach to liquidity and solvency is the cornerstone of the risk management policy laid down by the Board of Directors of the Bank and is designed to ensure that IIB can withstand external financial or economic downturns that may arise.

Commenting on the Bank's excellent financial results, Mr. Saeed Abdul Jalil Mohammad Al Fahim, Chairman of IIB, said: "Since its inception, our Bank has continually improved its financial performance as indicated by the key performance indicators of investment banking revenues, asset base, profitability ratios and capital adequacy. This has been achieved while pursuing an ongoing strategy of investing across diverse asset classes and geographic regions in order to provide our investors with superior risk adjusted returns. Our Bank is well poised to deliver its planned profitability and results in 2008 and in the years to come from its larger capital base, robust deals currently in its pipeline, continual support from shareholders and the efforts of IIB's strong management team."

During 2007, the fourth year of full operations, IIB concluded several investment transactions. These have included a steel re-bar manufacturing project in the Kingdom of Bahrain; a fully-tenanted high-quality portfolio of commercial real estate properties in Munich, Germany; real estate development in the United Arab Emirates and a real estate development company in the Kingdom of Saudi Arabia; and the acquisition of a 49% stake in a commercial bank operating in Azerbaijan, which is currently in the advanced stages of finalization.

Chief Executive Officer of IIB, Mr. Aabed Al-Zeera, commented, "Management has been satisfied with the Bank's performance since its inception at the end of 2003 which has seen considerable growth in net income of 92% in 2006 and 56% in 2007. Its investment philosophy has enabled the Bank to identify and deliver compelling opportunities to investors over the last four years, with an aggregate total project value of over $2.1bn including partners equity and debt.

Mr. Al-Zeera added: "Leveraging on the Bank's strong capital base and maintaining a close relationship with its shareholders and of its network of high caliber financial institutions and technical consultants, has helped us to meet our clients' demands for access to a well diversified portfolio of investments with superior risk-adjusted returns. The Bank enters 2008 with a robust investment pipeline and will be announcing a number of compelling deals in the months ahead."

The Board is proposing to distribute a cash dividend of 15% for 2007, subject to regulatory and shareholder approvals, while retaining $10.9m to further enhance the Bank's capital base.