Bituach Yashir Financial Investments: Year 2007 Results Total Revenues in all Activity Sectors – More than NIS 1.15 Billion 31/3/2008    March 31, 2008 Bituach Yashir Financial Investments: Year 2007 Results Total Revenues in all Activity Sectors – More than NIS 1.15 Billion -Record earnings of NIS 159 million -Increase of 13% in premiums from nonlife insurance business -Increase of 19% in premiums from life insurance business -Total premiums of NIS 330.9 million in the Polish subsidiary LINK4, an increase of 30% over 2006 -Continued rapid growth in the new insurance activity in the Czech Republic, with more than 17,000 policies on the day of publication of the report Bituach Yashir Financial Investments is publishing today its business results for 2007. Business results in 2007: -Premiums from nonlife insurance business totaled NIS 988.1 million compared to NIS 874.5 million a year earlier, an increase of 13% mainly due to higher premiums from nonlife insurance in Poland. -Premiums from life insurance business totaled NIS 129.7 million compared to NIS 109.4 million a year earlier, an increase of 19%. -Total earnings from insurance business amounted to NIS 31.4 million compared to NIS 151.4 million a year earlier. The lower earnings are mainly due to expenses related to the new activity in the Czech Republic and to weaker results in compulsory vehicle insurance in Israel. -Income from nonlife insurance business totaled NIS 18.7 million compared to NIS 131.2 million a year earlier – see the explanation above. -Income from life insurance business totaled NIS 12.7 million compared to NIS 20.2 million a year earlier. The decrease is mainly due to a rise in mortality claims in 2007 over 2006. Life insurance business in 2007 includes the new activity in this line by the Polish subsidiary LINK4LIFE. -Net profit totaled NIS 158.8 million compared to NIS 2 million a year earlier. Net profit includes a capital gain of NIS 262 million following the closure of the transaction making British insurance corporation R&SA a partner in the company’s international activity. Results of the Polish subsidiary LINK4 in 2007: -Premiums totaled NIS 330.9 million compared to NIS 253.7 million a year earlier, an increase of 30%. -The company’s share in income from nonlife insurance business totaled NIS 7.4 million, compared to a loss of NIS 3.7 million a year earlier. Results of the Czech subsidiary DIRECT in 2007: -The company launched its activity in the Czech Republic at the end of May 2007. -Premiums from nonlife insurance business totaled NIS 9.7 million. -As of the day of publication of the report, the portfolio of policyholders in the Czech Republic numbers more than 17,000 policies. Results of the subsidiary Yashir IDI (the Israeli insurer) in 2007: -Premiums from nonlife insurance business totaled NIS 661 million compared to NIS 620.8 million a year earlier, an increase of 6% due to a growth in the portfolio of policyholders. -Premiums from life insurance business totaled NIS 129.7 million compared to NIS 109.4 million a year earlier, an increase of 19% due to a growth in the portfolio of policyholders. -Total earnings from insurance business amounted to NIS 75.8 million compared to NIS 155 million a year earlier, a decrease of 51% mainly due to lower earnings in nonlife insurance business. -Income from nonlife insurance business totaled NIS 61.6 million compared to NIS 134.8 million a year earlier. -Income from life insurance business totaled NIS 14.2 million compared to NIS 20.2 million a year earlier, a decrease of 30% mainly due to an increase in the amount of claims over the year before. -The company reported a loss from investments not included in the insurance business reports net of expenses in respect of deferred notes of NIS 10.9 million, compared to a profit of NIS 12.8 million a year earlier. The decrease is mainly due the significant price declines in the Israeli and global capital markets, as well as the 2.8% rise in the consumer price index in 2007. -Net profit totaled NIS 38.8 million compared to NIS 76.6 million a year earlier. This profit includes onetime income of NIS 36.7 million recorded in the first quarter of 2007, due to the cancellation of the reserve for extraordinary risks in accordance with the directives of the Supervisor of Insurance. Other specializations -Direct financing – The company’s consumer credit business was launched several months ago. As of the day of publication of the report, the company has more than 4,300 customers generating a credit portfolio of NIS 140 million. This activity yielded in 2007 revenues of NIS 4.5 million. -Provident funds – The company closed the transaction for the acquisition of the provident funds of First International Bank and UBank. The total volume of assets stood as of October 31, 2007 at NIS 7.3 billion, in consideration for which the company paid NIS 206 million. The company’s CEO, Doron Schneidman, said: “In this quarter we were witness to sustained growth in the company’s activity in all the countries in which we are operating, reflected in revenues of more than NIS 1.15 billion. Our activity in the Czech Republic continued to grow, with a portfolio of more than 17,000 policies. We continue to believe in our ability to build a significant policyholder portfolio in this market. Side by side with the growth in the volume of activity, profitability in this year in general, and particularly in the fourth quarter, was negatively impacted by a number of factors which we have explained. We continued our efforts to develop synergetic activities in which we see a significant relative advantage. As part of this strategy, we launched this year the ‘direct financing’ activity which has rapidly gained momentum, creating in the short period since it was launched a base of more than 4,300 customers that have generated a loan portfolio of NIS 140 million. In the short term this activity will not contribute to the profit line, in view of the necessary investment.” Schneidman added: “The process of investment in building the new platforms which we are promoting was carried forward in the fourth quarter of the year. Apart from the investments required to operate the new activity in the Czech Republic, we devoted major efforts towards the startup of activity in Russia, projected for the coming period. We are aware that investments in setting up new activities are recorded as losses in the short term. At the same time, we are creating significant growth in the volume of premiums, in revenues and in the size of the customer portfolio. We see in the large capital gain announced by us in this report proof of the great potential that is inherent in these activities and of our ability to realize it for the benefit of the company’s shareholders.”