Board of directors report on the financial position as of 30/09/2006

Abu Dhabi Islamic Bank announces the first nine months of 2006 Third Quarter financials, which reflected the Bank’s keenness on growth succession and achieving the best returns for both shareholders and depositors.  ADIB made a Net Profit after Distribution to Depositors of AED 405 million at the end of the 3^rd Quarter of 2006; a 70.11% growth (the highest growth among those banks announced so far) in comparison to AED 238 million in 2005 of same period, hence, the shareholders’ equity on September 30, 2006 has mounted to AED 2.5 billion, as opposed to the AED 1.8 billion of September 30, 2005, recording a growth of 39%. The Earnings Per Share has also risen from AED 2.38 by end of September 2005 to AED 2.77 by end of September 2006, a growth rate of 16% notwithstanding the increase in number of shares after the capital increase with the right issue and bonus shares which took place during 2006.

It should also be stated that the Bank’s major interest in selecting and providing specific financing products that accommodate all customers’ needs, irrespective of their category, whether they may be individuals, corporations, or establishments, whereby such products have massively enhanced the size of finances to ascend to AED 26.4 billion as of September 30, 2006 as opposed to AED 19.8 billion of the same period the previous year, achieving a growth of 33%.

This remarkable growth in profit comes as a result of the expansion plans and growth in assets the bank had adopted earlier last year, where the Total assets has grown by 37% amounting to AED 30.7 billion at the end of the Third quarter of 2006 compared to AED 22.5 billion in the same period of last year.

Customers’ Deposits represented 74% of Total Assets amounting to AED 22.8        billion at the end of September 2006, a 25 % growth in comparison to AED 18.3 billion on the same date last year. Profit distribution to depositors has also increased by   116% from AED 468 million at the end of the third quarter of 2005 to AED 1,011 million at the end of the third quarter of 2006.

Significantly, Operating Income has increased making an income of AED  1,762 million compared to AED 930 million reported at the end of the third quarter of 2005; showing a growth rate of 90%.

The distinctive performance of the bank came as a result of integrated efforts by its employees, customers’ confidence and reputation of being a leading local Islamic bank, the expansion and development plan in U.A.E. and financing vital projects which have always reflected profits for shareholders and all other national sector, assuring the bank’s tight conjunction with the local market business entities and organizations.

As for the social aspect, ADIB did not miss out on the significance of its effective role in the social and cultural plans of the UAE government, whereby it has lodged UAE nationals’ wedding ceremonies in the UAE and participated in several social and cultural activities following the preceding General Assembly Meeting’s resolution of allocating 2% of the annual income for such social and charitable activities.

It is worth mentioning that the support the banking sector is receiving from the president of the U.A.E., H.H. Sheikh Khalifa Bin Zayed Al Nahyan, General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, their Highnesses Rulers of the Emirates, supervisors of the Central Bank, as well as customers, shareholders and the joint efforts of all the Bank’s employees have, combined, been the backbone of our success, which is expected to grow continuously throughout 2006 and the years to come, according to plan.

The table below indicates the Financial results as extracted from the Financial Statements as of 30/09/2006:

          AED millions