Chairman’s Statement

On behalf of the Board of Directors, it gives me great pleasure to present the Industrial Development Bank of Egypt’s Annual Report for the year ending June 30^th, 2007 which coincides with its 60^th Anniversary .

In late 2002, when the new management team was mandated, by the Government (owner), to restructure the Bank from both a technical and financial perspective, a short and medium term strategy was devised and approved to meet the challenges of the task.

On the shorter term(24 months), we had to redefine our vision, mission, goals and understandings taking into consideration IDBE's history as a Bank that is focused on financing the private industrial SMEs. This required a total redefining of the Bank's organizational structure, manual, procedures and policies. Attracting professional staff and focused training of the bank's personnel was imperative at this stage.

On the longer term (5years), emphasis was placed on improving the overall quality of the Bank's portfolio by focusing on our niche business of extending finance to the industrial SME sector, while simultaneously aggressively solving the problem of non-performing loans. The latter was further ratified by IDBE's General Assembly in October 2005 in accordance with the Central Bank of Egypt's drive towards a stronger banking system. This action by the management and the owners(the Government) although resulted in losses during the years 2005/06- 2006/07, was crucial for the restructuring and future sustainability of IDBE.

To support this aggressive plan, the owners increased the Bank's paid-up capital to LE 500 million in 2004. Additionally, the CBE supported the Bank with a 12 year non-interest bearing deposit totaling LE 1 billion (throughout the period 2006-2008).

Steps for merging the Egyptian Workers Bank into IDBE have been taken to create a stronger financial institution capable of providing distinctive banking services to the Egyptian industry. In November 2008 Full merger was finalized under the name of "The Industrial Development & Workers Bank of Egypt "

The negative end P&L figures during 2006 and 2007 were a result of a conscious decision to apply corrective action as to the Bank's asset quality and revamping its operations. Return to final positive figures is forecast for this year - having recently moved to the following phase in restructuring .

I would like to take this opportunity to thank all of our clients and correspondents for their continued support and assure them of a fruitful and beneficial relationship .

Shahin Serageldin

Chairman of the Board