First International Bank of Israel Ltd

First International Bank of Israel Ltd. - FIBI 1

GDP Rate of Growth (%) * Forecast 2

Rate of Inflation (%), Bank of Israel Interest Rate (%) average Bank of Israel interest rate Rate of inflation 3 * Forecast

Exchange Rate ($/NIS) - average * Forecast 4

Foreign Investments in Israel* (US$ Millions) *In the private sector excluding banking In 2006 : 1. Capital issue by “Teva” 2. Acquisition of “Iscar” by Berkshire-Hathaway 5

Israeli Investments Abroad* (US$ Millions) *In the private sector excluding banking In 2006 : Acquisition by “Teva” 6

Country Ratings 7

First International Bank of Israel Ltd. - FIBI Overview September 30, 2008 8

Ownership Structure As of 23. 7. 2008 Bino-Liberman Group E. 25. 95% V. 0% E. 15. 505% V. 11. 232% The Public E. 58. 545% V. 88. 768% FIBI Holding Company Ltd. E. 19% V. 16. 31% E. 68% V. 66% Otsar Hahayal E. 75% V. 25% The First Int’l & Co. Underwriting and Investments Ltd. E. 100% V. 100% Israel Discount Bank E. 54. 33% V. 72. 59% The Public The First International Bank of Israel Ltd. E. 68% V. 68% PAGI Poalei Agudat Israel Bank Ltd. E. 51% V. 51% E. 100% V. 100% Bank Massad FIBI Investment House Ltd. FIBI Bank (UK) Plc London E. 50% V. 60% E. 26. 48% V. 11. 1% E. 100% V. 100% UBank Ltd. (Formerly: Investec Bank (Israel) Ltd. ) Modus-Selective Investments Portfolio Ltd. E. 100% V. 100% FIBI Bank (Suisse) Ltd. Zurich E. 100% V. 100% Kidma – Provident Funds Management Ltd. E. Percentage of equity share capital ownership V. Percentage of voting power exercised at any general meeting 9

First International Bank Group FIBI § Corporate + middle market banking § Private + affluent banking § 85 branches Retail bank cluster UBank Ltd. (Formerly: Investec Bank (Israel) Ltd. ) § Capital markets Otsar § Trust and custody Bank Poalei Agudat Hahayal § Private and Israel Massad Bank Ltd. affluent banking retail/commercial § 6 branches (unique affluent banking 17 20 48 branches) 2006 2008 1977 International PAGI Focus: Branches: Since: Key audience: teachers ultra-orthodox defense + military FIBI UK (London) § Business banking § Private banking FIBI Switzerland (Zurich) § Private banking 10

Shareholders 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 Zadik Bino, in a long-term partnership, hold a controlling interest in both FIBI Holdings and Paz Oil Company Ltd. (“Paz”), Israel’s leading petrol player. Mr. Zadik Bino has served in several senior positions in the Israeli banking industry in 25 years of activity in this field, among them as CEO of Leumi Bank and CEO as well as Chairman of First International Bank of Israel. He also served for many years as a public representative in the Advisory Committee and the Committee for Banking Matters of the Bank of Israel. In 1989 Mr. Bino founded Bino Holdings Ltd. , and devoted himself to his private business affairs. Bino Holdings Ltd. is a private company, fully controlled and owned by Mr. Bino, which engages in the execution, development and nurturing of investments. Bino Holdings main investment, along with FIBI, is in Paz oil company. Since July 2006 Bino acquired, via Paz, Ashdod Refineries. Bino has various other investments in industrial sectors. It should be noted that his investment in FIBI was made from his own resources without requiring bank loans. On 2/2008 Mr. Zadik Bino transferred 47. 5% of his holdings in Binohon Ltd. , in equal shares and without consideration, to his 3 children. 11

First International Bank of Israel - FIBI • Universal bank with strong niche position in capital markets, foreign exchange and foreign trade • Domestic subsidiaries target focused audiences: affluent banking (UBank), defense sector - retail banking (Otsar Hahayal), ultra-orthodox Jews (PAGI), and teachers (Massad) • Foreign subsidiaries in London (commercial banking) and Zurich (private banking) • Branches: 178 (including subsidiaries and foreign subsidiaries) • Employees: 5, 055 • Equity: NIS 5. 5 Billion (US$ 1. 6 B) • 5 th largest banking group in Israel 12

Bank Ratings 13

Strategy - Main Focus CORE CAPABILITIES: • Top class reputation in private banking services, especially dealing room, specialized investment advice center and TASE futures and operations index, where FIBI is a market leader • Distinctive professional standards in: global capital markets, currency exchange, structured products and foreign trade • Strong traditional position in corporate banking CLIENTS: Client-centric vs. product oriented banking • Corporate finance: increase penetration of middle market • Private banking: extend presence in affluent segment • Retail banking: broaden overall footprint (e. g. , acquired Bank Otsar Hahayal and Massad) 14

Strategy - Main Focus GROUP CONSOLIDATION: Realize synergies from three bank acquisitions: • Implement shared-services model, including IT systems • Cross-sell products (mortgages, structured products, advisory services) • Create streamlined and effective branch network NEW PRODUCTS: State-of-the-art pension-planning advice offering OTHER: • Upgraded scoring model and processes in anticipation of Basel II, including development of advanced credit-scoring models for risk-based pricing • Outsourcing: first Israeli bank to outsource its computer infrastructure • Large but conservatively-managed foreign proprietary trading book 15

Pension Advisory Services As of 14. 12. 2008 Accumulated sum (NIS) - 1, 257, 728, 765 Number of meetings held – 5, 141 Number of applications received – 20, 252 At the beginning of 2008, the bank launched its pension advisory services, which have the potential to attract new customers and increase the bank’s retail activity. 16

Retail Banking (Bank only) - as of 11/2008 17

Net Earnings (NIS millions) Net ROE 15. 0% 8. 1% 6. 6% 7. 0% 4. 0% 18

Net Earnings (NIS millions) 13. 9% Net ROE 5. 8% 19

Adjusted* Net Earnings Net ROE (NIS millions) 13. 9 % 9. 3 % * Not including the effect of accounting distortions and non-recurring costs 20

Ratio of Provision for Doubtful Debts to Credit to the Public * In II/2008 and III/2008 excluding Massad 21

Ratio of Provision for Doubtful Debts to Earnings from Financing Operations * In II/2008 and III/2008 excluding Massad 22

Ratio of Provision for Doubtful Debts to Credit to the Public 30. 9. 2008 23

Ratio of Credit to the Public to Total Assets (%) 30. 9. 2008 4 other major banks FIBI 24

Total Credit Risk in Respect of Problematic Debts (NIS millions) * Securities, financial derivatives, non-utilization of credit lines 25

Total Assets (NIS Millions) 26

Credit to the Public (NIS Millions) 27

Deposits from the Public (NIS Millions) 28

Changes in Shareholders’ Equity (NIS millions) 29

Capital Adequacy Ratio (%) Capital Adequacy 11. 7% 11. 4% 10. 1% Second Tier Capital Ratio First Tier Capital Ratio 30

Capital Adequacy Ratio 30. 9. 2008 31

Operational and Other Expenses (NIS millions) *1844 *1022 *484 * *338 * Excluding Massad 32

Cost to Income Ratio - Consolidated * Not including the effect of accounting distortions and non-recurring income and wage costs 33

Composition of Foreign Proprietary Trading Book – Bank only 34

Adjustment to Fair value of Available for Sale Securities – Consolidated* 30. 06. 08 (63) NIS millions MBS – Mortgage Backed Securities (all) (21) NIS Millions 30. 09. 08 (148) NIS Millions Others (42) NIS Millions MBS – Mortgage Backed Securities (all) (43) NIS Millions Others (105) NIS Millions After balance sheet 31. 10. 08 (264) NIS millions MBS – Mortgage Backed Securities (all) (88) NIS Millions Others (176) NIS Millions * The influence on the Capital Account of the subsidiaries abroad, UBank, Otsar Hahayal and Massad is not substantial 35

Provisions in III/2008 (Bank only) due to permanent depreciation 99 NIS millions due to investment in 3 hedge funds in FIBI Suisse portfolio 0. 9 NIS Millions due to investment in 2 hedge funds 2. 7 NIS Millions Other securities 15 NIS Millions due to 3 ALT-A MBS 80 NIS Millions 36

Income by Segments *- Consolidated 30. 9. 2008 10. 8% As of 30. 9. 2007 3. 1% 18. 9% 28. 9% 13. 6% 27. 9% * Includes all segments except “other” 37

PAGI, in which FIBI has a 68% equity holding is a commercial bank with 20 branches, and 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 segment has grown significantly. PAGI’s strategy is to aggressively grow its client base, while focusing on target segments with intensive financial activity in personal, business, and institutional banking. PAGI invested heavily in modernizing its branch network, while maintaining the conservative demeanor that attracts devout Jews. 38

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UBANK FIBI acquired 100% of share capital of Investec Bank (Israel) Ltd. in December 2004. Investec Bank specialized primarily in capital markets, foreign currency, private banking and trusteeship. As of March 2005 the name of the bank was changed to UBANK. It is maintained as an independent subsidiary. 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. Four of these new branches have already been opened and more are scheduled for the coming years. 40

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Otsar Hahayal FIBI acquired 68% of the share capital of Otsar Hahayal in August, 2006. Bank Otsar Hahayal specializes in retail and small to medium-sized businesses (SMEs) and has a high proportion of current and former Defence 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 activity and earning base. FIBI is currently in the process of integrating Otsar Hahayal’s IT systems and coordinating across headquarters support functions. 42

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Massad FIBI acquired 51% of the share capital of Massad in May 2008. Massad, as a sectorial bank, specializes in teaching personnel as its client base. With Massad, FIBI has completed its acquisition of three Israeli banks and has now become a multi-bank group with a wider network in the retail market, thereby enjoying both the privileges of a large banking group, and the advantages of each subsidiary's special field of expertise. FIBI is currently in the process of integrating Massad’s IT System and coordinating across headquarters 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. . 44

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First International Bank of Israel Ltd — FIBI