First Islamic announces 24 per cent increase in net income for 2003

The Board of Directors has recommended a dividend payment of $16.9 million, representing a return of 15 percent on the Bank's paid-in capital.

The Bank generated a return on average total equity of 25.5 percent, with total equity reaching $188.9 million, net of proposed dividend, a 15.9 percent increase over 2002.

During 2003, First Islamic achieved a successful exit from one US direct investment, Medifax-EDISM, Inc., which generated a return in excess of 135% to the investors in the transaction over the two-year holding period. The Bank also completed the acquisition of one new US direct investment transaction, and four new real estate transactions in the United States and Europe. In January 2003, the Bank incorporated and commenced operations of its European subsidiary, Crescent Capital Investments (Europe) Limited, based in London. Crescent Europe focuses on identifying and arranging private equity and real estate transactions in Europe.

Mohammed Abdulaziz Aljomaih, the Bank's Chairman, said: "Following another record year for First Islamic, we are deeply grateful to the Government of Bahrain, and the Bahrain Monetary Agency in particular, for their support of the Bank and for providing the sound regulatory and economic environment that has significantly contributed to our success. We are looking forward to our Annual General Meeting on 17th February 2004 to approve our financial statements and the proposed dividend."

Abdulaziz Hamad Al Jomaih, Vice Chairman of First Islamic, said: "Many of the objectives set out in the Bank's original business plan have been met. We have established a strong private equity franchise in the southeastern United States, and a number of successful partnerships with leading US and European real estate operators and developers."

Atif A. Abdulmalik, the Bank's Chief Executive Officer, said: "We are confident about the Bank's ability to source and execute quality transactions across business lines and geographic regions, its ability to build value and exit transactions, and the sustainability of its business model. We are grateful to our clients and business partners for their continuing support and confidence."

In April 2003, the Bank raised in excess of $100 million of medium-term financing through the issuance of three and five year sukuk (FIRSAN), to finance its expansion into Europe and to diversify its funding sources.

In September 2003, the Bank arranged the acquisition of a substantial interest in American Pad & Paper LLC, one of the largest manufacturers and distributors of paper-based office products in the United States, for a total transaction value of $82.5 million.

In the real estate line of business, in May 2003 First Islamic formed a joint venture with Sunrise Senior Living, Inc. to acquire a portfolio of properties in the assisted living sector in the United Kingdom for a total transaction of £64.6 million. Also in May 2003, the Bank formed a joint venture with Northacre PLC to develop 13 luxury residential apartments in Kensington, London for a total gross development cost of £39.4 million. In June 2003, the Bank formed a joint venture with Shurgard Self-Storage SCA to develop self-storage facilities in the United Kingdom, France, the Netherlands, Denmark, Sweden and Germany. The transaction was valued at approximately €232 million. In September 2003, a third joint venture was completed with Sunrise Senior Living, Inc. to acquire a portfolio of 28 assisted living properties in the United States, for a transaction value of $417.4 million.

First Islamic Investment Bank E.C., with a paid-in share capital of $112.5 million, is headquartered in Bahrain with offices in Atlanta and London. At year-end 2003, the Bank had total assets of $818.0 million and shareholders equity of $188.9 million. To date First Islamic has completed investment transactions with a total value in excess of $4.0 billion.