Dear Shareholders,

I have the pleasure of welcoming you on behalf of the Board of Directors, to the 35th Ordinary & the 15th Extra Ordinary General Assembly meetings.

I seize this opportunity to extend on your behalf and on behalf of the Board Members our sincere gratitude to the President HH Sheikh Khalifa bin Zayed Al Nahyan, the Vice President HH Sheikh Mohamad bin Rashed Al Maktoum, HH Doctor Sheikh Sultan bin Mohamed Al Qassimi, Ruler of Sharjah and to their brothers, their Highnesses the Rulers, Members of the Supreme Council for their leadership especially during the Global Economic Crisis, and their vision to lead our country to prosperity and development.

Dear Shareholders,
The Financial crisis  that started in Autumn 2008,  and the decline of the International Economy that followed earmarked the year 2008.

The crisis witnessed dramatic events with the fall of major financial institutions threatening others that were salvaged by the interference of Governments of the world.

With the spreading of the Crisis, the Governments of several industrial countries announced stimulus packages of Billions of Dollars in an attempt to boost the economy.

The Financial Crisis had its impact on the Stock Markets where most of the indices plummeted, the Oil prices where also affected and dropped from their highest levels of $147 per barrel in July to below $40 per barrel in October.

The UAE was affected by the Financial Crisis, with the sudden liquidity crunch resulting from the withdrawal of huge amounts of “speculative monies”, which led to an unexpected and free fall in the Dubai and Abu Dhabi Financial Market Indices. This created chaos in the markets and triggered a lack of confidence that hit most of the sectors that were still booming until very recently, such as the real estate market.

The regulatory and financial authorities in the UAE intervened and under the guidance of H.H. Sheikh Khalifa Bin Zayed Al Nahyan President of the UAE and the follow up of H.H. Sheikh Mohammed Bin Rashed Al Maktoum, Vice President and Prime Minster of the UAE, a cash injection of AED 70 Billion was initiated in the form of deposits with Banks. In fact the first two injections for a total of AED 50 Billion took place prior to year end, and the Federal Government announced its guarantee to all Banks deposits for a period of 3 years, this important intervention restored some equilibrium to the markets.

The Financial system is awaiting further steps to be taken by the Central Bank to boost the economy and regain the stability of the Stock Market.

I am pleased to inform you that despite the unfavorable environment the excellent results realized by the Bank crowned our 35th anniversary.

The Bank realized Net Consolidated Profits of AED. 410 million against AED. 404 million in 2007. The Bank maintained its high profitability despite the collapse of the Stock Market, and the transfer of AED. 70 million to General Impairment of the Credit Portfolio, and AED. 98.4 Million Permanent Impairment towards Available for sale Investments in compliance with International Accounting Standards. It is worth mentioning that Emirates Lebanon Bank’s contribution to our profitability was limited due to the allocation for non recurrent expenses.

It gives me a great pleasure to inform you that during 2008 the Bank has successfully completed through Emirates Lebanon Bank the acquisition of the assets and branches of BNPI – Lebanon.

In light of these important results, I am pleased to advise you that the Board of Directors submits for your kind approval the distribution of cash dividends of 15%; and Bonus Issue of 15.11%.

The Bank’s results and achievements of 2008, are the culmination of years of planning by the Board of Directors, emphasizing the strength of the Bank to withstand turbulent times, thanks to the conservative credit, investment and liquidity policies that have been put in place and enforced since inception. The Bank has no exposure to the subprime market nor to any of the failed financial institutions.

Bank of Sharjah was rewarded with  the “Best Board Award” by Hawkamah (the Institute for Corporate Governance in the Middle East), to exercise good disclosure practices in the UAE.

It is worth noting that the composition of the Board in its current structure existed ever since the Bank was established in 1973. The award was received on the 35th anniversary celebration of Bank of Sharjah and thus is a testimony to the past and present performance of the successive Board of Directors in the interest of the Bank and its Shareholders.
 
Dear Shareholders,

I wish to present our sincere gratitude to HH Doctor Sheikh Sultan bin Mohamed Al Qassimi, Ruler of Sharjah, our Honorary Chairman, for his continued patronage.

I would also like to express our appreciation to the Monetary Authorities of the UAE notably the Ministry of Economy, the UAE Central Bank and the Securities and Commodities Authority; and to our Customers and Correspondents.

I also wish to thank the Management and Staff of the Bank for their services and devotion.

Finally, I have the honor to submit to you the Board of Directors report for the year 2008.

Ahmed Abdulla Al Noman
Chairman

Sharjah, 29/3/2009