Bank Aljazira -2nd largest Saudi bank in terms of assets -Commercial banking primarily Net Income declined by 33%

-Decline in fees from banking services -Operating losses -Offset by better core banking operations -Increase in special commission income -Decrease in special commission expenses -Decrease in operating expenses -Cost-to-income ratio deteriorated -Other operating expenses increased Outlook and Valuation -Global financial turmoil -Economic downturn -Increased default risk (due to retail products) -All this led to decline in total assets -Net income hit harder than the industry which was itself in loss -Govt initiatives - inject liquidity, rate cuts - likely to restore confidence Business Model -HNIs and large instituitons served -Retail - growing through branch and ATM expansion -Subsidiary provides asset management -Well developed i-banking division with exposure to international markets Industry Scenario -Real GDP of SA is declining -High oil prices -Rapid credit growth and increased leverage has exposed the bank to a global and domestic turndown -Weakining real estate sector -Exposure to investments -Reversal trend in GDP expected -Money supply rising due to rise in time and saving deposits -Growth in claims to private sector becam negative STRENGTHS -Rich history of more than threedecades -Second largest Islamic bank in Saudi Arabia in terms of total assets -Strong initiatives in place to expand as multi-specialist Shariah-compliant bank along with diversifying its revenue streams WEAKNESS -Exposure to the real estate sector -Rising operating expenses leads to increase in cost-to-income ratio THREATS -Recent financial crisis and liquidity crunch might curb the expansion plans OPPORTUNITIES

-Growing popularity of Shariahcompliant products would provide enormous scope to increase revenue -Government s initiatives to inject liquidity in the economy expected to boost credit, thereby increasing the activities of banks