JOINT PRESS RELEASE

Gumhouria and Umma banks to merge to speed up banking sector reform process

Tripoli, Libya. Inline with a predefined strategy, the Central Bank of Libya is pursuing a restructuring and modernization effort of the Libyan financial sector aiming at improving services to reach standards of international institutions. As part of this effort, the Boards of Directors of Gumhouria and Umma Banks, the largest and fifth largest Libyan state-owned commercial banks met end of last week in Tripoli to approve a future merger of equals of the two organizations. With 143 branches, 5,800 employees and a balance sheet of more than 8 billion Libyan Dinars (6.5 billion USD), the new bank will be by far Libya's largest domestic bank and after Libyan Foreign Bank, the country's second largest. It will also be amongst North Africa's top-10 banks, based on 2006 total assets.

The deal is a key element of an ongoing modernization effort of Libya's financial sector, which most visible results so far were the sale of a controlling stake in Sahara, Libya's second largest bank, to the international Banking Group BNP Paribas and the recent announcement to also sell a controlling stake in Wahda Bank, Libya's fourth largest. The merger, which will also encompass a modernization effort, will complement the reform program initiated by the Central Bank of Libya. It will benefit all key stakeholders, particularly the current and future customers, the two banks' employees, as well as the Libyan public at large.

With regard to current and future customers the deal will provide access to better products and services to meet their needs, increase customer satisfaction through faster and easier processes, as well as provide access to a broader branch network.

The employees of the new bank will have better career opportunities in a larger and fast-growing institution and enjoy massive investments into training and HR development in order to support the expected strong growth trajectory.

Finally, the Libyan public will benefit as the merger will give its citizens access to a safe and strong National Champion that can sustainably operate in the new competitive market environment. Libyans will appreciate the increased efficiency of the financial sector by realizing cost-, revenue- and restructuring economies of scale and scope and benefit from stronger economic growth achieved through enlarged opportunities to provide loans to the corporate customer base. In addition, the Central Bank's intention to privatize the new entity at a later point in time will foster the private sector development and allow citizens to participate in economic growth and wealth creation.

Vision

The new National Champion will be a modern and profitable bank with international standards within the next few years. To reach this goal several initiatives are planned, and will be soon launched. A non exhaustive list of those initiatives includes:

¶ Appointing competent resources and talents in key positions

¶ Emphasis on new technologies and alternative channels

¶ Modernization of processes

¶ Adopting best sales and marketing practices

Merger process and timetable

The transaction is subject to the approval of the extraordinary shareholder's meetings of Umma and Gumhouria Banks, which will be most likely held in early 2008. It is planned that the two banks will effectively run as one entity during the first half 2008.

Enquiries:

For further information: merger-info@cbl.gov.ly