30 06 2011 Overview GDP Rate of Growth

30/06/2011 Overview

GDP Rate of Growth * Fi. Bi’s Forecast 2

Bank of Israel Interest Rate* and the Inflation Rate Bank of Israel Interest Rate 3 Inflation Rate * Bank of Israel Interest rate for the last month of the Year / Period ** Fibi’s Forecast

Israel Credit Rating MOODY’S S&P Long Term A 1 A A Short Term P 1 F 1 A 1 Outlook 4 FITCH Stable

Investments in and of Israel 2006 -2010 US$ millions Foreign Investments in Israel In 2006: Acquisition of “Iscar” by Berkshire - Hathaway 5 Israeli Investments Abroad In 2006: Acquisitions by “Teva”

About FIBI

FIBI Universal bank with strong niche position in capital markets, foreign exchange and foreign trade Domestic subsidiaries target focused audiences: affluent banking (UBank), security sector - retail banking (Otsar Hahayal), ultra-orthodox Jews (PAGI), and teachers (Massad) Branches: 174 in Israel (including subsidiaries) Equity: NIS 5. 7 Billion 5 th largest banking group in Israel 7

FIBI’s Multi-Annual Strategic Road Map Focus on Retail and PB while Realizing Synergies, Restraining Expenses Mergers and Acquisitions Integration of the banks’ computer systems Group branding Market share in private banking increased Merger of mortgage banks Number of retail customers doubled 2003 Pension planning Structured Investment advisory services products advisory services Branch network optimization measures No. of branches 8 Mortgages Cross selling products within the group 2004 2005 2006 2007 2008 2009 2010 2011

FIBI Banking Group First International Bank - Corporate + middle market banking - Private + affluent banking - Capital & Money Markets - 80 branches Retail Bank Cluster - Retail - Branches: 19 - Since 2008 - Key Audience: Teachers 9 - Capital Markets, Trust & Custody - Private + affluent banking - 7 branches - Since 2004 - Retail /Commercial - Branches: 48 - Since 2006 - Key Audience: Military Personnel - Retail/Commercial - Branches: 20 (as for 20/01/2011) - Since 1977 - Key Audience: Ultra Orthodox International - Business / Corporate Banking - Since 1982 - Private Banking - Since 1984

FIBI’s Rating Ma’alot - S&P Moody’s Issuer Bank Deposits – foreign & domestic, long & short term A 3 prime-2 Financial Strength Stable Subordinated Notes 10 AA - / Negative Midrug – Israel BFSR D+ Outlook AA / Negative Midrug Aa 1

Ownership Structure Bino/Liberman Group E - 20. 94, V - 20. 94 E - 0, V – 0 (stocks dormant) E - 79. 06, V - 79. 06 The Public FIBI Holding Company Ltd. FIBI Investment House Ltd. E + V - 26. 45 E + V - 53 E + V – 20. 02 E – 73. 79 V – 73. 33 E – 100 V – 100 Israel Discount Bank E - 51 V - 51 E - 75 V - 75 The First Int’l & Co. Underwriting and Investments Ltd. 11 E - 100 V - 100 Modus-Selective Investments Management & Advice Ltd. E - % Share in Equity V - % Voting Rights E - 100 V - 100 International Leasing Ltd. E - 100 V - 100 E - 28. 2 V - 21 Israel Credit Cards Ltd. E - 100 V - 100 First International Issues Ltd.

Shareholders The Liberman family 12 12 12 The Liberman family has enjoyed sustained success in both Australia and Israel for over 50 years. Jack Liberman, an astute Australian businessman and entrepreneur, along with his children, built a large and diversified investment company (JGL Investments PTY Ltd. ). The family, together with the Bino Group, in a long-term partnership, hold a controlling interest in both FIBI Holdings and Paz Oil Company Ltd. (“Paz”), Israel’s leading petrol player.

Shareholders Mr. Zadik Bino Mr. Zadik Bino is a highly reputable businessman with broad business interests in Israel. In a banking career spanning over 25 years, Mr. Zadik Bino filled senior positions in the local banking sector, which included CEO of Bank Leumi of Israel and Chairman of the Board of Directors and CEO of The First International Bank of Israel. Mr. Zadik Bino was also a member of the Advisers Committee and the Committee for Banking Matters of the Bank of Israel. Since 1989, Mr. Bino has devoted himself to his family's private business interests in Israel and abroad. Through the years, the Bino Group has engaged in the execution, development and nurturing of various investments. Besides banking, the main investments of the Bino family is in Energy (through a 45. 5% holding in Paz oil Company Ltd. - a listed company which is Israel’s largest supplier of refined petroleum products, and which owns the Ashdod Refinery). Since acquiring the controlling interest in FIBI Holdings and the Bank in 2003, both Mr. Zadik Bino and his son, Mr. Gil Bino, serve as members of the Board of Directors of FIBI and the Bank. On June 2010 Mr. Gil Bino was appointed as FIBI Holdings chairman instead of Mr. Zadik Bino. The controlling interest in FIBI and in the Bank is held by the Bino Family (Mr. Zadik Bino and his three children). 13 13 13

Financial Reports 30/06/2011

Net Operating Earnings and ROE NIS Millions 13. 5% 7. 3% 5. 6% 15

Statements of income 01 -06/2011– 01 -06/2010 NIS Millions 01 -06/2011 01 -06/2010 Net change 1, 118 1, 091 27 N. A 39 0 (43) 714 722 (8) 37 0 37 6 14 (8) 1, 426 1, 423 3 Operating earnings before tax 449 361 88 taxation 183 161 Operating earnings after tax 266 200 66 30 31 (1) Exterior share holders & extraordinary income (10) (17) 7 Net earnings 286 214 72 Net interest income before provision for doubtful debts Recovery of loan losses Provision for doubtful debts Operating commissions Income from investment in shares (& dividend) Other income Operating & other expenses The banks net equity in operating results of investee companies 16 0 4 -

Provision for Doubtful Debts to Credit to the Public Ratio Other 4 Leading Banks 17 FIBI

Doubtful debts according to the new B. O. I Regulation (NIS millions) Balance for date Change 30/06/2011 Defective credit risk 31/12/2010 1, 192 1, 242 (50) 347 511 (164) 1, 055 1, 034 21 375 353 22 2, 969 3, 140 (171) Inferior credit risk Credit risk subject to special supervision Off-balance sheet credit risk * Total Doubtful debts * After accounting deductions and before credit lost provision 18

Operating & Other Expenses (NIS Millions) 1 -6/2010 19 1 -6/2011

Efficiency Ratio: Operating Income to Expenses Operating Income % Income / Cost Ratio % Adjusted Income / Cost Ratio * Operating Expenses to Income 53. 1% 51. 9% • Operating income excluding dividend, realization or decline in value of shares and severance pay fund gains; expenses excluding severance pay fund effects, special provisions. 20

Capital Adequacy Ratio – Basel II Core Tier 1 FIBI Tier 2 * * ** 14. 30% 14. 57% 13. 42% * * 21 4 top Banks **

Changes in Assets, Deposits & Credit to the Public (NIS Billions) Assets 22 Equity Credit to the public Public Deposits

Income & Assets according to segments 23

Composition of Total Proprietary Trading Book – 30. 06. 2011 volume 30. 6. 11 Composition 31. 12. 10 Chan ge Government bonds & Secured by Government bonds 9, 357 10, 616 78% 67% 11% Commercial Banks bonds 1, 168 2, 695 10% 17% (7%) Shares 644 947 5% 6% (1%) Other 791 1, 544 7% 10% (3%) Of which: Fx Corporate Bonds 137 690 Of which: NIS Corporate Bonds 24 volume 31. 12. 10 579 854 11, 960 15, 802 100% Total

30/06/2011 Capital Adequacy – Basel II 12. 98% Core capital – Bazel II 8. 38% Deposits from the Public Credit to the Public 63. 9 NIS Billion 79. 0 NIS Billion Deposits / Credit Ratio 123. 8% State of Israel Bonds: 8. 7 NIS Billion Liquid Assets 33. 5% Gov. & Bank Deposits 2. 2 NIS Billion Deposits-Bank of Israel: 14. 5 NIS Billion Bonds-Foreign states: 0. 7 NIS Billion Deposits in Banks: 3. 3 NIS Billion 44. 1% Of capital available for Investments 25 Capital Notes 5. 0 NIS Billion Capital available for Investments 3. 9 NIS Billion Bonds-Banks: 1. 2 NIS Billion NIS+Forex Corporate Bonds: 0. 8 NIS Billion Structure Products, Hedge Funds & Stocks: 0. 8 NIS Billion Credit Risks in VAR Terms: (0. 04) NIS Billion

Changes in Net Profit - Subsidiaries NIS Millions 01 -06/2011 Change 22. 3 16. 8 32. 7% 28. 4 25. 7 10. 5% 41. 3 19. 7 110% 16. 5 26 01 -06/2010 16. 5 2%

Banking Subsidiaries in Israel PAGI, in which FIBI has a 100% equity holding, is a retail bank with 19 branches. the majority of its clients belong to the ultra-orthodox and orthodox sectors. PAGI maintains a unique positioning as Israel’s only orthodox oriented bank and its share in its target is significant. PAGI’s strategy is to aggressively grow its client base, while focusing on target segments in personal, business, and institutional banking. UBANK - FIBI acquired 100% of share capital of UBANK (formerly Investec Bank (Israel) Ltd. ) in December 2004. The acquisition of UBANK significantly bolstered FIBI’s competitive position in private banking, capital markets and foreign currency trading. In 2007 UBANK launched an innovation in Israeli banking - dedicated branches for affluent clients. This premium service (above retail and bellow classic private banking) comprises distinctive branch design and hours of operation, along with many other attractive features. 27

Banking Subsidiaries in Israel OTSAR HAHAYAL - FIBI acquired the majority share of Otsar Hahayal in August, 2006, it now hold 73. 8% of the bank. Bank Otsar Hahayal specializes in retail and small to medium-sized businesses (SMEs) and has a high proportion of current and former military and defense industry personnel within its client base. The inclusion of Bank Otsar Hahayal’s operations creates a banking group with a comprehensive and diverse range of activities and earnings. FIBI has completed the process of integrating Otsar Hahayal’s IT systems and is in the process of implementing a shared services model across headquarter functions. MASSAD - FIBI acquired 51% of the share capital of Massad in May 2008. Massad, is a sectorial bank, specializes in teaching personnel. FIBI completed the process of integrating Massad’s IT System and is currently implementing a shared services model across headquarter support functions. Massad's identity as the “teachers' bank” also places it in an advantageous position in the Arab sector, and explains its success in this sector despite rising competition. 28 28 28

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