Overview 31/03/2010. 2 GDP Rate of Growth (%) * Forecast.

Overview

31/03/2010

2

GDP Rate of Growth (%)

*Forecast

3

*Bank of Israel Interest rate for the last month of the Year / Period

Bank of Israel Interest Rate

Bank of Israel Interest Rate *and the Rate of Inflation

Rate of Inflation

**Forecast

)January – March 2010(

4

Country Ratings

MOODY’SFITCHS & P

Bank Deposits (Long Term)A1AA

Bank Deposits (Short Term)P1F1A1

OutlookStableStableStable

Financial Reports31/03/2010

Ownership Structure

Bino/Liberman Group

The Public FIBI Holding Company Ltd. FIBI Investment House Ltd.

Israel Discount Bank

The First Int’l & Co. Underwriting and Investments Ltd.

Modus-Selective Investments Management

& Advice Ltd.

International Leasing Ltd.

Israel Credit Cards Ltd.

First International Issues Ltd.

E - 79.06, V - 79.06E - 20.94, V - 20.94 E - 100, V - 100

E - 0, V - 0 (Stocks Dormant) E - 54.33, V - 74.9

E - 19.22, V - 14.01

E - 26.45, V - 11.09

E – 73.79V – 73.33

E – 100 (07/04/2010)V – 100 (07/04/2010)

E - 51V - 51

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 100V - 100

E - 28.2V - 21

E - 100V - 100

E - 75V - 75

E - % Share in EquityV - % Voting Right6

- Retail /Commercial- Branches: 47- Since 2006- Key Audience:

Security

- Retail- Branches: 17- Since 2008- Key Audience:

Teachers

First International Bank Group

First International Bank

- Corporate + middle market banking- Private + affluent banking- Capital & Finance Markets- 79 branches

Retail BankCluster

International- Capital, Trust & Custody Markets- Private + affluent banking- 6 branches- Since 2004

- Private Banking- Since 1984

- Business / Corporate Banking- Since 1982

- Retail/Commercial- Branches: 19- Since 1977- Key Audience:

Ultra Orthodox

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Shareholders

TheLiberman family

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.

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Shareholders

Mr. Zadik Bino 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 C.E.O 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 42.6% 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).

Since acquiring the controlling interest in FIBI Holdings and the Bank in 2003, both Mr.Zadik Bino and his son, Mr. Gil Bino, serve as members of the Board of Directors of FIBI, as well as of the Bank's. The controlling interest in FIBI and in the Bank is held by the Bino Family (Mr. Zadik Bino and his three Children).

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First International Bank of Israel - FIBI

Universal bank with strong niche position in capital markets, foreign exchange and foreign trade

Domestic subsidiaries target focused audiences: affluent banking (UBank), security sector - retail banking (Otsar Hahayal), ultra-orthodox Jews (PAGI), and teachers (Massad)

Foreign subsidiaries in London (commercial banking) and Zurich (private banking)

Branches: 168 in Israel (including subsidiaries)

Equity: NIS 6,316 Million (USD 1,701 Million*)

5th largest banking group in Israel

* $/NIS = 3.713 as of Mar. 31, 2010

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Bank Ratings

Moody’s

Bank Deposits (Long Term)A 2

Bank Deposits (Short Term)P-1

Financial StrengthC-

OutlookNegative

Midrug – Israel

MidrugAa1

Ma’a lot - S&P

IssuerAA / Negative

Subordinated NotesAA - / Negative

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Core Capabilities

Strategy - Main Focus

Conservative capitalization levels: capital adequacy ratio of 14.73%; 1st tier adequacy ratio of 9.9%; deposit/credit ratio of 134%

Improved credit mix: steps taken to diversify portfolio through increased penetration of middle market and more consumer credit

Conservatively managed foreign proprietary trading book

Upgraded scoring model and processes in anticipation of Basel II, including development of advanced credit-scoring models for risk-based pricing

Top class reputation in private banking services, especially dealing room, specialized investment advice center and TASE futures and operations index, where FIBI is a market leader

Distinctive professional standards in: global capital markets, currency exchange, structured products and foreign trade

Strong traditional position in corporate banking

Risk Profile

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New ProductsClients

Strategy - Main Focus

Corporate finance: decrease concentration of credit portfolio, increase penetration of middle market

Private banking: increase market and wallet share through advisory services; extend presence in affluent and mass-affluent segments

Retail banking: broaden overall footprint (e.g., acquired Bank OtsarHahayal and Massad)

Measures taken to increase group efficiency, including implementation of a shared-services model

Decision taken to withdraw from computer infrastructure outsourcing agreement

State-of-the-art pension-planning advice offering

Other

Client-centric vs. product-oriented banking

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Group Consolidation

Objective: to realize synergies from three bank acquisitions

Implement shared-services model, including IT systems (UBank IT

systems converted in 2008, Massad converted in 2010 and Otsar-Hahayal

planned for 2010; HQ units unified: logistics, severance pay fund

operations, regulatory units and parts of training and human resources

operations, process to be accelerated in 2010)

Cross-sell products (mortgages, structured products, advisory services,

pension planning, trust, factoring)

Create streamlined and effective branch network to meet growing

competition in retail and private banking markets

Oversee management: FIBI executive board members serve on the boards

of the new subsidiaries

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Net Operating Earnings and ROENIS Millions

Quarterly

8.8%**10.2%*

12.5**%

8.5%10.3%

8.0%

*ROE based on first tier ratio of 8.0% (Bazel II) **ROE based on first tier ratio of 8.0% (Bazel I)

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Ratio of Provision for Doubtful Debts to Credit to the Public

0.27%

1.75%

1.34%

0.99%

0.63%

0.46%0.53% 0.53%

0.89%

0.39%

0.13%

0.32%

0.37%0.33%

0.42%

0.91%

0.62%

0.76%

0.38%

0.82%0.74%

0.64%

0.28%

0.85% 0.72%0.92%

1.10%

1.28%

2000 2001 2002 2003 2004 2005 2006 2007 2008 I/09 II/09 III/09 IV/09 I/10

4 Other Leading Banks FIBI

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Total Credit Risk in Respect ofProblematic Debts (NIS millions)

Balance for dateChange31/03/10

Compared with

31/12/0931/03/1031/12/0931/12/0831/12/0731/12/06

Non income bearing debts578643713662815)65(

Restructured debts62215324281236)153(

Debts scheduled for restructuring22263-348(4)

Debts temporarily in arrears13210615317222426

Debts subject to special supervision

1,8931,9282,4301,6962,349)35(

Off-balance sheet credit risk373346445269291)27(

Total credit risk in respect of problematic debts

3,0603,2644,0683,0804,263)204(

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Shares 4%

Commercial Banks bonds

43%

Other 8% MBS (PRIME+ALTA)

4%

Governments bonds&

Secured by Governments

bonds 42%

Composition of Total Proprietary Trading Book – 31.03.2010

Governments bonds &

Secured by Governments bonds 66% => State of Israel

Bonds 81%

Shares 2%Others 12%

Commercial Banks bonds

20%

AmountNIS MillionComposition

Government & Secured by Government bonds10,01466%

Commercial Banks bonds3,08020%

Shares3162%

Other1,70212%

Total15,112100%

Foreign Currency Proprietary Trading Book Total Proprietary Trading Book

Foreign Countries Credit Exposure

Total ExposureNIS Million

Paid by May 2010

NIS Million

Portugal5555

Ireland188

Greece--

Spain1544

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Operating & Other Expenses (Group)(NIS Millions)

650

353

129168

697

383

135179

Total Operating Expenses Salaries & RelatedExpenses

Maintenance, Depreciation,Premises & Equipment

Other Expenses

I / 2009 I / 2010

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I / 2009 I / 2010

Operating Expenses & Income Adjusted * Operating Expenses & Income

• Financing Income excluding provisions for decline in value of clarification 8 position and fair value of derivative instruments, Operating Income excluding dividends, provisions for decline in value of shares and severance pay fund gains; expenses excluding severance pay fund effects and Standard 14

I / 2009 I / 2010

52.4%57.7% 53.1%54.2%

Operating Income and Expenses

% %Operating Expenses Operating Income Cost / Income Ratio Adjusted Cost / Income Ratio

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14.30%14.57%

13.42%

Capital Adequacy Ratio – Bazel II

Second Tier 4 Bank Groups

Capital Adequacy

First Tier Capital Adequacy

FIBIFirst Tier

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Changes in Assets, Deposits & Credit to the Public (NIS Billions)

Credit to the public

Deposits from the public

Shareholders equity

Assets

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Financial Strength Ratios as of 31.03.2010

Capital Adequacy

Ratio*

First tier Capital Adequacy Ratio*

Deposit / Credit Ratio

Problematic debt / Credit

Ratio

Doubtful debts / Credit Ratio

FIBI 214.73%19.90%1134.0%15.1%10.13%

POALIM 413.87%28.78%4104.7%37.3%50.56%

LEUMI 114.87%38.43%3117.8%49.1%30.25%

DISCOUNT 512.50%57.75%2122.4%37.3%40.41%

MIZRAHI TEFAHOT 314.14%48.00%599.6%25.3%20.23%

AVERAGE 14.05%8.50%113.4%7.4%0.36%

*Bazel II

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Deposits from the Public81.2 NIS Billion

Deposits / Credit Ratio

Liquid Assets

Capital Adequacy – Bazel II

First Tier – Bazel II

Deposits from the Public

Capital Investments

Credit tothe Public60.5 NIS Billion

Gov. & Bank Deposits1.9 NIS Billion

9.90%

134.0%

36.8%

46.9%Of capital available for Investments

Bonds-State of Israel: 8.1 NIS Billion

Cash/Deposits-Bank of Israel:17.0 NIS Billion

Bonds-Foreign states: 1.8 NIS BillionDeposits in Banks: 3.2 NIS Billion

Bonds-Banks: 3.1 NIS Billion

NIS+Forex Corporate Bonds:1.6 NIS Billion

Structure Products, Hedge Funds & Stocks:0.4 NIS Billion

Credit Risks in VAR Terms: (0.03) NIS Billion

Capital Notes4.9 NIS Billion

Capital available for Investments4.5 NIS Billion

14.73%

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PAGI, in which FIBI has a 100% equity holding is a commercial bank with 19 branches, and 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 segment has grown significantly. PAGI’s strategy is to aggressively grow its client base, while focusing on target segments with intensive financial activity in personal, business, and institutional banking.

Banking Subsidiaries in Israel

UBANK - FIBI acquired 100% of share capital of UBANK (formerly Investec Bank (Israel) Ltd.) in December 2004. It is maintained as an independent subsidiary. 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.

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OTSAR HAHAYAL - FIBI acquired 74.0% of the share capital of Otsar Hahayal in August, 2006. Bank Otsar Hahayal specializes in retail and small to medium-sized businesses (SMEs) and has a high proportion of current and former 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 activity and earning base. FIBI is currently in the process of integrating Otsar Hahayal’s IT systems and coordinating across headquarters support functions.

Banking Subsidiaries in Israel

MASSAD - FIBI acquired 51% of the share capital of Massad in May 2008.Massad, as a sectorial bank, specializes in teaching personnel as its client base. FIBI completed the process of integrating Massad’s IT System and coordinating 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.

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