Overview

30/09/2010

2

GDP Rate of Growth (%)

*Forecast

3

*Bank of Israel Interest rate for the last month of the Year / Period

Bank of Israel Interest Rate

Bank of Israel Interest Rate *and the Rate of Inflation

Rate of Inflation

**Forecast

4

Country Ratings

MOODY’SFITCHS & P

Long TermA1AA

Short TermP1F1A1

OutlookStableStableStable

5

Foreign Investments in Israel (US$ Millions)

In 2006: Acquisition by “Teva”

Israeli Investments Abroad (US$ Millions)

In 2006: Acquisition of “Iscar” by Berkshire - Hathaway

11,873

4,434

23,866

10,429

6,281

2006 2007 2008 2009 H1 10

9,1797,933

22,961

12,446

8,808

2006 2007 2008 2009 H1 10

Financial Reports30/09/2010

Ownership Structure

Bino/Liberman Group

The Public FIBI Holding Company Ltd. FIBI Investment House Ltd.

Israel Discount Bank

The First Int’l & Co. Underwriting and Investments Ltd.

Modus-Selective Investments Management

& Advice Ltd.

International Leasing Ltd.

Israel Credit Cards Ltd.

First International Issues Ltd.

E - 79.06, V - 79.06E - 20.94, V - 20.94 E - 0, V – 0 (stocks dormant)

E + V - 53.33

E + V – 20.02

E + V - 26.45

E – 73.79V – 73.33

E – 100V – 100

E - 51V - 51

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 28.2V - 21

E - 100V - 100

E - 75V - 75

E - % Share in EquityV - % Voting Rights7

- Retail /Commercial- Branches: 47- Since 2006- Key Audience:

Military Personnel

- Retail- Branches: 18- Since 2008- Key Audience:

Teachers

First International Bank Group

First International Bank

- Corporate + middle market banking- Private + affluent banking- Capital & Money Markets- 79 branches

Retail BankCluster

International- Capital Markets,

Trust & Custody- Private + affluent banking- 7 branches- Since 2004

- Private Banking- Since 1984

- Business / Corporate Banking- Since 1982

- Retail/Commercial- Branches: 19- Since 1977- Key Audience:

Ultra Orthodox

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Shareholders

TheLiberman family

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.

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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).

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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), ultra-orthodox 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*)

5th largest banking group in Israel

* $/NIS = 3.665 as of Sep. 29, 2010

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Bank Ratings

Moody’s

Bank Deposits (Long Term)A 2

Bank Deposits (Short Term)P-1

Financial StrengthC-

OutlookNegative

Midrug – Israel

MidrugAa1

Ma’a lot - S&P

IssuerAA / Stable

Subordinated NotesAA - / Stable

As from 15/11/2010

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Core Capabilities

Strategy - Main Focus

Conservative capitalization levels: capital adequacy ratio of 12.78%; 1st 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

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

Risk Profile

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New ProductsClients

Strategy - Main Focus

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

Measures taken to increase group efficiency, including implementation of a shared-services model

State-of-the-art pension-planning advice offering

Other

Client-centric vs. product-oriented banking

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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

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Net Operating Earnings and ROENIS Millions

Quarterly

5.6%

8.6%11.5%

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Ratio of Provision for Doubtful Debts to Credit to the Public

Other 4 Leading Banks FIBI

0.27%

1.75%

1.34%

0.99%

0.63%

0.46%0.53% 0.53%

0.39%

0.19%0.15%0.13%

0.32%

0.37%0.33%

0.42%

0.91%

0.62% 0.37%

0.89%0.76%

0.38%

0.57%

0.82%0.74%

0.64%

0.28%

0.85% 0.72%0.92%

1.10%

1.28%

2000 2001 2002 2003 2004 2005 2006 2007 2008 I/09 II/09 III/09 IV/09 I/10 II/10 III/10

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Total Credit Risk in Respect ofProblematic Debts (NIS millions)

Balance for dateChange30/09/10

Compared with

31/12/0930/09/1031/12/0931/12/0831/12/0731/12/06

Non income bearing debts609643713662815)34(

Restructured debts66215324281236)149(

Debts scheduled for restructuring39263-34813

Debts temporarily in arrears103106153172224)3(

Debts subject to special supervision

1,5471,9282,4301,6962,349)381(

Off-balance sheet credit risk35934644526929113

Total credit risk in respect of problematic debts

2,7233,2644,0683,0804,263)541(

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Commercial Banks bonds

41%

Other 17%

MBS (PRIME+ALTA)

3%Government

bonds & Secured by

Government bonds 40%

Composition of Total Proprietary Trading Book – 30.09.2010

Government bonds &

Secured by Government

bonds 66%

Shares 5%

Others 10%

Commercial Banks bonds

19%

AmountNIS MillionComposition

Government & Secured by Government bonds10,02366%

Commercial Banks bonds2,91219%

Shares8425%

Other1,48210%

Total15,259100%

Foreign Currency Proprietary Trading Book Total Proprietary Trading Book

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Operating & Other Expenses (Group)(NIS Millions)

1,986

1,047

408531

2,080

1,162

414504

Total Operating Expenses Salaries & RelatedExpenses

Maintenance, Depreciation,Premises & Equipment

Other Expenses

1-9 / 2009 1-9 / 2010

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1-9/2009 1-9/2010

Operating Expenses & Income Adjusted * Operating Expenses & Income

• 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

1-9/2009 1-9/2010

52.7%62.4% 52.7%52.9%

Operating Income and Expenses

% %Operating Expenses Operating Income Income / Cost Ratio Adjusted Income / Cost Ratio

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14.30%14.57%

13.42%

Capital Adequacy Ratio – Basel II

Overall capital

Capital Adequacy

Core Capital Adequacy

FIBICore capital 4 top Banks

*

*

*After adjustment **Without adjustment

9.21%

8.31% 8.31%

13.88%

12.87% 12.78%

14.09%

13.57%

13.83%

8.21% 8.10%8.07%

31.12.09 30.6.10 30.9.10

*

***

**

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

Credit to the public

Deposits from the public

Shareholders equity

Assets

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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

FIBI12.78%8.31%126.8%4.4%0.16%

POALIM13.92%8.07%98.6%7.3%0.56%

LEUMI15.25%8.52%113.2%8.1%0.23%

DISCOUNT12.90%7.37%115.7%6.6%0.61%

MIZRAHI TEFAHOT14.04%7.95%97.8%5.1%0.36%

AVERAGE 14.09%8.10%108.1%6.9%0.41%

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Deposits from the Public78.4 NIS Billion

Deposits / Credit Ratio

Liquid Assets

Capital Adequacy – Bazel II

Core capital – Bazel II

Capital Investments

Credit tothe Public61.8 NIS Billion

Gov. & Bank Deposits1.8 NIS Billion

8.31%

126.8%

31.7%

65.2%Of capital available for Investments

Bonds-State of Israel: 8.4 NIS Billion

Cash/Deposits-Bank of Israel:11.7 NIS Billion

Bonds-Foreign states: 1.6 NIS BillionDeposits in Banks: 3.1 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

Capital Notes4.6 NIS Billion

Capital available for Investments3.7 NIS Billion

12.78%

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Changes in Net Profit - Subsidiaries (NIS Millions)

1-9 / 20101-9 / 2009Change

24.721.92.8

38.055.8(17.8)

28.954.9(26.0)

25.724.21.5

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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.

Banking Subsidiaries in Israel

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.

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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.

Banking Subsidiaries in Israel

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.

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