2010 saw the Egyptian economy growing by an estimated 5.1% compared with 4.7% in 2009. The rate of inflation also fell back a little from the 12.6% recorded in fiscal 2009 to around 11.4%. The current account deficit was little changed at an estimated -2.0% of GDP. Whilst the events of February 2011 have brought about a momentous change in both the leadership and the political organisation of the country, and no doubt these will be followed by further changes of great significance, it is to be hoped that the economy will soon recover its momentum and return to its normal health. Al Baraka Egypt, in the meantime, does not foresee any substantial hiatus in the economic activity as a result of the developments, both recent and yet to come.

Total assets at Al Baraka Egypt grew in 2010 by 11% to reach $2.36 billion, driven by a 10% increase in total financings and investments to $2.05 billion, despite the impact on the asset base value of the depreciation of the Egyptian Pound against the US dollar of some 5.5%. The growth was fuelled in turn by 12% overall growth in the customer deposits and unrestricted investment accounts to $2.09 billion (of which URIAs accounted for $1.89 billion).

The bank's total income from joint financings and investments rose by 10% to $166 million, of which the investors’ share amounted to $116 million, increasing their return by 17% compared with 2009's $99 million. The bank's share, including its share as Mudarib, amounted to $50 million, some 3% less than in 2009. Including its income from fees and commissions, including Mudarib fees from RIAs, together with other operating income, the total operating income was $64 million compared with $65 million in 2009. After accounting for operating expenses of a little under $32 million - an increase of 8% - net operating income was 9% lower than the previous year at $33 million. Following deductions for (substantially lower) provisions together with taxation charge, however, the net profit for the bank amounted to $20 million, a noteworthy result compared with the $14 million recorded in 2009 and notwithstanding the impact of local currency depreciation against the dollar, estimated to have been about 2.5%.

Al Baraka Egypt opened 2 new branches during the year, bringing the total network to 21 branches and foreign exchange bureaus, while its ATM network was expanded to 20 from
18 the year before. During the year it launched several new products, including its Eآ£50 million Al Mutawazin investment fund – which met with an enthusiastic response and was oversubscribed 125% - as well as a time share leasing finance scheme to assist customers in the purchase of real estate, together with (non-profit) Umrah and Hajj loan schemes. It also progressed in its plans for its MasterCard debit and credit card services, which it will be launching in 2011. The bank's strong social commitment, evidenced through its Zakat Fund, was also evidenced through the establishment of three new medical units to provide medical treatment free of charge to the poor and the needy. During the year Al Baraka Egypt increased its issued share capital by $6.0 million to reach a total paid up capital of $92 million. Under its strategic 5-year expansion plan, Al Baraka Egypt means to open a further 19 branches and foreign exchange bureaus to create a total network of 40 by 2015. It aims to continue expanding its overseas correspondent bank associations, the better to service its business customers. Its range of specialist financial services offered to retail customers will also be broadened over the medium term. Amongst the planned products to be introduced are prepaid cards, for use in ATM machines worldwide, telephone banking and e-banking services, Ijarah facilities for its corporate clients and new savings and investment products. It intends to expand its syndicated loan portfolio, including Islamic syndicated facilities arranged on behalf of its own clients, whilst growing
its musharaka book, concentrating especially on diminishing
musharaka for its key customers.

The bank completed the rebranding process under the Group's unified corporate Identity programme in March 2010, announcing the change of identity along with the name change.

Mr. Ashraf Al Ghamrawi
Vice chairman
& Chief Executive Officer
60, Mohie Elddin Abu Elezz Street
P.O. Box 455 Dokki,
Cairo, Egypt
Tel: +2023 748 1222
Fax: +2023 761 1436/7
http://www.albaraka-bank.com.eg