The response of Islamic finance to the recession: the value of Islamic finance to business in Birmingham 2 June 2009 Aziza Atta, Associate

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 2 Preliminary questions What are your expectations of Islamic finance? Do you understand what Islamic finance is? How large is the Islamic finance industry? Where is Islamic finance mainly conducted? Has the Islamic finance industry been adversely affected by sub-prime? Has the Islamic finance industry been adversely affected by the credit crunch? 2

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 3 The state of the markets Gulf: Dubai, Saudi Arabia, Qatar, Kuwait, Bahrain, Abu Dhabi South East Asia: Malaysia, Indonesia UK: Government sukuk, Olympics, state of financial institutions Europe: France, Germany, Italy, Malta, Spain, The Netherlands, Turkey 3

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 4 Understand the differences and capabilities Understand differences between types of Islamic financial institution (IFI): –investment versus wholesale deposit taking –State/quasi state ownership versus private shareholders Assess current exposures and concentration levels – what impact will this have on future activity? Debt or equity – explain misunderstanding Private equity – preference for equity and equity-like returns Scale – how big is the average IFI? Co-operative abilities? 4

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 5 Are there any opportunities? Western firms seeking Islamic financial support need to better understand what IFIs are looking for IFIs are not in the business of bailing out the Western banking system – other non-Islamic ME investors may be willing to help out Role and place of debt-based techniques Role of Islamic ‘windows’ in conventional banks contrasts with role of ‘fully Islamic’ financial institutions Misconceptions about liquidity in the Gulf States 5

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 6 Character of equity in Islamic finance Discrete private equity opportunities: –mid cap c. $50 - $100 million –Undervalued with growth potential –Transferable technologies or services –Energy and renewables – not green-field –Cash generating businesses The move towards Shariah ‘based’ rather than Shariah ‘compliant’ – what does this mean? 6

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 7 Implications going forward (1) IFIs and scholars will not tolerate ‘lip service’ There will need to be genuine efforts to structure products that are more genuinely Islamic in both form and substance May be some opportunity for debt financing of ‘brands’ and establishing new banking relationships Islamic banks still need liquidity – Western banks can provide that if willing to lend Islamic capital markets – will they come back? If so, in what form? Linkage between Islamic markets and conventional markets 7

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 8 Implications going forward (2) Mezzanine Islamic finance: –convertible sukuk –convertible murabaha –intercreditor issues –tranching 8

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 9 The value of Islamic finance to businesses in Birmingham Second largest city in Europe rebranding itself as key European centre for retail Islamic finance IBB – first standalone Islamic retail bank in the European Union is based in Egbaston Britain’s Islamic mortgage market worth £500m Can also serve Gulf investors keen to access Western assets

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 10 “The leader in this sector by a substantial margin” Legal and 2008 “the broadest Islamic finance offering on the market” Chambers and Partners 2009 “Best Takaful Law firm 2008” International Takaful Summit Awards “Best Islamic finance law firm 2008” Islamic Business and Finance and Islamic Finance News How we are rated on Islamic finance

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 11 Aziza Atta Associate Norton Rose LLP +44 (0) Aziza is an Islamic capital markets lawyer based in our London office. She specialises in Islamic capital markets. Aziza has advised numerous financial institutions and corporations on various types of Sukuk and Islamic structured product financings in the UK and the Middle East. She acts for a wide range of financial institutions offering Islamic financial solutions including Barclays Capital, Nomura International plc, Société Général and BNP Paribas. Aziza advised Barclays Global Investors in their launch of three Shariah- compliant index-linked exchange traded funds that are listed on the London Stock Exchange. Aziza is part of the HMRC Technical Group for Sukuk and has been involved in providing advice to the UK Government and the Financial Services Authority in relation to legislative and regulatory efforts to accommodate Islamic Finance in the UK. Aziza has published several articles on Islamic finance. Aziza qualified as a solicitor in February Before joining Norton Rose, Aziza worked at Freshfields Bruckhaus Deringer in London and Belgium, Shell Petroleum Development Company in Nigeria and Proyecto Ak’Tenamit in Guatemala.

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 12 Advising Barclays Global Investors on the establishment of three funds under the iShares programme, concerning the iShares operational processes and the fund documentation for the iShares. Advising the HM Treasury on their proposed Sterling Sukuk issuance. Advising BNP Paribas as lead arranger and one of the lead managers (along with Arab Bank plc and Samba Financial Group) on a US$650 million Sukuk Al- Manfa’a (trust certificates) due 2012 for Saad Trading, Contracting and Financial Services Company. Advising Kuwait Finance House (Bahrain) on the issue of trust certificates (Sukuk Al Musharaka) worth US$200 million by Diyaar Sukuk Company due Advising Amar Financing and Leasing Company as structuring and financing advisors (along with Kuwait Financial Centre S.A.K. and Rasameel Structured Finance Company) on their issue of US$30 million trust certificates due 2011 for Kuwait Commercial Markets Complex Company. Aziza Atta - CV continued Aziza has acted for conventional and Islamic financial institutions on a wide variety of transactions including the following:

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 13 Our international practice

Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose 14 Presentation disclaimers 1No individual who is a member, partner, shareholder, employee or consultant of, in or to any constituent part of Norton Rose Group (whether or not such individual is described as a “partner”) accepts or assumes responsibility, or has any liability, to any person in respect of this presentation. 2Any reference to a partner means a member of Norton Rose LLP or a consultant or employee of Norton Rose LLP or one of its affiliates with equivalent standing and qualifications. 3This presentation is not intended to give legal advice and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. Readers must take specific legal advice on any particular matter which concerns them. If you require any advice or information, please speak to your usual contact at Norton Rose Group.

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