1

Financial Statements 31 December 2008

Financial Statements

31 March 2011

2

Disclaimer

This document has been prepared by Mizrahi-Tefahot Bank Ltd (UMTB) solely for use at the company’s presentation.The information contained in this document has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the company, or any of their employees or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. The distribution of this document may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. Forward looking statements for the company’s business, financial condition and results of operations, are subject to risks and uncertainties, that could cause actual results to differ materially from those contemplated. Such forward looking statements, include but are not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development and the effect of the company’s accounting policies, as well as certain other risk factors which are detailed from time to time in the company’s filings with the securities authorities.This document does not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation of any kind regarding any security or any interest in security.

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Trends in privately owned homes

8087

100

7880

8182838888

939899100

107

151

128

113

106107107108114

109113

118113

109 108

164

70

80

90

100

110

120

130

140

150

160

170

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 3/11

שינוי ריאלי real termsשינוי נומינלי nominal terms

Changes in house prices index

SOURCE: Bank of Israel, UMTB

4

Prime rate and average interest rates for CPI linked mortgages (maturity 17-20 years)(%,based on Bank of Israel data)

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%01

/01/20

00

27/06/20

00

22/12/20

00

18/06/20

01

13/12/20

01

09/06/20

02

04/12/20

02

31/05/20

03

25/11/20

03

21/05/20

04

15/11/20

04

12/05/20

05

06/11/20

05

03/05/20

06

28/10/20

06

24/04/20

07

19/10/20

07

14/04/20

08

09/10/20

08

05/04/20

09

30/09/20

09

27/03/20

10

21/09/20

10

18/03/20

11

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

ריבית פריים ריבית ממוצעת למשכנתא צמודת מדד

SOURCE: Bank of Israel

Prime rate Average int. rates for CPI linked mortgages

5

Supply side analysis

6,000.0

8,000.0

10,000.0

12,000.0

14,000.0

16,000.0

18,000.0

20,000.0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Q1

ותיר דפר

מס

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

יםשודח

מלאי דירות חדשות למכירה מבניה פרטית New dwellings (private construction)מספר חודשי היצע months of supply

New

dw

ellin

gs

Mon

ths

SOURCE: Central Bureau of Statistic

6

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

20

11 Q

1

שנים

ותיר דפרמס

65

75

85

95

105

115

125

135

145

שכורות ממוצעותמספר מ

התחלת בנייה גמר בנייה חודשי עבודה לרכישת דירה

SOURCE: Central Bureau of Statistic, UMTB

Building starts Building completions House prices in months of salary

Num

ber o

f dw

ellin

gs

Num

ber o

f ave

rage

sal

arie

s

Supply side analysis

7SOURCE: Bank of Israel

Mortgages as % of GDP

16%

17%

18%

19%

20%

21%

22%

23%

24%

25%

26%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

- Q1

8

Mortgages as % of GDP – global comparison

25%

24%

23%

22%

21%

20%

19%

18%

15%100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

אנגליה

שוודיה

ב "ארה

פורטוגל

ספרד

ממוצע באירופה

גרמניה

בלגיה

צרפת

אוסטריה

ישראל

איטליה

SOURCE: Bank of Israel, European Mortgage Federation

UK

Sweden

USA

Portugal

Spain

Europe average

Germany

Belgium

France

Austria

Israel

Italy

9

ב"ארה

שוודיה

אנגליה

ספרד

גרמניה

בלגיה

הממוצע באירופה

צרפת

פורטוגל

אוסטריה

ישראל

איטליה

30 25 20 15 10 5 0

באלפי יורו

Mortgage loans per capita

SOURCE: Bank of Israel, European Mortgage Federation

USA

Sweden

UK

Spain

Germany

Belgium

Europe average

France

Portugal

Austria

Israel

Italy

Euro ‘000

10

LTV ratio

Up to 60% 60% - 75% Above 75%

Average LTV ratio

Housing loans portfolio – LTV ratio

60.10%60.20%

59.90%

31.12.09 31.12.10 31.1.11

32.0%

46.7%

21.3%

11

21.3%

13.6%

16.1%

10.7%

35.9%37.5%

46.9%

33.7%

Prime linked loansas % of total housing loans

Up to 3 months3 m-1 y1- 2 y Average (entire mortgage portfolio)

Up to 3 months3 m-1 y1- 2 y Average (entire mortgage portfolio)

Loans with LTV above 75% as % of total housing loans

Housing loans portfolio

12

Net profit (NIS mil)

241222

201172

209

Q1 Q2 Q3 Q4 Q1

0 1 0 2 1 1 0 2

13

Net profit - Return on Equity

(1)14.5%

13.2%12.3%

10.8%

12.7%

Q1 Q2 Q3 Q4 Q1

0 1 0 2 1 1 0 2

14

Profit from financing operations (NIS mil)

Percentage changeQ1/2010 to Q1/2011Q1/ 2011 Q1/ 2010

714

)17(

752752

1

26

589

)69(

630630

5

28

21.2

-

19.419.4

-

-

11 8 -

-

Current operations

שווי הוגן ואחרות

TotalTotal

Gain from realized debentures available for sale and debentures held for trade, net

Revenues from interest on problem loans

Effect of accounting treatment of derivatives at fair value and others

15

Operating and other income (NIS mil)

5.8 %

Operating commissions Other income Net loss from investment insecurities

Q1/2010 01/2011

-1 01012

348329

16

Operating and other expenses (NIS mil)

Salaries Building & Equipmentmaintenance & depreciation

Others

Q1/2010 Q1/2011

104103148143

417380

17

Loans to the public (NIS mil)

109.4107.0

95.2

74.380.0

31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.3.2011

18

Deposits from the public (NIS mil)

91.8

73.3

95.0

106.0 109.0

31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.3.2011

19

Provisions / loans to the public

0.48%

0.24%

0.39%

0.72%

0.20%

Q1 Q2 Q3 Q4 Q120102010 20112011

20

Capital adequacy – Basel II

Tier I(1)

7.70%8.01%

13.61%14.12%

31.12.2010 31.3.2011

21

Equity (NIS bil)

5.56

5.95

6.53

7.206.96

31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.3.2011