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Dubai Islamic Bank

Investor Presentation May 2008

Contents

Background

About DIB
DIB Financials

Peer Group
Stock Information

Highly Profitable Banking Sector


Sector comprises of 49 banks
USD Bio

Banking Sector Profits


7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 5.06 5.39 6.66

22 national/local banks; 27 foreign banks

Sector of strategic importance to Govt.


Direct/indirect govt. ownership in majority of national banks Precedents available for Govt. support

Dec-05

Dec-06

Dec-07

UAE BANKING INDICATORS


350 300 250
USD BIO

Sector dominated by the national banks


Top 10 banks account for approximately 60-70% of total banking sector assets

273 236 170 116 168 140 103

200 150 100 50 0

152

162

Sector experiencing strong growth

Bank Assets
Source: UAE Central Bank

Bank Deposits

Loans & Adv

Booming Islamic Banking Market


Islamic banking is one of the fastest growing industry segments in the Financial Services sector Growth momentum, both in the Arab world and globally, estimated at 20% p.a. plus Approximately 400 Islamic institutions globally with assets in excess of US$ 500 billion More than US$ 20 billion in international Islamic bond issuance to date Targeted regions include GCC, South Asia, South East Asia and select niche markets Entry by Global Commercial/ Investment banks in this sector

Key Players in the Islamic Banking Market in UAE / Middle East Region

Existing Players

New Entrants

Contents

Background

About DIB
DIB Financials

Peer Group
Stock Information

Dubai Islamic Bank


The Worlds First Islamic Bank Part of the Big Five Islamic Banks in the world

The largest Islamic Bank in UAE Amongst the top 4 Banks in the country

Globally recognized Leader and Innovator in Islamic Banking

Government ownership 34%

Strong Domestic Franchise Nearly 600,000 retail customers 49 branches / nearly 300 ATMs, CDM

Rated A1 by Moodys and A by S&P


One of the Worlds Top Islamic Banks; Systemically important to its domestic banking market
Key Strengths: Robust and sustainable financial performance Strong liquidity Likely government support in case of need Solid risk-monitoring architecture, improving asset quality
Profitability: Improved and of good quality, reflecting superior business diversification DIBs ratings reflect its strong franchise as a leading Islamic Financial Institution, its relationship with the Dubai government and its satisfactory financial fundamentals DIBs foreign currency issuer ratings are set at A1/Prime-1 based on the banks intrinsic safety and soundness and on a strong likelihood of external support from the UAE authorities and DIBs main shareholders in case of need. DIBs relationship with the Dubai government enhances its franchise DIBs foreign currency issuer ratings benefit from a high degree of external support Increasing earning power and profitability DIB enjoys a good deposit base, with a lower deposit concentration than other UAE banks

DIBs principal business is focused on its five core units


Largest business unit within DIB Full range of products and services Customer segments: Mass affluent, Wealth management, SME One of the largest Retail customer base in UAE Market leaders: Deposits products and Auto finance

Retail & Business Banking

Investment Banking Real Estate, Contracting Finance, Direct Equities

Millennium Capital and Millennium Finance subsidiaries incorporated in Dubai International Financial Centre Investment banking activities such as project finance, loan syndication, capital markets, asset management and structured finance as well as Corporate Advisory Services Global leaders in Sukuk issuance: #1 in the Bloomberg league table in 2006
Leading provider of Real Estate Finance services in the UAE with significant role in supporting real estate developments Financing to contractors in the oil, gas, power and water sectors Short term equity investments in established companies and business start-ups across MENA region Large & Middle Market Bankers to top corporate houses in GCC Financing for Trade and Manufacturing and Infrastructure Cash Management capabilities Foreign exchange services Asset-liability management Islamic derivatives

Corporate Banking

Treasury

Dubai Islamic Bank Strategic Agenda


Growth drivers to be Retail, Corporate Banking & Investment Banking Leveraging on the success in Dubai to capitalize on opportunities in other Emirates

Focus on Value Growth: cross selling, new Islamic products embed cost awareness

To be amongst the Top

3
Banks in UAE

Continually innovate using the latest technology and product expertise leading to ease and convenience

Evolving from a pure banking entity to a more comprehensive Financial Services Group

Diversifying DIBs revenue streams through penetration and presence in new markets in the MENA region

Portfolio Diversification, Business Overview


Diversified portfolio both with respect to economic sectors and customer segments Key economic sectors include government / public sector and real estate
Among the most significant Arrangers of financing for Dubai Government
Sectorial Exposure of Financial Assets (2007) Segmental Revenue; % of Total Revenue (2007)

Manuf / Services 19%

Others 12%
Real Estate 26%

Treasury 14%
Govt 7%

Retail Banking 32%

Retail 10%

Investment Banking 7%
Direct Equity 16% Corporate Banking 7% Real Estate/Contra ct Financing 12%

Financial Institutions 38%

An Integral, Recognized player in the Islamic Finance sector


Mega Deals Awards & Accolades (2005-07)

US$ 3.52 Bn Sukuk issue for Nakheel (Dubai World)


US$ 3.5 Bn Sukuk issue for PCFC (Govt of Dubai)

Best Bank in UAE, 2006: The Banker


Best Islamic Bank in ME, 2006: Euromoney Best Debt house UAE, 2005: Euromoney

US$ 2 Billion Sukuk for Dubai Civil Aviation for expansion project of Dubai International Airport
US$ 600m Government of Malaysia Sukuk US$ 600m Pakistan Sovereign Sukuk US$ 550m Sukuk for Emirates Airlines US$ 530m Lead Arranger for Qatar Gas II

Best Sukuk House, 2005: Euromoney


Award for Finance (2005): Shaikh Mohammed Bin Rashid Business Award Quality Recognition Award, 2005: JP Morgan Chase Banking Achievement Award for the Middle East, by Emerging Markets Publication during the IMF Conference in New York, Oct07

Contents

Background

About DIB
DIB Financials

Peer Group
Stock Information

Key Financials Trend


Net Profit: USD Million
Net Profit (USD 'Mn)

Maintaining robust profitability


681

700 650 600 550 500 450 400 350 300 250 200 150 100 50 -

About 12-fold growth in net profits over the last 5 years Improved profitability attributed to both growth in core business and growth in Islamic market

60%
425

Net Profit (USD 'Mn)

47% 130% 47%


44 2002 289

97%
64 2003

126 2004
Years

Total Assets: USD Billion


2005 2006 2007 23.0
Value

Total Assets (USD 'Mn)

22.9

Total Assets (USD 'Bn)

Strong and consistent growth in total assets. Increase of 4+ times over last 5 years Focus on quality and portfolio mix of assets along with aggressive growth
13

18.0

31%
17.5

50%
13.0

40% 11.7
8.0

16%
5.3 3.0

34%
6.2

8.3

2002

2003

2004

2005
Years
Value

2006

2007

Key Financials Trend


Total Deposits: USD Billion
Total Deposits (USD 'Mn)

Strong and consistent growth in total deposits


17.6

17.0
Total Deposits (USD 'Bn)

15.0 13.0 11.0 9.0 7.0 5.0 3.0 2002 2003 2004
Years
Value

36% 43% 34% 25%


9.1 13.0

DIB is the #3 bank in customer deposits in UAE

17%
4.6
5.4

6.8

Total Financing: USD Billion


2005 2006 2007 14.0 13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0
Total Financing (USD 'Mn)

13.3

38%
9.6

More than 4 fold growth in gross financing in 5 years Well diversified and balanced portfolio, with lending to all key industry sectors

Total Financing (USD 'Bn)

25%
7.7

62% 21%
2.8 2002

43%
3.3 2003

4.8

2004

2005
Years

2006

2007

14

Key Financials Trend


ROE
ROE

40% 30%
ROE

Consistent growth in ROE, in line with the top 5 banks


31.7% 25.5% 26.4%

20% 19.7% 12.2% 14.3% 10% 0% 2002 2003 2004


Years

Marginal drop in 2006 attributed to increase in capital of US$906 million

2005

2006

2007

ROA
ROA

Steady growth in ROA in last 5 years


Return on assets of 3.4%, in the top end among major UAE Banks
15
Source: Bloomberg
ROA

4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

2.89% 1.73% 0.91% 2002 1.11% 2003 2004


Years

2.90%

3.40%

2005

2006

2007

Strong deposit base to support growth plans

Customer Deposits Composition 2001 2007

15.4%

13.5%

17.1% 67.5%

21.7% 64.8%

Investment Deposits

Current

Saving

16

Key Financials Trend


Cost-Income
Cost/Income Ratio

Cost to Income at 40%


Increased due to investment in new branding, new branches, improved systems and channels

60.0% 50.0%
Cost / Income Ratio

56% 50% 37% 41% 32% 40%

40.0%

30.0%
20.0% 10.0% 0.0% 2002 2003

2004

2005
Years

2006

2007

Advances to Deposits
DIB - AD Ratio

AD Ratio

Healthy liquidity maintained compared to peer banks in UAE

90% 80% 70% 60% 50% 40% 30% 20%

85% 60%
62% 70% 74%

75%

2002
17

2003

2004
Years

2005

2006

2007

Contents

About Dubai, UAE

About DIB
DIB Financials

Peer Group
Stock Information

Domestic peer group comparison


Net Profit Growth: USD Million
Net Profit (USD 'Mn)

1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 -

1,074
32%

Net Profit ( USD 'Mn )

815

19%

60%

682

681

418

-5%

31%

DIB net profits CAGR is the highest among comparable peer banks
Net profits among the top 3 banks in UAE
Total Assets: USD Billion

573

567

21%

541

547

425

ENBD

NBAD

DIB

ADCB

FGB

2006 Banks 2007


Total Assets

428

MESQ

517

70.0

38.0

Total assets among the top 5 banks in UAE

Total Assetss ( USD 'bln)

60.0 50.0

45.2

68.7

52%

40.0 30.0 20.0 10.0 -

38% 31% 55%

27.5

28.9

30%

53%

23.9

22.1

15.4

17.5

22.8

ENBD

NBAD

ADCB

FGB

DIB

2006 Banks 2007

13.0

MESQ

19.9

Domestic peer group comparison


Total Deposits: USD Billion
Total Deposits

Total deposits among top 3 banks in UAE

40.0

Total Deposits ( USD 'bln)

30.0

26.0

37.7

45%

16%

22.3

20.0 10.0 -

19.3

36%

17.7

32%

11.8

15.6

52%

39%

14.2

13.0

13.1

9.4

ENBD

NBAD

DIB

ADCB

FGB

2006 Banks 2007


47.0 53% 37.0

9.4

Total Financing: USD Billion

MESQ
Total Financing (USD 'Mn)

Finance Amt (USD 'Bn)

27.0

29.7

45.3

CAGR

39%

21%

21.7

17.0

15.7

17.0

20.6

13.3

(3.0)

ENBD

NBAD

ADCB

DIB

6.8

FGB

Banks 2006 2007

8.0

Total financing among the top 5 banks

12.1

39%

77%

7.0

M ESQ

10.4

30%

9.6

Domestic peer group comparison


ROE: 2007
ROE

27% 25% 23%

26.0%

ROE top amongst peer banks Compares favorably with major banks globally

25.0% 23.8%

19% 17% 15% DIB NBAD ENBD


Banks

21.0%

21%

22.0%

ROE

18.0%

ROA: 2007
MESQ FGB ADCB
ROA

3.5%

3.38%

3.1% 2.9% 2.7%

ROA

2.5% 2.3% 2.1% 1.9% 1.7% 1.5% DIB FGB

2.63%

ROA among top 3 banks

3.32%

3.3%

2.12%

2.08%

MESQ
Banks

ADCB

NBAD

ENBD

21

Source: Bloomberg

2007

1.89%

Domestic peer group comparison


Cost Income Ratio 2007
Cost/ Incom e Ratio

50% 40%
Cost/Income Ratio

37% 30% 27% 20% 10% 22% 29%

38%

40%

Increased due to infrastructure spend, technology, new branches, and staff packages in line with the market

Financing to Deposit 2007


0% FGB ADCB NBAD
Banks 2007

MESQ

ENBD

DIB
140% 120%

Advance / De pos it Ratio

132% 120%

Advance / Deposit Ratio

100% 98% 80% 75% 60% 40% 20% 0% DIB MESQ FGB
Bank s

Most liquid amongst banks in UAE

79%

85%

NBAD

ENBD

ADCB

22

Source: Bloomberg

2007

Contents

About Dubai, UAE

About DIB
DIB Financials

Peer Group
Stock Information

Key Metrics
Bloomberg ID: DIB UH Equity
Key Indicators: USD

US$ 3.40

40 35 30
Percentage

26.2
Current US$

25 20 15 10 5 0 1.75 2003 2.98 2004 2005 PB Ratio 12.75 7.5 2.65 2006 PE Ratio 2.93 2007 3.4 14.78 11.67 11.29 14.61

2.5 0

US$ 2.40

Q1 2008

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Face value for 2003, 2004 equated to $0.27/ share Source: DFM, DIB Published accounts

Dividend payments
Steady growth in dividend payments to shareholders 2006 and 2007 dividend includes payment of bonus through shares of 7% and 15% respectively
Dividend Payment History

60% 50% 40% 40% 30% 20% 20% 10% 10% 0% 2002
25

55%

42%

15%

2003

2004

2005

2006

2007

DIB Shares
Share Trading on DFM
YTD Mar 2008

Highly Liquid DIB capitalization as a % of total DFM: 6.9%

DFM trading volume (bn)

26.34 0.81

DIB trading volume (bn) DIB % of DFM Volume

3.07%

5th largest market capitalization


Percentage of DIB shares allowed to be owned by foreigners: 15%

DFM trading value (USD Bio)

$ 34.14

DIB trading value (USD Bio)

$ 2.49

DIB % of DFM Value

7.29%

DFM Market Cap Value (USD Bio) DIB Market Cap Value DIB % of DFM Market Cap

$126.81 $8.77 6.91%


Source: DFM

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The information provided in this presentation should not be used as a substitute for any form of advice. Decisions based on this information are for your own account and risk. Although DIB attempts to provide accurate, complete and up-to-date information, which has been obtained from sources that are considered reliable, DIB makes no warranties or representations, express or implied, as to whether information provided is accurate, complete or up-to-date.

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