Arab Bank Group entities receive A-/A-2 ratings from Standard & Poor’s

January 2007

Standard & Poor's (S&P) Rating Agency has assigned Arab Bank Group entities, including Arab Bank Australia Limited, ratings of "A-" long-term and "A-2" short-term counterparty credit ratings.

The new rating is in alignment with ratings the Arab Bank Group has received from Fitch (A-) and Moody's (A3) — the most internationally recognized rating agencies.

According to a report issued by S&P on January 15, 2007, the Arab Bank Group, with total shareholders equity of US$5.7 billion as of Q3 2006, is the leading banking group in the Middle East.

Arab Bank, which was established 76 years ago, operates the largest Arab banking network through 400 branches in 30 countries, spanning 5 continents. The ratings of the Arab Bank reflect the group's superior geographic diversification, robust capitalization, very strong liquidity, and high quality of assets.

S&P stated that Arab Bank Group is characterized by its growing strong financial indicators in comparison to the banking industry's highest standards.

S&P attributed the continued success of the Arab Bank Group to the prudent policies set by the Bank's Senior Management in managing financial risks. The report stated that non-performing loans of the bank are at its lowest, not exceeding 5% in the past five years.

The report also stated that the Arab Bank Group enjoys high liquidity, which has always been a priority.

Mr. Abdel Hamid Shoman, Chairman of the Board and Chief Executive Officer, said that the new credit classification assigned to the Bank by a reputable international credit agency re-emphasizes the Bank's sound strategic approach. It also demonstrates the Bank's foresight and ability to proactively and dynamically adapt with changes and risks in the banking world.

Mr. Shoman added that the new credit rating by S&P is the highest the Arab Bank Group received since its establishment and is in alignment with high ratings given to it by other renowned agencies such as Fitch and Moody's a few months ago. It also stresses the success of implementing its strategic initiatives, which has led to a significant increase in market share in various target markets.

In response to a question regarding the importance and effect of the new classification as well as the other ratings which the Bank has received, Mr. Shoman said: "This classification will have a positive effect on the operations of the Bank in the international financial markets."

Mr. Shoman predicts this new credit rating will further enhance Arab Bank Group’s financial performance.

International and regional financial institutions place a high priority on credit ratings which are considered to be key indicators of a bank's financial strength.

"The Bank has been successful in implementing its plan to achieve its vision of being the leading financial institution of the Arab World," Mr. Shoman said. He further noted that the Bank also places great emphasis on offering innovative financial products and services not just to meet but also exceed the clients' needs.

The Arab Bank, who has always been a pillar of strength for local and regional economies, has achieved high growth in terms of its deposit base and asset generation, which further diversified its loan portfolio.

As previously announced, the Bank will continue focusing its efforts on boosting its fee income, expanding its profit margins, growing its trade finance and project finance businesses while maintaining cost efficiencies.

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