Overview 30 09 2010 GDP Rate of Growth

Overview 30/09/2010

GDP Rate of Growth(%) * Forecast 2

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

Country Ratings MOODY’S FITCH S&P Long Term A 1 A A Short Term P 1 F 1 A 1 Stable Outlook 4

Foreign Investments in Israel (US$ Millions) In 2006: Acquisition of “Iscar” by Berkshire - Hathaway 5 Israeli Investments Abroad (US$ Millions) In 2006: Acquisition by “Teva”

Financial Reports 30/09/2010

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. 33 E + V – 20. 02 E – 73. 79 V – 73. 33 E – 100 V – 100 E - 75 V - 75 The First Int’l & Co. Underwriting and Investments Ltd. 7 7 E - % Share in Equity V - % Voting Rights Israel Discount Bank E - 51 V - 51 E - 100 V - 100 Modus-Selective Investments Management & Advice Ltd. 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.

First International Bank Group First International Bank - Corporate + middle market banking - Private + affluent banking - Capital & Money Markets - 79 branches Retail Bank Cluster - Retail - Branches: 18 - Since 2008 - Key Audience: Teachers 8 8 - Capital Markets, Trust & Custody - Private + affluent banking - 7 branches - Since 2004 - Retail /Commercial - Branches: 47 - Since 2006 - Key Audience: Military Personnel - Retail/Commercial - Branches: 19 - Since 1977 - Key Audience: Ultra Orthodox International - Business / Corporate Banking - Since 1982 - Private Banking - Since 1984

Shareholders The Liberman family 9 9 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 42. 6% 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. The controlling interest in FIBI and in the Bank is held by the Bino Family (Mr. Zadik Bino and his three children). 10 10

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), security sector - retail banking (Otsar Hahayal), ultraorthodox Jews (PAGI), and teachers (Massad) Foreign subsidiaries in London (commercial banking) and Zurich (private banking) Branches: 170 in Israel (including subsidiaries) Equity: NIS 5, 671 Million (USD 1, 547 Million*) 5 th largest banking group in Israel * $/NIS = 3. 665 as of Sep. 29, 2010 11

Bank Ratings Moody’s Bank Deposits (Long Term) A 2 Bank Deposits (Short Term) P-1 Financial Strength Midrug – Israel C- Outlook Midrug Negative Ma’a lot - S&P Issuer Subordinated Notes 12 AA / Stable AA - / Stable As from 15/11/2010 Aa 1

Strategy - Main Focus Risk Profile Conservative capitalization levels: capital adequacy ratio of 12. 78%; 1 st tier adequacy ratio of 8. 31%; deposit/credit ratio of 126. 8% Improved credit mix: steps taken to diversify portfolio through increased penetration of middle market and more consumer credit Conservatively managed foreign proprietary trading book Upgraded scoring model and processes in anticipation of Basel II, including development of advanced credit-scoring models for risk-based pricing 13 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

Strategy - Main Focus Client-centric vs. product-oriented banking Corporate finance: decrease concentration of credit portfolio, increase penetration of middle market Private banking: increase market and wallet share through advisory services extend presence in affluent and mass-affluent segments Retail banking: broaden overall footprint 14 New Products State-of-the-art pension-planning advice offering Other Measures taken to increase group efficiency, including implementation of a sharedservices model

Group Consolidation Objective: to realize synergies from three bank acquisitions Implement shared-services model, including IT systems (UBank IT systems converted in 2008, Massad and Otsar-Hahayal converted on 2010; HQ units unified: logistics, severance pay fund operations, regulatory units and parts of training and human resources operations; process to be accelerated in 2010) Cross-sell products (mortgages, structured products, advisory services, pension planning, trust, factoring) Create streamlined and effective branch network to meet growing competition in retail and private banking markets Oversee management: FIBI executive board members serve on the boards of the new subsidiaries 15

Net Operating Earnings and ROE NIS Millions Quarterly 11. 5% 8. 6% 5. 6% 16

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

Total Credit Risk in Respect of Problematic Debts (NIS millions( 30/09/10 31/12/09 31/12/08 31/12/07 31/12/06 Change 30/09/10 Compared with 31/12/09 Non income bearing debts 609 643 713 662 815 (34) Restructured debts 66 215 324 281 236 (149) Debts scheduled for restructuring 39 26 3 - 348 13 Debts temporarily in arrears 103 610 153 172 224 (3) 547, 1 928, 1 2, 430 1, 696 2, 349 (381) Off-balance sheet credit risk 359 346 454 269 291 13 Total credit risk in respect of problematic debts 2, 723 2643, 684, 0 3, 080 4, 263 (541) Balance for date Debts subject to special supervision 18

Composition of Total Proprietary Trading Book – 30. 09. 2010 Foreign Currency Proprietary Trading Book Amount NIS Million Composition Government & Secured by Government bonds 10, 023 66% Commercial Banks bonds 2, 912 19% 842 5% Other 1, 482 10% Total 15, 259 100% Shares 19 Total Proprietary Trading Book

Operating & Other Expenses (Group) (NIS Millions( 1 -9 / 2009 20 1 -9 / 2010

Operating Income and Expenses Operating Income Operating Expenses & Income 62. 4% 21 52. 7% % Cost / Income Ratio % Adjusted Cost / Income Ratio Adjusted * Operating Expenses & Income 52. 9% 52. 7% • Financing Income excluding provisions for decline in value, clarification 8 position and fair value of derivative instruments, operating income excluding dividend, realization or decline in value of shares and severance pay fund gains; expenses excluding severance pay fund effects and special provisions

Capital Adequacy Ratio – Basel II Core capital FIBI Overall capital * * Core Capital Adequacy 22 ** 14. 30% Capital Adequacy 4 top Banks 14. 57% 13. 42% * * ** * After adjustment **Without adjustment

Changes in Assets, Deposits & Credit to the Public (NIS Billions ( Assets 23 Shareholders equity Credit to the public Deposits from the public

Financial Strength Ratios as of 30/09/2010 Capital adequacy ratio Core capital adequacy ratio Deposit / credit ratio Problematic debt / credit ratio Doubtful debts / credit ratio FIBI 8. 31% 126. 8% 4. 4% 0. 16% POALIM 13. 92% 8. 07% 98. 6% 7. 3% 0. 56% LEUMI – 30/06/2010 14. 78% 8. 52% 118. 5% 8. 8% 0. 31% DISCOUNT – 30/06/2010 12. 49% 7. 73% 127. 2% 7. 1% 0. 65% MIZRAHI TEFAHOT 24 12. 78% 14. 04% 7. 95% 97. 8% 5. 1% 0. 36%

Capital Adequacy – Bazel II 12. 78% Core capital – Bazel II 8. 31% Deposits from the Public Credit to the Public 61. 8 NIS Billion 78. 4 NIS Billion Deposits / Credit Ratio 126. 8% Bonds-State of Israel: 8. 4 NIS Billion Liquid Assets 31. 7% Gov. & Bank Deposits 1. 8 NIS Billion Cash/Deposits-Bank of Israel: 11. 7 NIS Billion Bonds-Foreign states: 1. 6 NIS Billion Deposits in Banks: 3. 1 NIS Billion Capital Investments 65. 2% Of capital available for Investments 25 Capital Notes 4. 6 NIS Billion Capital available for Investments 3. 7 NIS Billion Bonds-Banks: 2. 9 NIS Billion NIS+Forex Corporate Bonds: 1. 5 NIS Billion Structure Products, Hedge Funds & Stocks: 0. 9 NIS Billion Credit Risks in VAR Terms: (0. 07) NIS Billion

Changes in Net Profit - Subsidiaries (NIS Millions) 1 -9 / 2010 Change 24. 7 21. 9 2. 8 38. 0 55. 8 (17. 8) 28. 9 54. 9 (26. 0) 25. 7 26 1 -9 / 2009 24. 2 1. 5

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 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

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