
Information and Reporing Unit, Banking Supervision Division					14/12/2004
Statement for the second quarter - bank
Arab Israel Bank Ltd. , Main data, NIS million
Taken from the quarterly report to 30.06.2004, reported amounts at 30.06.2004 (2003 in adjusted amounts).

Summary balance sheet	30.06.2004	31.12.2003	Bank's share of the banking system
Summary balance sheet	30.06.2004	31.12.2003	30.06.2004	31.12.2003
Cash and deposits in banks (*)	1,055	1,230	0.8%	0.8%
Securities	209	235	0.2%	0.2%
Credit to the public	1,581	1,497	0.3%	0.3%
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	31	28	0.3%	0.3%
Other assets	32	33	0.2%	0.1%
Total assets	2,907	3,023	0.3%	0.4%
Deposits of the public	2,500	2,527	0.4%	0.4%
Deposits of banks (*)	23	133	0.0%	0.2%
Deposits of the government	0	0	0.0%	0.0%
Bonds and subordinated notes	0	0	0.0%	0.0%
Other liabilities	51	61	0.2%	0.2%
Total liabilities	2,574	2,720	0.3%	0.3%
Quasi-capital items	0	0	0.0%	0.0%
Minority shareholders' rights	0	0
Equity	333	302	0.7%	0.7%

Summary profit and loss statement	Six months to		Bank's share of the banking system		THREE MONTHS TO
	Six months to		Six months to		THREE MONTHS TO
	30.06.2004	30.06.2003	30.06.2004	30.06.2003	30.06.2004
Net interest profit before loan-loss provision	83.2	74.7	0.8%	0.8%	43.1
Loan-loss provision	3.8	5.0	0.2%	0.2%	2.6
Operating and other income	41.9	45.4	0.7%	0.8%	21.0
Of which: Operating income	40.2	40.8	0.8%	0.9%	20.1
Operating and other expenses	58.4	54.5	0.6%	0.6%	27.8
Of which: Salaries and related expenses	37.5	38.2	0.6%	0.7%	17.4
Ordinary before-tax provision	62.9	60.8	1.4%	1.9%	33.7
Provision for taxes on ordinary profit	29.8	28.2	1.5%	1.6%	16.2
Ordinary after-tax profit	33.1	32.6	1.4%	2.2%	17.5
Bank's share in the profit of subsidiaries	0.0	0.0			0.0
Share of minority shareholders in profit of consolidated companies	0.0	0.0			0.0
Extraordinary after-tax profit	0.0	-1.8			0.0
Net profit	33.1	30.8	1.2%	2.2%	17.5


Balances and rates of return on financial items by indexation base on 30.06.2004	Unindexed NIS	CPI-indexed NIS	Foreign Currency (1)	Total financial items
Balance of financial assets on balance-sheet date	2,085	737	55	2,877
Balance of financial liabilities on balance-sheet date	2,015	521	38	2,574
Excess of financial assets over financial liabilities	69	216	18	303
Total indexation balance (incl.forwards and options in term of basis assets) 2	69	216	18	303
Rate of income on assets (percent) 3	7.09	6.56	5.55	6.99
Rate of expenditure on liabilities (percent) 3	-3.74	-6.06	-4.46	-4.01
Interest-rate differential	3.35	0.50	1.09	2.99

Problem borrowers	30.06.2004	31.12.2003
Total credit risk dew to problem borrowers	196	137
Total credit to problem borrowers	181	129

Main financial ratios - percent	30.06.2004	31.12.2003
Equity/balance-sheet ratio	11.46	10.00
Finanancial capital/equity ratio	90.82	90.64
Equity/risk-weighted-assets ratio	25.30	23.11
Return on equity (net profit/gross weighted-capital ratio) 4	23.10	22.20
Operating income/operating expenses ratio 5	71.75	77.82

^{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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^{(*) See note no. 5.1.4 in the introduction.}