European Islamic Investment Bank plc

("EIIB" or the "Company")

Interim Financial Statements - 30 June 2014

 Highlights

·      Financial performance for the six months to 30 June 2014 in line with management expectations

·      Operating income increased 68% to £6m (period to 30 June 2013: £3.6m)

·      Operating profit of £0.9m, compared favourably to a loss of £0.75m in the same period 2013 (2013: full year profit before tax from continuing operations £1.5m)

·      Assets under management (AUM) including capital seeded by the Group stood at US$1,123m (31 December 2013: US$1,176m)

·      Strong capital adequacy, regulatory and liquidity ratios maintained

For further information please contact:

EIIB plc                                                            Tel: +44 (0)20 7847 9900

Zulfi Caar Hydari, Chief Executive

Westhouse Securities                                     Tel: +44 (0)20 7601 6100

Antonio Bossi

Chief Executive Statement

Financial results

During the first half of 2014 the Group delivered satisfactory financial performance.

Total operating income for the period to 30 June 2014 was £6.0m (period to 30 June 2013: £3.6m). Total expenses for the period were £5.1m (2013: £4.3m). The resulting Operating profit for the period was £0.9m (2013: loss of £0.75m).

The bank also maintained its strong capital adequacy, regulatory and liquidity ratios.

Commentary

In the first half of the year we continued on our path of transforming EIIB into a market leading asset management and financing business, headquartered in London and focused on the Gulf Cooperation Council (GCC) countries.

The GCC market remained buoyant, with IPOs from GCC countries, representing the majority of all Middle East and North Africa (MENA) IPOs, raising some $2.26 billion during the period.

The upgrading of the UAE and Qatar to emerging markets status was a significant development. Saudi Arabia also announced plans to open its market to international investors. Increased ability to invest in the region will boost long-term prospects for regional markets.

Regional investors were also encouraged by signs of increasing stability in Egypt where our business continues to make steady progress.

Overall, the outlook remains positive with greater investment and IPO opportunities on the horizon.

Asset Management

Our investment performance remained strong across all of our Funds and client portfolios. Our flagship equity funds, the Arabian Markets Growth Equity Fund and the Rasmala GCC Islamic Equity Income Fund, produced returns of 13.63% and 10.45%, respectively. Our flagship fixed income funds, the Rasmala GCC Fixed Income Fund and the Rasmala Global Sukuk Fund, produced returns of 5.53% and 3.81%, respectively.

We continued to execute our product innovation plan with the launch of the Rasmala Trade Finance Fund. 

Our Assets under management (AUM) including capital seeded by the Group remained steady at US$1,123m (period to 31 December 2013: US$1,176m). An increase in AUMs in our equity funds and investment strategies of around $57m, and in our alternative investment strategies of around $31m, was offset by a decline in AUMs in our fixed income funds and money market investment strategies. The decline in AUMs in our fixed income and money markets funds and strategies was principally due to the maturity of a fixed income portfolio mandate of US$99m.

Our expanded range of products are now being supported by an enhanced sales team and we will continue to invest in our sales, distribution and marketing capabilities.

Capital Markets and Structured Finance

We are lead arranger and book runner for Europe-based insurance group FWU's US$100m sukuk al-wakala programme. The first tranche of US$20m was closed last year. We completed the second tranche of $40m during the reporting period. The FWU transaction showcases the bank's skill set in debt capital markets and structured debt finance.

EIIB also participated as a cornerstone investor in the Emirates REIT IPO on Nasdaq Dubai.

Legacy Investments

We continue to seek an orderly exit from our remaining legacy investments and remain focused on winding down non-core operations. 

Tender Offer

EIIB received authority from shareholders to undertake a tender offer and commenced the process. The Tender Offer remains open until 1.00pm on 10 October 2014 and will be implemented subject to consultation with EIIB's regulator.

Proposed Share Buy Back

EIIB did not receive a general authority from shareholders to buy back shares. The Board remains committed to a Share Buy Back and believes that the effect of such purchases would be in the best interests of shareholders.

UK Regulatory Permissions

The Board undertook a review of the scope of EIIB's UK regulatory permissions and concluded that the current scope is in excess of requirements. We have therefore initiated discussions with our regulators to vary our regulatory permissions in order to allow the Company to focus on its core strategy. We anticipate this will involve relinquishing EIIB's deposit-taking licence.

Outlook

Progress in the first half of the year has been satisfactory. We continue to focus on our core asset management strategy and see growing opportunities in our markets. We look forward to reporting further progress at year end.

Zulfi Caar Hydari

Chief Executive

Condensed consolidated statement of income for the six months ended 30 June 2014 (unaudited)

Condensed consolidated statement of other comprehensive income for the six months ended 30 June 2014 (unaudited)

Condensed consolidated statement of financial position at 30 June 2014 (unaudited)