Information and Reporing Unit, Banking Supervision Division					07/09/2003
Statement for the second quarter - bank
Arab Israel Bank Ltd., Main data, NIS million
Taken from the quarterly report to 30.06.2003. Adjusted to the CPI for  06.2003.
Summary consolidated balance sheet	30.06.2003	31.12.2002	Bank's share of the banking system
			30.06.2003	31.12.2002
Cash and deposits in banks	1,274	1,234	1.3%	1.3%
Securities	233	214	0.2%	0.2%
Credit to the public	1,389	1,401	0.2%	0.2%
Credit to the government	0	0	0.0%	0.0%
Investments in companies included on an equity basis	0	0	0.0%	0.0%
Buildings and equipment	21	25	0.2%	0.2%
Other assets	33	34	0.1%	0.2%
Total assets	2,950	2,907	0.4%	0.3%
Deposits of the public	2,565	2,565	0.4%	0.4%
Deposits of banks	9	9	0.0%	0.0%
Deposits of the government	0	0	0.0%	0.0%
Bonds and subordinated notes	0	0	0.0%	0.0%
Other liabilities	45	37	0.2%	0.2%
Total liabilities	2,619	2,612	0.3%	0.3%
Quasi-capital items	0	0	0.0%	0.0%
Equity	332	295	0.8%	0.7%
Summary consolidated profit and loss statement	six months to		Bank's share of the banking system		three months to
			six months to
	30.06.2003	30.06.2002	30.06.2003	30.06.2002	30.06.2003
Net interest profit before loan-loss provision	75.9	67.6	0.8%	0.9%	40.4
Loan-loss provision	5.1	4.9	0.2%	0.2%	2.2
Operating and other income	45.1	41.8	0.8%	0.8%	23.9
Of which: Operating income	40.5	40.4	0.9%	0.9%	20.0
Operating and other expenses	54.2	48.3	0.6%	0.6%	28.4
Of which: Salaries and related expenses	38.0	32.7	0.7%	0.6%	20.5
Ordinary before-tax provision	61.7	56.2	1.9%	3.0%	33.7
Provision for taxes on ordinary profit	28.6	28.7	1.6%	2.7%	14.5
Ordinary after-tax profit	33.1	27.5	2.2%	2.9%	19.2
Bank's share in the profit of subsidiaries	0.0	0.0			0.0
Share of minority shareholders in profit of consolidated companies
Extraordinary after-tax profit	-1.8	0.0			-1.8
Net profit	31.3	27.5	2.2%	3.0%	17.4
Profit after the effect of the difference between the known index and the "in lieu" index	30.4	31.4	2.2%	2.6%
Balances and rates of return on financial items by indexation base on 30.06.2003	Unindexed NIS	CPI-indexed  NIS	Foreign Currency (1)	Total financial items
Balance of financial assets on balance-sheet date	2,086	783	61	2,929
Balance of financial liabilities on balance-sheet date	2,005	570	44	2,619
Excess of financial assets over financial liabilities	80	213	17	311
Total indexation balance (incl.forwards and options in term of basis assets) 2	80	213	17	311
Rate of income on assets (percent) 3	11.62	5.14	-11.44	10.02
Rate of expenditure on liabilities (percent) 3	-7.59	-4.70	10.45	-6.94
Interest-rate differential	4.03	0.44	-0.99	3.08
Problem borrowers	30.06.2003	31.12.2002
Total credit risk dew to problem borrowers	136	100
Total credit  to problem borrowers	118	93
Main financial ratios - consolidated (percent)	30.06.2003	31.12.2002
Equity/balance-sheet ratio	11.24	10.15
Finanancial capital/equity ratio	93.70	91.70
Equity/risk-weighted-assets ratio	25.91	24.17
Return on equity (net profit/gross weighted-capital ratio)  4	22.30	21.10
Operating income/operating expenses ratio 5	83.21	83.43
1 Including foreign-currency indexed NIS.
2 Forwards transactions.
3 Six-month rate of income (expenses), on annual basis including hedging, embedded and ALM derivatives.
4 Annual basis.
5 For six months. Comparative data are annual.
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