March 29, 2006
Shamil Bank’s 2005 Accounts Ratified at AGM

Shamil Bank’s Annual General Meeting was held yesterday at the Regency Intercontinental Hotel in Manama. The meeting was chaired by Mr. Khalid Abdulla-Janahi, Member of the Board of Directors and Chairman Executive Committee. Mr. Janahi was accompanied by Mr. Ziad Hasan Rawashdeh, Member of the Board of Directors and Member Executive Committee and Mr. Mohamed Hussain, Chief Executive, Shamil Bank. The meeting was attended by a large number of Shareholders.

Shamil Bank recently announced its financial results for the year 2005 registering a net income of US$ 39.1 million, an increase of 34 per cent compared to the US$ 29.1 million posted in the previous year.

“I am delighted to announce that 2005 was a year of excellent operational and organizational achievements for Shamil Bank on all grounds. Our core operating activities all contributed to the Bank’s record of strong financial performance while continuing to expand and enhance our products and services. At the same time, the numerous initiatives implemented by our support functions during the year resulted in Shamil Bank becoming a more professional and efficient Islamic financial institution” said Mr. Mohamed Hussain, Shamil Bank’s Chief Executive.

“Throughout the year, we continued to set new standards for Islamic banking, introducing further innovative Sharia’a-compliant products and services for retail, corporate and investment banking clients, and enhancing our range of delivery channels. We also strengthened our institutional capability by continuing to develop the skills and potential of our people, and improving our information and communications technology infrastructure.” Mr. Hussain said.

Shamil Bank achieved record financial results in 2005. Net consolidated income rose sharply by 34 per cent to US$ 39.1 million, compared to US$ 29.1 in 2004. This includes a one-off contribution of US$ 1 million from the sale of the Bank’s branch in Bangladesh during the year. The net income for the year also includes the result of the wholly-owned subsidiary Shamil Finance (Luxembourg) S.A., which holds a 51 per cent interest in Faisal Finance (Switzerland) S.A.

Total operating income rose by 18 per cent in 2005, generated mainly by higher fee income from funds under management, and fees from structuring and arranging transactions, as well as increased income from financing activities. Operating income includes the share of results achieved by the Bank’s 36 per cent owned associate, Faysal Bank Limited, which contributed to the year’s results.

Operating expenses increased by 4 per cent in 2005, due mainly to staff-related costs and investments in new technology. Expenses include a management fee of US$ 1.5 million payable to Dar Al-Maal Al-Islami Trust (DMI), and which remained unchanged from the previous year.

Owners' equity reached US$ 338 million at the end of the year, rising by 15 percent from US$ 294 million in 2004, while liquidity was maintained at a comfortable level. Total assets dropped by 6 per cent to US$ 1,526 million, due to reclassification of funds under management.

Mr. Hussain further added that “As a result, we are now a stronger and more efficient organisation, better equipped to face the challenges of increased competition, and take advantage of new business opportunities internationally and in the GCC region in particular. This will move us closer to achieving our vision of becoming the regional Islamic bank of choice, providing our customers with a range of high quality, competitive and value-added financial products and services, easily available through a platform of efficient and convenient distribution channels.”

Also present at the meeting will be the representatives of the Bank’s auditors PricewaterhouseCoopers, members of the Sharia’a supervisory board, the internal Sharia’a auditor, Bahrain Monetary Agency, Ministry of Commerce and Industry, Bahrain Stock Exchange, press and media and the Bank’s senior management personnel.