2006 Half Year Results

September 2006

EIIB – A Brief History

• Jan 2005 Company established

• Q2 2005 Private placement raised approximately £108 million (net) • Mar 2006 FSA authorisation received

• Apr 2006 Commenced trading • May 2006 AIM IPO raised approximately £72.8 million (net)

• Sept 2006 Moved to AIM 100 Index

First Islamic investment bank licensed by the FSA

Highlights

• Revenues have increased to £3,019,424 (2005:£1,062,973)

• Operating profits of £184,359 (2005: £547,730)

• Total capital now £184m – better capitalised than most Islamic Banks

• Key business heads and teams in place. Roll-out remains on track versus IPO timetable

• Treasury & Capital Markets; Asset Management; Trade Finance business lines set up and developing traction – asset acquisition, structuring capability

• Operating Infrastructure and banking platform is in place.

• Developing traction with Shareholders, client, market counterparties

• Deal pipeline developing

Nearing successful completion of “Start-up” phase

Strategy and Business

• Become a major participant in Islamic financial markets

• Roll-out a broadly-based business model with a wide product range:– Treasury and Capital Markets (incl Structured Trade Finance)– Asset Management, including Private Banking– Corporate Finance and advisory

• Target investment banking clients across Europe, Middle East and Asia

• Develop and grow liquidity within the Islamic Capital Markets

• Innovate and distribute new structures and asset classes

• Leverage UK presence to develop partnerships with other Islamic and European Institutions for:

– Transaction origination– White-labelling Sharia’a products

We believe our model is differentiated from other Islamic banks.

Delivering the Business Plan

On track2007Creating Sharia’a compliant pension fund products

April ’06Accepting Private banking deposits

2006Establishing documentary credit facilities, Islamic Money Marketlines

On track2007Originating, underwriting and distributing Islamic securities and trading them in primary market

2006Originating, underwriting and distributing Islamic securities and trading them in secondary market

April ‘06Deploying excess liquidity via Wakala, Murabaha transactions

April ’06Funding of assets using capital, deposits

April ‘06Accept Sharia’a compliant wholesale deposits from Islamic banks, conventional banks, etc

StatusPlanned Date

On track2007Creating Sharia’a compliant pension fund products

April ’06Accepting Private banking deposits

2006Establishing documentary credit facilities, Islamic Money Marketlines

On track2007Originating, underwriting and distributing Islamic securities and trading them in primary market

2006Originating, underwriting and distributing Islamic securities and trading them in secondary market

April ‘06Deploying excess liquidity via Wakala, Murabaha transactions

April ’06Funding of assets using capital, deposits

April ‘06Accept Sharia’a compliant wholesale deposits from Islamic banks, conventional banks, etc

StatusPlanned Date

Treasury and Capital Markets

• Danie Marx appointed head of Treasury and Capital Markets in January 2006

• Team of 6 hired offering treasury, risk management, debt capital market (vanilla and structured) and structured trade finance solutions

• Capabilities now include - Foreign exchange, profit rate hedging, money markets, term financing, securities origination, underwriting, structuring, distribution and sales, and asset securitisation – developing derivatives capabilities

• Since April 2006 committed to 2 primary market Sukuks and 3 secondary market Sukuks including 1st Islamic Mortgage Securitisation

• 1st Islamic Investment bank to quote 2 way prices in selected Sukuks in London

• Structured Trade Finance – 14 transactions evaluated, 3 completed

• Developed strong Sharia'a structuring skill set

Business well positioned to meet goals and grow

Asset Management

• Jeremy Beswick appointed Head of Asset Management May 2006

• Developing 3 EIIB products:– Real Estate Fund – by end of 2006– Structured Product Fund – end 2006– Absolute Return Fund – 1st Quarter 2007

• Evaluating a number of 3rd party wealth management products– One of late 2006, another 2007

• Evaluated and finalised EIIB Private Banking model for High net worth individuals & Family offices

– Launch end 2006

• Evaluating two possible Asset Management acquisitions

Key Strengths

• EIIB is the only UK quoted financial institution offering exclusively Sharia’a compliant investment banking products and services

• Well capitalised to drive the business model

• Based in London, with direct access to extensive deal flow and deep pool of human resources talent

• Experienced Board and management team

• A diverse and well-respected shareholder base that will be a critical driver of success

• Structuring capability and quality of staff

• Best Practice in all areas of Corporate Governance

Half-Year Results Financial Highlights

• Interim results prepared under IFRS

• Small profit in 4 month since authorisation to 30 June against an anticipated loss in business plan

• Expenses remain below plan – operating expenses remain well managed and recruitment plan is staggered to stay in line with business growth.

• Expenses also reflect costs of implementing banking platform that is being tailored to EIIB requirements. Development expenses of £446k have been capitalised in the 1H06

Income Statement H1 06 FY 05 H1 05£000 £000 £000

Total income 3,019 3,841 1,063Operating expenses (2,835) (2,001) (515)Profit before tax 184 1,840 548Taxation (108) (534) (165)Profit after tax 76 1,306 383

EPS - 0.11p 0.06p

…have generated a small profit in first three months since authorisation

Half-Year Results Financial Highlights

• Capital being used as Tier 1 Capital to support operations and to invest in proprietary transactions

• Continued focus on building inter-bank relationship and lines. Bank has taken first customer deposits after close of 1H06

• Seeking credit rating in 2H06 and believe that when in place this will further facilitate development of funding lines

• Balance sheet profile is beginning to see a shift from purely inter-bank to higher yielding assets.

Balance Sheet H1 06 FY 05 H1 05£000 £000 £000

Interbank & Cash 170,867 111,651 109,956Customer Loans 5,419Investment Securities 7,498Fixed assets 1,038 433 6Other assets 911 327 172

185,733 112,411 110,134

Liabilities 1,533 1,255 10

Capital 184,200 111,156 110,124

Risk Profile

Internal Risk Rating Industry/Sector

Asset ClassesGeographic Breakdown

IRR91%

IRR101% IRR13

3% IRR143%IRR8

4%IRR715%

IRR63%

IRR361%

Construction2%

Manufacturing

2% Textile1%

GCC Banks 28%

EU/Other Banks 67%

Europe 61%Bahrain 21%

UAE 9%

Turkey 1%Saudi 2%

UK 6%

Average Risk Rating: A- equivalent

6-12m 12%

> 12m4%

3-6m 14%

1-3m 30%

<1m 40%

Current Trading and Prospects

• Market environment and opportunity remain highly positive

• Focus is on building sustainable fee income from an Investment Banking and Asset Management business

• Establishing office in Bahrain with a top-tier team to originate and distribute transactions in Gulf is a priority

• Develop product offerings that are innovative and offer our investors the opportunity to build a diversified portfolio

• Continue to source and recruit quality staff required to grow the business

• Launch 3 products and complete 2 deals by year end

• Obtain rating and complete listings

• EIIB continues to have 1st Mover advantage allowing it to develop brand presence and leverage its competitive niche

On track to meet market expectations

Appendices

Appendix 1 : Organisational Structure

Board of Directors

Nomination Committee Audit CommitteeBoard Executive

CommitteeRemuneration

Committee

ManagingDirector

Finance Director andCOO

Head of Sharia'a Compliance &

LegalHead of Risk

Head of Bahrain Office

Head of TreasuryAnd Capital Mkts

Head of Internal Audit

Head of IT

Head of Administration

Financial Controller

Head of Operations

Head of AssetManagement

Head of HR

Sharia’a SupervisoryBoard

Teams are in place, charters of committees ensure oversight and independence

Appendix 2: Board of Directors

• Adnan Ahmed Yousif, Non-Executive Director and Chairman, is also CEO and Board Member of AlBaraka Banking Group.

• Khalid Abdulla Al-Bassam, Non-Executive Director, Deputy Chairman and Chairman of the Nomination Committee , is Chairman of Al Bassam Investment Co., and Chairman, Bahrain Islamic Bank and prior to this, Deputy Governor of Bahrain Monetary Agency.

• John Weguelin, Executive Director and Managing Director, has over 30 years banking experience, was Managing Director of Bank of America Securities Limited in London and COO and Chief Administration Officer of Bank of America NA for Europe, Middle East and Africa

• Atif Raza, Executive Director and Chief Operating Officer and Finance Director, was previously with Unicorn Investment Bank in Bahrain, where he was the Chief Financial Officer. Prior to that he was CFO for Citicards UK, a Citigroup entity and SAMBA.

• George Morton, Senior Non-Executive Director, was previously Senior Vice President and Head of International Division at Arab Banking Corporation (BSC), Bahrain

Appendix 2: Board of Director cont/…

• Shabir Ahmed Randeree, Non-Executive Director and Chairman of the Remuneration Committee , is also Managing Director of DCD London & Mutual PLC and a Non-Executive Director of Islamic Bank of Britain Plc.

• Hatem Abou Said, Non-Executive Director, is also a member of the Board of Directors of the Italo-Arab Chamber of Commerce. His international, investment and commercial banking experience spans more than 40 years and was awarded the honorary title of Cavaliere al Merito della Repubblica Italiana (Knight of the Order of Merit of the Italian Republic) by the President of Italy, in recognition of his service to the national economy.

• Yusef Abu Khadra, Non-Executive Directors, was previously a member of the Management Committee of Investcorp Bank E.C. in Bahrain and latterly an Executive Director of Investcorp Securities in London

• John Clouting, Non- Executive Director and Chairman of the Board Executive Committee , and is also a non-executive Director of Turkish Bank (UK) Limited. He was General Manager of Jordan International Bank Plc and General Manager of Turkish Bank (UK)

• Salman A Abbasi, Non-Executive Director, was General Manager of Investcorp Bahrain until 2004. Prior to that, he was Vice President & CEO responsible for all Chase Manhattan Bank NA’s business in Africa and the Middle East

• Aabed Alzeera, Non-Executive Director, is a prominent Bahraini banker and Chief Executive Officer of International Investment Bank (IIB). Previously Aabed held senior positions with American Express Banking Corporation and Arab Banking Corporation (ABC)

Appendix 3: Sharia’a Supervisory Board

• Justice (rtd.) Muhammad Taqi Usmani, Chairman was a member of the Sharia’a Cassation Board at the Supreme Court of Pakistan from 1982-2002. He has also been Chairman of the Sharia’a Board of Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and a former Chairman of the Sharia’a Board of Islamic Bank of Britain Plc and sits on a number of Sharia’a boards of other institutions.

• Dr Abdul Sattar Abu Ghuddah has taught at various institutes, including the Imam Al Da’awa Institute in Riyadh and the Sharia’a College and Law faculty in Kuwait University. He is Secretary General of the Unified Sharia’a Supervisory Board of Dallah Albaraka Group in Jeddah and a member of the Sharia’a board of AAOIFI.

• Dr Abdul Latif Mahmood Al Mahmood has been Head of Arabic Language and Islamic Studies Department at the University of Bahrain from September 2001 to September 2005 and Assistant Professor for Islamic Studies since 1985. He is a member of the Board of Trustees of the International Union for Muslim Scholars. He is head of a number of Sharia’a boards including the Bahrain Islamic Bank (BSC) and Lebanon Islamic Bank.

• Sheikh Nizam Muhammad Seleh Yacouby is a member of a number of Sharia’a Supervisory Boards, including the Dow Jones Islamic Index, Bahrain Islamic Bank and Citi Islamic Investment Bank. He is also a member of the Sharia’a board of AAOIFI, a member of the Sharia’a Board of Islamic Bank of Britain Plc and has been a visiting lecturer at Harvard

Appendix 4: Management Team

• John Weguelin, Managing Director. John has over 30 years’ banking experience. Until 2003, he was Managing Director of Bank of America Securities Limited in London, and Chief Operating Officer and Chief Administration Officer of Bank of America NA for Europe, Middle East and Africa

• Atif Raza, Finance Director and Chief Operating Officer. Atif is a UK qualified chartered accountant with over 20 years experience in public accounting and senior leadership positions in chief financial officer roles in international financial institutions in the UK and Middle East. Atif was previously with Unicorn Investment bank in Bahrain, where he was the Chief Financial Officer. Prior to that he was CFO for Citicards UK, a Citigroup entity and CFO for Saudi American Bank (SAMBA) in Saudi Arabia. He was a director of UIB Capital Sdn. Bhd., Malaysia until November 2005.

• Mohaimin Chowdhury, Head of Legal, Sharia’a and Compliance and Company Secretary. Mohaimin is a solicitor qualified in England and Wales and joined EIIB in June 2005 from Dubai Islamic Bank where he was Legal Advisor. Prior to that, he was Legal Advisor in the Legal and Sharia’a Compliance Department of Abu Dhabi Islamic Bank from October 2000 to July 2004. Mohaimin started his legal career in private practice in London where he worked for 4 years after qualification.

• Danie Marx, Head of Treasury and Capital Markets. Prior to joining EIIB he was Treasurer and Head of Capital Markets at Absa Bank Limited’s London branch. Until 2000 he was tasked with structured solutioning at Absa’s Head Office in Johannesburg, South Africa. Before that, Danie was at Standard Bank of South Africa

• Jeremy Beswick, Head of Asset Management. Jeremy joined EIIB from RMB MultiManagers, which is the London-based international investment management arm of FirstRand Group. Before this, Jeremy spent seven years with US mutual fund company MFS. He established and launched its operations in Europe, and was Managing Director (Europe). From 1999 to 2002, he was seconded to MFS’s owner Sun Life of Canada, to become CEO of India’s second-largest mutual fund company, Birla Sun Life AMC.

• Grant Lowe, Head of Risk Management. Prior to joining EIIB Grant consulted at the Bank Supervision Department of the South African Reserve Bank, specialising in counterparty and position risk management. Before joining the Central Bank, Grant was the Head of Risk at Citibank Johannesburg Branch, and prior to that he was a Senior Credit Officer with Bank of America London Branch and Standard Bank London Plc.

• Tara McCabe, Head of HR. Tara has approximately 10 years experience in Human Resources, and joins EIIB from the General Council of the Bar, England & Wales where she was the Human Resources Manager. Prior to this Tara worked as an HR contractor for 5 years in various start-up and restructure projects in telecommunications, PPI’s, Investment Banking and Asset Management.

Appendix 4: Management Team Cont/…

Appendix 5: Market Opportunity

• Significant growth in Islamic banking– 1.4bn Muslims – 24% of world population– 88.5% Muslims (incl Turkey) – 20% EU population– Global assets estimated at approximately $700bn– Deposits of approx $200bn– Global Sukuk market + $41bn– $82bn outstanding in Commodity Murabaha– $3bn pd: traded in London

• Total of HNW wealth in ME - £1.3 trillion, 70% GCC

• Increased demand for Sharia’a compliant investment products

• Significant opportunity to bring higher-yielding Islamically structured assets to the EU market place

Islamic Finance market continues to record robust growth.

Appendix 6: Market Environment

• Macro-economic environment in ME remains very positive with oil prices at record levels generating surplus liquidity in region: 74% growth in the last 3 years

• Strong investor appetite for European and OECD assets supports EIIB’s positioning to intermediate EU Capital markets and ME liquidity

• Six GCC countries estimated to generate over $220bn surplus in ’06 and ’07

• GCC economies will remain in surplus based on current spending plans, even if oil prices fall to $40

• Non energy sector is growing faster – 8% in 2006 - than the Oil & Gas sector

• GCC countries are expected to accumulate foreign assets almost as rapidly as China will add to its FX reserves

• Bulk of capital flows are expected to be used to finance portfolio investment.

• Estimated in excess of $1,000bn of infrastructure investment over next 5-10 years

Appendix 7: Islamic Finance developments

• Islamic banking heading for 20% of total banking assets – growing at 10-15% pa

• GCC banks continue to report solid performance

• Most major Islamic banks investing resources directed at becoming regional players. Smaller banks looking to expand footprint and size through overseas expansion

• Malaysian Islamic banking deposits reached £10.7bn while Islamic banking is now 12% of total system. 44% of bonds being issued are Islamically structured