30/09/2011 Overview

The Israeli Economy 2

*FiBi’s Forecast Growth Rate of GDP * 3

4 Bank of Israel Interest Rate Bank of Israel Interest Rate * and Rate of Inflation Rate of Inflation *Bank of Israel Interest. **Fibi’s Forecast

S&P FITCHMOODY’S A+A+AA1A1 Long Term A1A1F1F1P1P1 Short Term Stable Outlook 5 Israel Credit Rating

FIBI Banking Group Universal bank with strong niche position in capital markets, foreign exchange and foreign trade. 174 Branches in Israel (including subsidiaries). 6

7 FIBI’s Strategic Road Map Focus on Retail and PB while Realizing Synergies Mergers and Acquisitions No. of branches Realizing Synergies, Restraining Expenses Market share in private banking increased Number of retail customers doubled Integration of the banks IT systems Group Branding Cross selling products within the group Merger of mortgage banks

Group Structure - Corporate + Middle Market Banking - Private + Affluent banking - Capital & Money Markets - 80 branches 8 Affluent Banking International -Retail /Commercial -Branches: 48 -Since Retail -Branches: 19 -Since Retail/Commercial -Branches: 20 -Since Capital Markets, Trust & Custody - Private + affluent banking -Since 2004 Retail Banking Cluster - Private Banking - Since Commercial / Corporate - Since 1982

FIBI’s Rating Moody’s A3 prime-2 Bank Deposits – foreign & domestic, long & short term BFSR D+ Financial Strength StableOutlook Midrug (Israel) Aa1 Midrug Ma’a lot-S&P AA / Stable Issuer AA- / Stable Subordinated Notes 9

Ownership Structure 10 The Public FIBI Holding Company Ltd. Israel Discount Bank 79.06% 53% 20.94% 20.02% 26.45% 100% 75.89% 51% 100% Bino-Liberman Group 10

11 The Bino family 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 45.5% 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). 11 Shareholders 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. The Liberman family

Financial Reports 30/09/

13 נתונים מצטברים Net Operating Earnings and ROE NIS Millions 10.5%- 7.3% 7.5% 8.6% 1.5%

The deepening of the crisis in the financial markets has had a substantial effect on the results of the third quarter and the first nine months of 2011 III 2011/1-9/2011 NIS Millions (Net) (40)(33) Fair value of ALM derivatives : the effect of the gap between measuring the results of the derivative instruments on a fair value basis in comparison with measuring results in balance sheet financial activities on an accrual basis (62)(17)Provisions for impairments in securities portfolio (10)(16)Effect of the losses on severance pay funding (112)(66) Total effect of the crisis on profits and losses 14

Statements of income 01-09/2011– 01-09/2010 NIS Millions Net change 01-09/ /2011 (34) Net interest income before provision for doubtful debts 58N.A Of which : Recovery of loan losses (73)(59) Provision for doubtful debts (3) 1,0631,058 Operating commissions (35) 9(44) Income from investment in shares (& dividend) (16) 226 Other income (2) 2,0802,077 Operating & other expenses (110) Operating earnings before tax taxation (50) Operating earnings after tax The banks net equity in operating results of investee companies 8(24)(16) Exterior share holders & extraordinary income (36) Net earnings

Change1-9/ /2011 (5)1,578*1,583 Net interest income before provision for doubtful debts (22)6(16) excluding : Hedging of volatility in provision for taxes 271,5721,599 Net interest income before provision for doubtful debts (excluding: Hedging of volatility in provision for taxes) 24(75)(51) excluding : fair value of ALM derivatives 31,6471,650 Net interest income before provision for doubtful debts (excluding: Hedging of volatility in provision for taxes and fair value of ALM derivatives) (112)18876 excluding: Gains/losses from sale and writedown of available for sale 1151,4591,574 Excluding interest income charged on problem loans * 16 Net interest income before provision for doubtful debts 1-9/2011 – 1-9/2010 NIS Millions

Statements of income III/2011– III/2010 NIS Millions Net change III/2010III/2011 (80) Net interest income before provision for doubtful debts (19) 19- Of which : Recovery of loan losses (29) (30)(59) Provision for doubtful debts Operating commissions (90) 9(81) Income from investment in shares (& dividend) (8) 8- Other income (6) Operating & other expenses (8) Operating earnings before tax taxation (116) Operating earnings after tax 7916 The banks net equity in operating results of investee companies 1(7)(6) Exterior share holders & extraordinary income (108)12921 Net earnings 17

Total Income Credit to the public 50% of the revenues are from the private and the personal segments small business 2% Deposits from the Public 18 Income & Assets according to segments

19 Trands30/9 %NIS Millions %2,23161,85064,081 Total credit to the public (10.1%)(2,444)25,15421,710 Of: Corporate credit 14.0%1,66511,85213,517 Commercial credit 9.9%1,28412,94914,233 Consumer credit 13.4%1,72612,89514,621Mortgages Trends in credit to the public NIS Millions Conservative credit policy: __% of the period performanceare are in LTV below __%.

Efficiency Ratio: Operating Expenses to Total Income 76.2% 79.8% 78.0% 83.4% 20 Operating Expenses to Total Income Operating Expenses Total Income % Operating Expenses / Total Income % Adjusted Operating Expenses / Total Income * *Expenses excluding severance pay fund effects, special provisions ; Net interest income excluding gains/losses from sale and writedown of available for sale bonds, hedging of volatility in provision for taxes, interest income charged on problem loans and effect of reconciliations to fair value of ALM derivatives ; Operating income excluding dividend, realization or decline in value of shares and severance pay fund gains;

21 Operating & Other Expenses (NIS Millions) 1-9/ /2011 Total Operating & Other Expenses

22 Deposits from the Public 78.9 NIS Billion Deposits to Credit Ratio Liquid Assets to Deposits Ratio Capital Adequacy Basel II Tier 1 Capital Adequacy Credit to the Public 64.1 NIS Billion Gov. & Bank Deposits 1.5 NIS Billion 8.20% 123.1% 32.9% 43.8% Of capital available for Investments State of Israel Bonds: 8.0 NIS Billion Deposits-Bank of Israel: 14.2 NIS Billion Sovereigns Bonds: 0.7 NIS Billion Deposits in Banks: 3.1 NIS Billion Banks Bonds: 1.3 NIS Billion NIS+foreign Corporate Bonds: 0.8 NIS Billion Structure Products, Hedge Funds & Stocks:0.8 NIS Billion Market Risks in VAR Terms: (0.07) NIS Billion Capital Notes 5.0 NIS Billion Capital available for Investments 3.9 NIS Billion 12.71%  12.1% backed with cash, deposits & state of Israel bonds FIBI Strategic Assets & liabilities structure NIS Millions

23 Total Assets, Deposits & Credit NIS Billions Credit to the public Public Deposits Equity Assets NIS Billions $ Billions

24 Composition of Total Proprietary Trading Book Composition Composition volume volume %77% 10,6168,720 Government bonds & Secured by Government bonds 17%11%2,6951,295 Commercial Banks bonds 6%5% Shares 10%7%1, Other Of which: Fx Corporate Bonds Of which: NIS Corporate Bonds 100% 15,802 11,41 6 Total PIIGS Exposure NIS Millions Government bonds & Secured by Government bonds 77% SovereignsTotal 00Portugal 3103Italy 00Greece 15131Spain 08Irekand NIS Millions

Key Risk Indicators 25

% 14.57% 13.42% Capital Adequacy Ratio Basel II Tier 2 FIBI Core Tier 1 4 top Banks in Israel * * * * **

Change Balance for date 31/12/201030/09/2011 (118)1,2421,124Defective credit risk (127) Inferior credit risk (42)1, Credit risk subject to special supervision Off-balance sheet credit risk * (287)3,1402,853 Total Doubtful debts Doubtful debts according to the new B.O.I Regulation (NIS millions) * After accounting deductions and before credit lost provision 27

28 Provision for Doubtful Debts to Credit to the Public Ratio Other 4 Leading Banks FIBI

Main Subsidiaries Performance 29

30 Changes in Net Profit - Subsidiaries NIS Millions ROEChange01-09/ / %118.5% %(10.3%) %27.8% %2.3%

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. UBANK - FIBI acquired 100% of share capital of UBANK (formerly Investec Bank (Israel) Ltd.) in December 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. 31 Banking Subsidiaries in Israel

32 OTSAR HAHAYAL - FIBI acquired the majority share of Otsar Hahayal in August, 2006, it now hold 75.89% 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 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. 32

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