Ladies & Gentlemen,

The major events of 2005 marked deeply the whole country and perturbed the economic activity especially during the first half of the year, leading to an annual rate of growth close to 0%.

The Lebanese Economy and particularly the Banking Sector showed a high flexibility and capacity to face the challenges of this period. The Balance of payments scored a surplus amounting to US$747.2 Mio and the Central Bank maintained its Gross Foreign Reserves at a high level amounting to US$11.83 Bio at December 31, 2005.

The exchange rate of the National Currency remained stable versus the US Dollar, and the Interest Rates resisted in the face of the strong pressures of the market.

The deposits in the Banking Sector grew by 3.9% and the Budget registered a deficit of US$1.86 Bio, outlining a decrease of 7.5% compared to 2004 deficit, while the Net Public Debt increased by 5.5% and reached the equivalent of US$34.8 Bio end of 2005.

In this prevailing atmosphere, BIT Bank was ready, with its conservative operating policy, to face all the adversities. The Bank pursued its strategic plan of expansion, increasing its Capital by US$4.5 Mio. This increase comes as a part of a total increase of US$29.5 Mio to be accomplished during 2006. Thus the Shareholders Equity would become around US$60 Mio.

The Bank developed its Private Banking Unit, reorganized and enlarged its Credit Risk Department and reinforced its Risk Management. Also a “Basel II committee” was created in order to prepare for the implementation of Basel II requirements.

On the other hand, BIT Bank scored a high growth in Net Income before provision for doubtful debts of around 53% over year 2004. This Net Income reached US$1.72 Mio. The Bank maintained a relatively high risk based capital ratio of 25% and a liquidity ratio of 77.6%. Return on average Assets and Return on average paid up Capital in year 2005 stood at 0.5% and 13.5% respectively.

BIT Bank, similarly to previous years, and in view to strengthen its provisions and net worth, has taken the profit realized in 2005 to provisions account; this practice has generated an over provision balance totaling US$2 Mio which will be transferred later on to the capital account in consolidation of the shareholders’ equity.

Finally, I would like to thank our Shareholders for their constant support, our Staff for their loyalty and competence and our Clients for their valued confidence. I would like also to wish to BIT Bank further growth and sustainable competitiveness for the years to come.

FOUAD JAMIL EL KHAZEN

Chairman & General Manager