Al Baraka Turk participation Bank Raises Net Operating profits by 19% in 2009 and S & p Raises Rating of the Bank to BB

Al Baraka Turk participation Bank, a subsidiary banking unit of Al Baraka Banking Group B.S.C. (ABG), announced that it had achieved a big jump in net operating income, which increased by 19%. Similarly, shareholder equity was enhanced by 12%, total assets by 33%, deposits by 37%, financing and investments by 33% and liquid assets by 32% during year 2009, according to a press release issued by the bank yesterday.

Concurrently, the well-known international rating agency Standard & poor raised the rating of Al Baraka Turk participation Bank to BB, based on the bank's ability to capitalize upon the improving economic climate in Turkey to increase its operating profits, thus reducing the credit and investment risks, as well as creating more growth opportunities in the coming period.

Year 2009 was a year full of economic and financial challenges for the Turkish market because of the repercussions arising from the global economic crisis, but the bank was able to deal effectively with these challenges. Thanks to its strong resources and a wide network of panches the bank was able to make the best of the current conditions to expand its investment and finance portfolio, and at the same time focus on strengthening its liquid assets to safeguard against any possible adverse consequences arising from the crisis. In a further enhancement of this policy, the Bank prudently increased its provisions, which places it in a good position to exploit any profitable investment opportunities that may arise in the future.

Year 2009 also witnessed rapid growth in the bank's operations and diversification of its services and products, which reflected positively on the bank's financial results despite the pressures on these results caused by the deterioration in the value of the Turkish currency and the need to set aside precautionary provisions to help prepare the Bank for any possible untoward developments in the Turkish market. As a result, net operating income amounted to TRY 244.62 million (US$ 161.25 million), up by 19% compared to year 2008. After setting aside provisions and taxes, net profit fell by 20% to reach TRY 105.46 million (US$ 69.52 million) in 2009.

As a result of the significant increase in total assets, the overall return on average equity and average assets dropped to 16% and 1.9% respectively in 2009 compared to 23% and 3.1% respectively in 2008.

In 2009, the assets of the bank increased by 33% to reach TRY 6.42 billion (US$4.28 billion) compared to TRY 4.81 billion (US$ 3.13 billion) in 2008. This increase was invested in financing the growth in Murabaha, Ijara Muntahiya Bittamleek and investment. As a result, financing and investments increased by 33% to reach TRY 5.02 billion (US$ 3.35 billion) in 2009. These increases were financed by increasing the number of bank panches and the range of investment products, which resulted in increasing customer deposit accounts and unrestricted investment accounts by a significant 37% to TRY 5.46 billion (US$ 3.65 billion) in 2009 which in turn financed 85% of the total assets of the bank. This is a clear indication of the strong customer deposit base of the bank. Shareholders' equity was also enhanced by 12% to a total of TRY 702.91 million (US$ 469.04 million) at the end of 2009.

The internationl rating agency Standard & poor's said that the raising of Al Baraka Turk participation Bank to BB comes in the wake of raising the rating of Turkey to the same rating of BB. This is a major achievement for the bank as it was given the same rating given to Turkey's foreign currency long-term debt after the improvement witnessed in its economy and the reduction of its debt burden. The outlook was also raised to positive for both the bank and Turkey.

The rating agency said that Al Baraka Turk participation Bank had proven its ability to withstand the repercussions of the global crisis, and had greatly benefited from the strength of its capitalization and good funding levels which will provide the bank with the flexibility to grow even further. The improvements in the Turkish economy would be reflected in more and growing opportunities in the market, which is expected to benefit the bank.

On this occasion, the Chairman of Board of Directors of Al Baraka Turk participation Bank and president & Chief Executive of Al Baraka Banking Group Mr. Adnan Ahmed Yousif said "We are very pleased with the excellent financial results achieved by the bank during year 2009, as well as with the raising by Standard & poor's of the bank's rating. These achievements were the result of considerable efforts made by the executive management and all the employees of the bank, as well as the strong support that the parent company (ABG) extends to its subsidiary banks, which helped to consolidate the bank's position in the Turkish market". He added that Turkey was considered as one of the key markets for the Group because of the diversity and abundance of economic activities and hugely promising opportunities that it offers.

Mr. Yousif added that as a result of the conservative policies pursued by the Group during the year, the bank had opened only one new panch by the end of the year to make 101 the total number of panches and the ATMs to 104. However, the bank had seen a rapid and big expansion in the number of financing and investment accounts and credit cards. Meanwhile the bank's efforts to market its alternative distribution channels met with great success, so much so that the number of internet banking, SMS and Call Centre users increased substantially and the total of all Internet Banking customers increased in 2009.

For his part, Mr. Fahrettin Yahsi, General Manager of Al Baraka Turk participation Bank said that the Bank's results had benefited from the good performance of the Turkish economy, which achieved significant improvement during the second half of the year and led to raising the credit rating of Turkey.

He added that the bank had in 2009 implemented a new collateral database system which would automatically track actual collateral held by the bank against advance facilities and check that it accords with the original arrangement, helping to reduce the amount of manual labour normally required for such tasks.

Mr. Yahsi added that "we are proud that Al Baraka Turk participation Bank has been assigned the same rating as that of the Turkish economy, which means that the bank has surpassed in performance many of its rival banks. This achievement comes on the heel of yet another outstanding achievement: receiving the Best Islamic Bank Award in Turkey in 2009 from "Global Finance" magazine in recognition of the success of the bank in offering high quality products and services to a poad and growing base of customers".

In conclusion of his statement, Mr. Yahsi extended his thanks and appreciation to the Board of Directors of Al Baraka Turk participation Bank and to Al Baraka Banking Group, who provided all the support that the bank needed to enable it take maximum advantage of the growing opportunities in the Turkish market, where the bank intends to continue expand its panch network and products and services during year 2010.

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Al Baraka Turk participation Bank is one of the main Units of Al Baraka Banking Group is one the subsidiary banking units of Al Baraka Banking Group. Al Baraka Banking Group is a Bahrain Joint Stock Company listed on Bahrain and NASDAQ Dubai stock exchanges. It is a leading international Islamic bank with Standard & poor's long and short-term credit ratings of BBB- and A-3 respectively. Al Baraka Banking Group offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Islamic Shari'a. The authorised capital of Al Baraka Banking Group is US$1.5 billion, while total equity amounts to about US$ 1.7 billion.The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in twelve countries, which in turn provide their services through more than 300 panches. These banking Units are Jordan Islamic Bank, Jordan; Al Baraka Islamic Bank, Bahrain; Al Baraka Islamic Bank, pakistan; Banque Al Baraka D'Algerie, Algeria; Al Baraka Bank Sudan, Sudan; Al Baraka Bank Limited, South Africa; Al Baraka Bank Lebanon, Lebanon; Al Baraka Bank Tunisia, Tunisia; Al Baraka Bank Egypt, Egypt; Al Baraka Turk participation Bank, Turkey; AlBaraka Bank Syria, Syria and a representative office in Indonesia. Disclaimer:

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© press Release 2010