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Interim Report: 6 month period ended 30 June 2007Islamic Bank of Britain Plc
28 September 2007Registered number 4483430Contents
Chairman's statement
Income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Independent auditors' review report         Chairman's StatementI am pleased to present the Interim Report of Islamic Bank of Britain PLC for the six months period ended June 30th 2007. This has been a period of continued growth for the bank and also a period of consolidation. Having launched in August 2004 it was appropriate we revisited our strategic focus and ensured the correct vision is in place to meet the demands of our next stage of development.Some of the highlights of the first half year performance in 2007 include:

• Growth in customer numbers of 8722 (28%)

• Growth in bank and customer deposits of £27 million (32%)

• Growth in customer financing £4.5 million (41%)

The operating loss for the first half year amounted to £3.8 million (30 June 2006: £4.2 million). Operating income increased by 62% compared to the same period last year and stood at £2.1 million. This was less than budget due to lower than anticipated levels of asset growth. A review of all expense categories during the period established ongoing savings and ensured operating expenses were under budget at £6 million (30 June 2006: £5.6 million).During the period, management performed a review of the Bank's provisioning policy. Management made some adjustments to ensure it fully recognized the Bank's current experience in the wake of industry-wide deterioration. Impairment charges for the period amounted to £0.3 million (30 June 2006: £0.1 million) and accumulated provision reserves were £0.8 million (30 June 2006: £0.2 million) representing 0.5% (30 June 2006: 0.2%) of total assets.In June we launched internet banking for businesses which complemented our existing consumer product. This has proved to be a popular service among our customers and has received significant positive feedback.I would also like to mention the Bank's involvement in the development and implementation of "Centres of Excellence", educational resources to be established across the UK under the auspices of the Government's Academies Programme. This initiative underlines IBB's focus on young people and its commitment to supporting educational excellence in our schools.I am pleased to announce two new members of the Board of Directors. Mr. Abdul Hakim Al-Adhamy, BA, FCA will join the Board as Non-Executive Director on Oct 1st 2007. Mr. Sultan Choudhury joined as Executive Commercial Director on June 28th 2007.I would like to thank Islamic Bank of Britain's shareholders for their continued support and commitment to the Bank.May Allah grant us success in our endeavours.Mohsen Moustafa
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Interim Report: 6 month period ended 30 June 2007

Islamic Bank of Britain Plc
28 September 2007

Registered number 4483430

Contents

Chairman's statement
Income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Independent auditors' review report

Chairman's Statement

I am pleased to present the Interim Report of Islamic Bank of Britain PLC for the six months period ended June 30th 2007. This has been a period of continued growth for the bank and also a period of consolidation. Having launched in August 2004 it was appropriate we revisited our strategic focus and ensured the correct vision is in place to meet the demands of our next stage of development.

Some of the highlights of the first half year performance in 2007 include:

• Growth in customer numbers of 8722 (28%)

• Growth in bank and customer deposits of £27 million (32%)

• Growth in customer financing £4.5 million (41%)

During the period, management performed a review of the Bank's provisioning policy. Management made some adjustments to ensure it fully recognized the Bank's current experience in the wake of industry-wide deterioration. Impairment charges for the period amounted to £0.3 million (30 June 2006: £0.1 million) and accumulated provision reserves were £0.8 million (30 June 2006: £0.2 million) representing 0.5% (30 June 2006: 0.2%) of total assets.

In June we launched internet banking for businesses which complemented our existing consumer product. This has proved to be a popular service among our customers and has received significant positive feedback.

I would also like to mention the Bank's involvement in the development and implementation of "Centres of Excellence", educational resources to be established across the UK under the auspices of the Government's Academies Programme. This initiative underlines IBB's focus on young people and its commitment to supporting educational excellence in our schools.

I am pleased to announce two new members of the Board of Directors. Mr. Abdul Hakim Al-Adhamy, BA, FCA will join the Board as Non-Executive Director on Oct 1st 2007. Mr. Sultan Choudhury joined as Executive Commercial Director on June 28th 2007.

I would like to thank Islamic Bank of Britain's shareholders for their continued support and commitment to the Bank.

May Allah grant us success in our endeavours.

Mohsen Moustafa
Chairman