Information and Reporing Unit, Banking Supervision Division					02/12/2003
Statement for the third quarter - bank
Arab Israel Bank Ltd., Main data, NIS million
Taken from the quarterly report to 30.09.2003. Adjusted to the CPI for  09.2003.
Summary  balance sheet	30.09.2003	31.12.2002	Bank's share of the banking system
			30.09.2003	31.12.2002
Cash and deposits in banks	1,239	1,221	1.3%	1.3%
Securities	219	212	0.2%	0.2%
Credit to the public	1,437	1,388	0.3%	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	24	0.2%	0.2%
Other assets	32	33	0.1%	0.2%
Total assets	2,947	2,878	0.4%	0.3%
Deposits of the public	2,543	2,540	0.4%	0.4%
Deposits of banks	8	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	48	37	0.2%	0.2%
Total liabilities	2,599	2,586	0.3%	0.3%
Quasi-capital items	0	0	0.0%	0.0%
Equity	347	292	0.8%	0.7%
Summary  profit and loss statement	nine months to		Bank's share of the banking system		three months to
			nine months to
	30.09.2003	30.09.2002	30.09.2003	30.09.2002	30.09.2003
Net interest profit before loan-loss provision	116.9	106.0	0.8%	0.8%	41.8
Loan-loss provision	6.2	7.4	0.1%	0.2%	1.2
Operating and other income	65.1	63.0	0.8%	0.8%	20.4
Of which: Operating income	59.6	61.1	0.9%	0.9%	19.5
Operating and other expenses	79.4	73.2	0.6%	0.6%	25.7
Of which: Salaries and related expenses	55.0	47.9	0.7%	0.6%	17.4
Ordinary  profit before-tax provision	96.4	88.4	2.0%	2.8%	35.3
Provision for taxes on ordinary profit	44.5	42.4	1.9%	2.6%	16.2
Ordinary profit after-tax	51.9	46.0	2.1%	2.8%	19.1
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			0.0
Net profit	50.1	46.0	2.1%	3.2%	19.1
Profit after the effect of the difference between the known index and the "in lieu" index	49.4	47.3	2.1%	3.1%
Balances and rates of return on financial items by indexation base on 30.09.2003	Unindexed NIS	CPI-indexed  NIS	Foreign Currency (1)	Total financial items
Balance of financial assets on balance-sheet date	2,117	746	62	2,926
Balance of financial liabilities on balance-sheet date	2,028	527	45	2,599
Excess of financial assets over financial liabilities	90	219	18	327
Total indexation balance (incl.forwards and options in term of basis assets)	90	219	18	327
Rate of income on assets (percent) 2	12.16	5.08	-1.44	10.70
Rate of expenditure on liabilities (percent) 2	-8.53	-4.70	1.31	-7.88
Interest-rate differential	3.63	0.38	-0.13	2.82
Problem borrowers	30.09.2003	31.12.2002
Total credit risk dew to problem borrowers	114	99
Total credit  to problem borrowers	105	92
Main financial ratios - consolidated (percent)	30.09.2003	31.12.2002
Equity/balance-sheet ratio	11.79	10.16
Finanancial capital/equity ratio	94.10	91.72
Equity/risk-weighted-assets ratio	26.19	24.17
Return on equity (net profit/gross weighted-capital ratio)  3	23.50	21.10
Operating income/operating expenses ratio 4	81.99	83.45
1 Including foreign-currency indexed NIS.
2 Nine-month rate of income (expenses), on annual basis including hedging, embedded and ALM derivatives.
3 Annual basis.
4 For nine months. Comparative data are annual.
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