Strategy Update November 2008 Although the Al Baraka Banking Group is relatively new, its antecedents go back almost 30 years. The Group has come about as a result of a consolidation of various interests of Shaikh Saleh Abdullah Kamel in 10 Islamic banks, with the object of adding strength and purpose to his vision of creating a global Islamic banking group. Following its establishment, and having established appropriate centralised corporate governance and management infrastructure, the Group achieved in 2006 a combined private placement and public issue, designed to bring its name to the attention of investors and the market at large and to raise additional capital to strengthen its subsidiaries and position them for expansion in their home territories, as well as to enable the Group to commence its wider geographical expansion. The successful flotation on the Nasdaq Dubai Stock Exchange and the Bahrain Stock Exchange set the stage as a precursor to further expansion worldwide. The Al Baraka Banking Group's initial strategy after formation was fourfold: to achieve a successful consolidation of the subsidiaries into the Group structure; to establish control over the members of the Group via head office departments established by the Group's executive management team; to achieve a successful share flotation; and to commence the Group's expansion, both organically through expansion of its existing subsidiaries and by the establishment or acquisition of new subsidiaries in new countries. With the control and consolidation of the Group, followed by the successful flotation and subsequent enhancement of the share capital of many of its subsidiaries, and unification of broad Group policies, Al Baraka Banking Group has largely achieved its initial strategic aims. Its original strategic objectives - enhancement of shareholder value; research and development into new Islamic financial products benefiting its customers; distribution of its products and services and promotion of cross-border services; and achievement and maintenance of the highest corporate governance and regulatory compliance standards - are now established aims of all members of the Group and an inherent part of the corporate ethos. Whilst all of these aims will continue to be important motivators, however, we have determined that enhancement of shareholder value and stakeholder benefits must be the main business driver for the Group. In order to bring focus to that key objective, therefore, it is crucial that a clear set of strategies be established for the medium term, designed to ensure that all parts of the Group be made aware of what they must do to ensure success. With the help of a SWOT analysis we identified four primary strategic objectives that must be met if the Group is to achieve consistent and improving delivery of shareholder value and stakeholder benefits. These are: increased profitability; product innovation; technology and process enhancement and improvement in customer service and staff satisfaction. We have communicated these value drivers amongst the Group successfully and we meet twice a year to review our strategic direction. The Group has thus progressed from stride to stride, carrying our core values forward for the benefit of our shareholders and the society at large. As an exercise to developing a common identity and thereby harnessing the benefits of a concerted Group, we embarked upon introducing a common brand for the Group. During the course of rebranding ourselves, we identified "partnership" as the one quality that most aptly describes us and our business as we work with our customers in tandem for their benefit. Accordingly, we have stated our Vision in the context of our growth as an international banking conglomerate that promotes the betterment of society, as follows: 'We believe society needs a fair and equitable financial system: one which rewards effort and contributes to the development of the community' In keeping with our strong business relations with customers of partnership we identified ourMission as: 'To meet the financial needs of communities across the world by conducting business ethically in accordance with our beliefs, practicing the highest professional standards and sharing the mutual benefits with the customers, staff and shareholders who participate in our business success' With a new brand accompanied by a strong business ethos and strategy, we believe that the Group will be well-positioned to meet the challenges of the years ahead as the world recovers from the present economic crisis. As widely evident, Islamic banks have remained largely unscathed by the crisis of 2007-2008 owing to the prudent policies of Islamic banking. The Group's conservative strategy of preservation of liquidity and conduct of business in an environment of good Shari'a compliant internal controls and processes coupled with a cautious approach to business growth through out the Group and to the strengthening of existing relationships has paid it rich dividends. Besides the very nature of Islamic banking's prohibition of dealing in derivative and speculative assets has served to protect the Group from the adverse effects of the economic crisis. All in all we look ahead to the future with an air of optimism, building forward on our excellent track record.