And say, ‘’Do {as you will}, for Allah will see your deeds, and {so, will} His Messenger and the believers. And you

will be returned to the Knower of the unseen and the witnessed, and He will inform your of that

you used to do

Verse 105 (Surat Al-Tawbah)

In the Name of Allah, The Most Gracious, The Most Merciful

4

(To achieve pioneering in Islamic banking by talent – developing of the human being, contributing in achieving the economical and social development, and to provide integrated solutions that satisfy concerned stakeholders)

(Our values derived from our faith, traditions and culture: trustiness, honesty and transparency)

(We look forward to be at the forefront of banks operating in Sudan to achieve excellence in development and social welfare, and to promote confidence in our dealings internally and externally)

THe MIssIoN

our VAlues

THe VIsIoN

5

CoNTeNTs:

No. Subject Page1 Directory of HQs, branches ............................................................................ 42 geographical distribution of branches ....................................................... 53 Board of Directors .......................................................................................... 64 Sharia’a Supervisory Board ............................................................................ 75 Executive Management .................................................................................. 86 Economic Developments in 2017 ................................................................... 10

7 Chairman Board of Director’s address before the 28st Shareholders’ General Assembly 12

8 Financial Indictors (2015 - 2017) ................................................................... 169 General auditors reports .................................................................................. 18

10 Statement of Financial position as at 31/12/2017 .......................................... 2111 Income Statement for the year Ended 31/12/2017 ......................................... 2212 Statement of Cash flows for the year Ended 31/12/2017 ............................... 2313 Statement of Changes in owners’ equity for the year Ended 31/12/2017 ....... 2414 Notes on Financial Statements ....................................................................... 2515 Sharia’a Supervisory Board’s report ............................................................... 4216 Resolutions of the 28th Shareholders’ General Assembly ............................. 4317 Correspondents Network ................................................................................ 44

6

Head Quarters’ AddressesElsayed Abdurrahman St. Eastern Khartoum- SudanTel: (+249-183) 779078 – 774728 - 771735 Fax: (+249-183) 784282 – 773585 - 766470Swift: (isbssdkh) P.O Box: 10036, Khartoum- Sudan Postal Code: 11111Website: www.shib.sdE-mail: info@shib.sd

operating Branches:

FaxTelBranch(+ 249-183) 795720(+ 249-183) 795721 Tower(+ 249-183) 785098(+ 249-183) 783043Khartoum(+ 249-183) 783925(+ 249-183) 783921Alsouque Alarabi (Kh).(+ 249-183) 472849(+ 249-183) 472837Industrial Area (Kh).(+ 249-183) 460714(+ 249-183) 487958Saggana(+ 249-183) 420182(+ 249-183) 420183Alsouque Almahali (kh)(+ 249-183) 722002(+ 249-183) 722002Elkalakla(+ 249-187) 554606(+ 249-187) 553330Omdurman(+ 249-187) 997051(+ 249-187) 454156Souque Shabi (Om)(+ 249-187) 730514(+ 249-187) 730515Souque Libya(+ 249-185) 331141(+ 249-185) 330582Indus. Area (Kh. North). (+249 -155) 117213(+249- 120) 819296Souque «6»(+ 249-183) 731049(+ 249-183) 731048International University of Africa (+ 249-183) 731563(+ 249-183) 731561Khartoum (2)(+249 - 0441) 843479(+249 - 0441) 843479Gedarif(+ 249 - 0241) 822292(+ 249 -0241) 823839 Dongola(+249 - 0311) 826046(+249 - 0311) 826042 Port- Sudan(+ 249 - 0511) 840445(+ 249- 0511) 840445 Wad Medani(+ 249 - 0571) 824850(+ 249- 0571) 824645 Kosti(+ 249-183) 730148(+ 249-183) 730149Alhafeer(+ 249 - 0611) 843920(+ 249- 0611) 843910Alobaid(+ 249-183) 731620(+ 249-183) 731613Kasla(+249-183) 731731(+249-183) 731732 Bahri

DIreCTory of THe HeAD QuArTer AND BrANCHes

7

A MAp sHowING GeoGrApHICAl spreAD of BrANCHes

Kosti

Wad Madani

Alobaid

Gadarif

Kasala

Port Sudan

Alhafeer

Dongola

operating Branches inKhartoum state TowerKhartoumAl Souque Alarabi (kh)Industrial Area (kh)SagganaAl Souque Almahali (kh)AlkalaklaIndustrial Area (kh. North)OmdurmanSouque shabi (Om).Souque Lybia

Souque «6»International University of Africa Khartoum (2)Bahri

Khartoum

8

Chairman of the Board of Directors

Mr. Al Bagir yusuf Mudawi

BoArD of DIreCTors

9

BoArD MeMBers:

1- Mr. Ahmed Ali Ahmed Alhussain. 2- Mrs. Samia Ahmed Mohamed3- Mr. Ali Abdulatif Abobaker.4-Mr. Babeker Mohamed Ahmed Babeker5- Dr. Abdul Rahiem Mohamed Bakhiet6- Mr. Yahiya Osman Ali7- Mr. Ahmed Al Rasheed Saad Alsofi 8- Mr. Ali saeed Ahmed kambal.9- Mr. Abdallah Al Mohtady Al Wasila

secretary of the Board of Directors:Mr. Mohamed Bushra Khalafalla

sharia supervisory Board: 1- Prof. Mohamed Zain Al Hade Al Haj Karar Chairman2- Dr. Ibrahim Ahmed Mohamed Al Sadeg Al Karory Member3- Dr. Abdel Wahid Osman Mustafa Member4- Dr. Saber Abaas Mohamed Abudegen Reporter

legal Advisor:Mr. Mutasim Hassan Mahgoob Mohamed

Auditor:Messrs: the National Audit Chamber

10

exeCuTIVe MANAGeMeNT

GeNerAl MANAGer

Deputy General Manager

Mr. Abdullah Noureddin Ahmed Mohamed G M A for administration, researches and planning

Mr. Salah Mohamed Abdul Rahiem Ali

Mr. Kamal El-Sheikh Al-Tayeb Mohamed

11

MANAGers of DepArTMeNTs:

1. Mr. Hassan Mahmoud Ahmed Abd El-Ghaffar Legal Affairs 2. Mr. Ghazi Abdel Hay Bin Oaf Internal Control and Inspection3. Mr. Ahmed Abdel Hay Mohamed Ahmed Risk Department4. Mr. Ali Hassan Hamad El-Hussain Administrative Affairs5. Mr. Satti Mohamed Satti Hamad Ziyada Information Technology 6. Mr. Osama Ali Ibrahim El-Sadiq Financial Affairs 7. Mr. Abd El-wahab Mohamed Abd El-Kariem Marketing & Public Relations8. Mr. Osama Altyeb Elfaki Osman External Relation & Foreign Currency9. Mr. Osama Mohamed Said Ahmed Alfadel Investment & Finance 10. Mr. Badr Mohamed Al-Jack Al-Abbas Planning & Research11. Mr. Ahmed Altaher Said Ahmed Taher Training &Quality Control12. Mr. Fat’h Alaliem Osman Farah Alsheikh Banking Affairs & Branches13. Mr. Jamal Hassan Osman Salw Executive Office14. Mr. Mubarak Mamoon Abd Al-Samad Compliance Officer15. Mr. Eiz Aldeen Alaraky Alkazeen Ahmad Human Resources

BrANCHes MANAGers

1. Mr. A’arif Mohamed Bashir Ali Khartoum2. Mr. Kamal Abd Allah Mohamed Abd El-Qadir Saggana3. Mr. Mutasim Abdel Aziz Fagier Ahmed Alburuj4. Mr. Mohamed Al-Hussain Ahmed Ja’al Indus. Area khartoum.5. Mr. Abd El-Moniem Ibrahim Al-Sheikh Indus. Area khartoum North6. Mr. Sir Al-Khatim Hassan Sir Al-Khatim Alsouque Almahali khartoum7. Mr. Salah Mustafa Mohamed Abd El-Kariem Omdurman8. Mr. Salah Eldien Ibrahim Sheikh Ibrahim Wad Madani9. Mr. Mubarak Mohamed Abd Alghani Babeker Kasala10. Mr. Mohamed Alnoor Aadm Alfadul El-Kalakla11. Mr. Adam Tahir Wagdab Mohamed Souque “6”12. Mr. Mudawy Ahmed Mohamed Madani Port – Sudan13. Mr. Mohamed Ahmed Mohamed El-Sheikh International University of Africa14. Mr. Nor Aldein Abd Alhaleim Hamed Arbab Kosti15. Mr. Mamoon Mohamed Karar Osman Alsouque Alarabi khartoum.16. Mr. Nazar Mohammed Alzain Abdulrahman Alobaid17. Mr. Aadel Hussain Hassan Alfaki Khartoum “2”18. Mr. Mohamed Hassan Dahab Mohamed Souque Libya19. Mr. Haisar Mahmoud Hussein Ismail Bahri20. Mr. Gamar Alanbia Abd Alkareim Ali Ahmed Gedarif 21. Mr. Sir Al-Khatim Hussain Mohamed Ali Souque Shabi Omdurman22. Mr. Abd El-Haliem Bashier Haroon Bashier Dongola23. Mr. Waz Eldeen Ibraheem Abd ulrahman Alhafeer

12

Indicators of International economy: economic Growth rate: The growth rate of international economy was % 3.5 in the year 2017 compared with % 3.1 in the year 2016. In the Middle East and North Africa, the growth rate was % 2.6 in the year 2017 compared with % 3.9 in the year 2016.Inflation rate: The average of inflation increased in the advanced countries from % 1 in the year 2016 to % 1.6 in the year 2017. And in the developing countries increased from % 4.4 in the year 2016 to % 4.7 in the year 2017.saving: The saving levels of the (GDP) internationally decreased from % 26 in the year 2016 to % 25.7 in the year 2017. In the Middle East and North Africa, it increased from % 24.1 in the year 2016 to % 26.5 in the year 2017.unemployment:unemployment in the advanced countries decreased from % 8.7 in the year 2016 to % 8.3 in the year 2017.

Indicators of local economy:Growth rate:(GDP) increased from % 3 in the year 2016 to % 3.7 in the year 2017.Inflation rate:Inflation rate decreased from % 30.5 in the year 2016 to % 25.2 in the year 2017.unemployment:Unemployment decreased from % 20.6 in the year 2016 to % 19.6 in the year 2017.

THe INTerNATIoNAl AND loCAl eCoNoMIC DeVelopMeNT for THe yeAr 2017

13

Money supply:Money supply reached, 203,368 million Sd pounds at the end of the year 2017, compared with 120,800 million Sd pounds at the end of the year 2016 with an increase of ratio that reached % 68 The Central Bank of the Sudan is practicing the policy of financial inclusion to draw all the savings inside the banks, as the total currency which was manipulated outside the banks was reckoned to be 61,455 million Sd pounds at the end of the year 2017 compared with the sum of 38,712 million Sd pounds at the end of the year 2016, with an increase of ratio that reached %78.

The Development of Banking environment:Banks Deposits:The total sum of banks deposits in the local currency increased from 65,692 million SD pounds at the end of the year 2016 to 116, 953 million SD pounds at the end of the year 2017 with an increase of ratio that reached % 56. The total sum of bank deposits in hard currency increased from 14,225 million SD pounds at the end of 2016 to 23,011 million SD pounds at the end of 2017 with an increase of ratio that reached % 62 .Bank financing:The total sum of bank financing increased from 64,197 million SD pounds in the year 2016 to 102,928 million SD pounds at the end of the year 2017 with growth average that reached %60. And in general, agriculture was in the first place in bank financing with the ratio of % 20.4, industry % 15.3, constructions % 14.2, local trade % 11.7, transport % 5.4, others % 33, while the average of profit margin was % 13.6 at the end of 2017.

references:-World Economic Outlook.- Central Bank of Sudan, Economic newsletter.-The Periodic Journal of Central Bank of Sudan.

14

Praise be to Allah, the sustainer of the universes, and prayers and peace be upon Prophet Mohammed the leader of pious persons, the last prophet, the merciful with human beings. And prayers and peace be upon his wives who are the mothers of all Muslim people, his family and his companions and followers to the Day of Resurrection.

The shareholders of Shamal Islamic Bank,The representatives of Sudan Central Bank,The representative of Khartoum stock of Exchange,The representative of the General Audit, Republic of the Sudan,The representative of the Bank Legal Advisor,The representative of the Companies General Registrar, The Head and Members of the Bank Shari’a Board ,Members of the Board of Directors,

The honorable guests The dear brothers / the staff of the bankAl Salam Alaykum warahmatu Allah wa barakatuI, personally, and on behalf of the members of the Board of Directors, welcome you and grasp this opportunity of the 28th meeting of the General Assembly, to review the performance of our bank for the previous year 2017.

Dear brothers: First of all, I start this letter with the exposure of the bank classification according to the assessment of the Sudan Central Bank and according to the report of the requirements of Protection Control compliant to the indications of (CAEL) issued on 31 December 2017. The classification of the bank was (Fair) according to the following details:

THe leTTer of THe CHAIrMAN of BoArD of DIreCTors ADDressING THe sHAreHolDers of THe GeNerAl AsseMBly (28) for THe yeAr eNDeD IN DeCeMBer 2017

15

1- The capital of the bank, (Satisfactory)2- The Assets of the bank, (Satisfactory)3- The deposits of the bank (Satisfactory)4- The liquidity of the bank (Not satisfactory).

RateComposite rateLEAC Name Fair2,755222Shamal Is. Bank

The bank obtained the following market share:1- Financing % 2.112- Assets %1.713- Revenue %1.844- Ownership equity %1.71

Dear shareholders:It gives me great pleasure to inform you about the most relevant indicators that expose to you the magnificent results of the splendid financial performance of your favorite bank in the year 2017 compared with the results of performance in the previous year 2016. This marvelous work was achieved by the appreciated exerted efforts of the cooperative members of the Board of Directors in collaboration and coordination with the Administration and the working staff as the following:

(The amount in thousand SD pound)Growth rateyears Item20172016201720162015%49%213,357,3192,245,8551,863,486Total assets%62%132,819,0431,741,7131,547,846Total deposits%51%222,550,6381,689,0311,389,542Total financing%25%4249,401198,662190,754 Total revenue% - 0.17 % 104294,821295,317144,537 Total ownership equity

Generous brothers: The total amount of financing and investment was 2,550,638 thousand SD pounds at the end of the year 2017, compared with the total amount of 1,689,031 thousand pounds at the end of the year 2016. The bank funded various economical sectors namely: industry % 27,71, exports % 25,41, trade % 17,94, services %16,03, agriculture 5,85%, energy and mining % 3,03, transport % 2,52, vocational units % 1,47, others % 0,4. The mode of financing sectors exposed the following results: murabaha % 46,98, musharka %29,87, mugawla % 16,08, mudarabah % 6,71, salam % 0,36.Generous brothers: The bank accomplished its needs and fulfilled all the requirements of the Sudan Central Bank in the aspects of banking technology. The bank introduced the system of (SMS) it’s to the costumers and the payment of money through the mobile, and developed the operation equipment and tested the performance of the branches and departments networks, and established new units and made supplementary reactions and vital alterations to the system of ‘ FATCA ‘ tax compline act. The bank also implemented the email

16

system and executed the required additions and amendments of investment audits. Moreover, the bank provided the Automatic Teller Machines (ATM) with the appropriate servers to avoid centralization, and succeeded in making essential improvements and amendments on (xml) program according to the demand of the Sudan Central Bank, and accomplished all the technical preparations to operate through the electronic gate to offer the services of the electronic payment.Generous brothers: The bank implemented an intensive marketing campaign during the year 2017 targeting the customers reach and introduce the bank new model. The bank entirely sponsored the AlmlaebTV channel to transmit the football matches for the excellent league. It also funded Ramadan competition and paid for the advertisement to make the proper propaganda for its services and products and in order to draw subscribers, the bank made advertisements through Shroog channel, Blue Nile channel and Hilal channel. Also the bank supported Safia hospital, Ahmed Gasim hospital and Bahri Emergency hospital and offered financial aids to mosques, universities, khalws, civil organizations and needy individuals. And concerning the execution of the policy of widespread methodology, vertically and horizontally, the bank inaugurated its new branch in Bahri market place, with modern style of ATM, and enhanced the systems of electronic payment and improved the environment of work by modernizing the branches buildings. The bank concerned with the development of the skills of the human resources. So, the administration implemented (15) training courses at the training center and targeted (318) participants, and executed (11) workshops and seminars that targeted (230) participants. Furthermore, the bank collaborated with various sectors to execute (84) training courses outside the bank and targeted (169) participants. Also the bank was successful in delegating 58 participants for (22) training courses abroad. On the control side, the bank made several workshops to combat money laundry and terrorism and explained the tax complain act (FATCA). The bank offered (229) opportunities for the students in the tertiary level in the universities and colleges. The bank appointed (13) officials and (3) laborers and increased the salaries of workers at the ratio of % 25 in the year 2017 to achieve the job satisfaction. The bank approved the strategic plan for (2018—2022) to verify the following strategic objectives.1- To develop and spread and increase the market exhibits in the internal and external products.2- To renew the structure of the bank in the name, the form and content.3- To increase the value for the shareholders.4- To develop and upgrade the human resources. 5- To check and activate the establishment duties, and to cope with the international banking systems (reengineering). The bank approved several studies in different banking fields and, in particular, the studies that concerned with the increase of the branches of the bank for 2018, 2019 in the strategic plan. The bank continued to offer the macro financing and presented aids and grants to the sectors of education, health, societies, mosques and others with the amount of 1,373,325 Sd pounds to participate in improving the social environment.Generous brothers: The bank held some important meetings and issued the resolutions and instructions on the current topics compliant to the requirements of the quality control, the basic system and the bank regulations.The Main Resolutions and Duties:1- The bank appointed Mr. Salah Mohammed Abdel Rahim to be the General Manager of the Bank.2- The Board of Directors ratified the resolutions of buying pieces of land to establish its new branches in Saggana, Madani, Port Sudan, the industrial area in Khartoum and the industrial area in Bahri, to verify the policy of building the bank branches on the owned land.

17

3- The bank inaugurated the new branch in Bahri and approved the inauguration of several branches of the bank inside and outside Khartoum State. Also the bank established a unit for the bank in the southern harbor of Port Sudan in the range of the geographical wide- spread policy and to draw more customers and gain more deposits and to adopt the policy of financial inclusion suggested by the Sudan Central Bank.4- The bank witnessed the release of the freezing of assets of the International Modern Investment Company to practice its ordinary work.5- The Board of Directors tested the resolutions which were issued by its following committees: - The Board Committee.- Audit and Control Committee.- Policies Committee.- Risks Committee.6- The Board of Directors was contented with the excellence of performance and quality control as a result of activating the control factors of the bank.7- The Board of Directors conformed to the requirements of the Sudan Central Bank and used to send the periodical reports in time.8- The Board of Directors concerned with training and marketing and reckoned considerable funds to support them:- The Training department : 5,171,811 Sd pounds.- The Marketing department : 5,582,148 Sd pounds. 9. the board f directors keeps on following up the collection of bad debts by its committees, thefollowing table illustrated that:

Standard ratioDefault ratioYears % 6 % 2.4631 December 2013% 6% 2.8531 December 2014% 6% 3.2731 December 2015% 6% 3.3031 December 2016% 6% 2.1931 December 2017

Generous brothers : As a conclusion, it gives me great pleasure to send you the warm greetings and the appreciation of the members of the Board of Directors to all the shareholders of the bank for their continual support and also the workers of the bank for their relevant exerted efforts and loyal trends to achieve the current excellence and the witnessed magnificent results. And the appraisal of the bank is directed to the executive management for their perfect performance in executing the policies of the bank. We are thankful to the Shari’a supervisory board, and the Sudan Central Bank for the good orientations, the General Audit for the neutral opinion about the bank financial statements, Deposits Guarantee Fund and the subscribers for their good advice and observations to enhance the performance of the bank, and all praise to Allah the sustainer of the universes.

...... Alssalamu alaikum wa rahmatu Allah wa barakatu ......

el Bagir yousif Mudawwi AhmedChief of Board of Directors

18

fINANCIAl INDICATors (2015 -2017)

2015

2015

2016

2016

2017

2017

YearAmount20151٫863٫84620162٫245٫85520173٫357٫319

YearAmount20151٫547٫84620161٫741٫71320172٫819٫043

2/ Total Deposits

(Thousands SDG)

(Thousands SDG)

1/ Total Assets

19

(Thousands SDG)

(Thousands SDG)

(Thousands SDG)

2015

2015

2015

2016

2016

2016

2017

2017

2017

YearAmount20151٫389٫54220161٫689٫03120172٫550٫638

YearAmount2015190٫7542016198٫6622017249٫401

YearAmount2015144٫5372016295٫3172017294٫821

3/ Total finance

4/ Total Income

5/ The shareholder’s equity

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

1/ The approval of the report of the Board of Directors and Audited financial statements, legal Auditor’s report and sharia’a supervisory board’s report for the year ended 31st December 2017.

2/ The Authorization of the board of Directors to appoint the legal auditor and to determine his fees for the year 2018.

3/ The meeting also approved:

* The board’s recommendation to change the bank’s name from alshamal

Islamic Bank to BALAD BANK.

* The board’s recommendation to increase the authorized capital from 250

million pounds to one billion pounds.

Mohamed Bushra khalafalla Secretary of the Board of directors

resoluTIoNs of THe 28TH sHAreHolDers GeNerAl AsseMBly, AND THe exTrAorDINAry MeeTING HelD oN 11.05.2018

46

1/ Abu Dhabi Islamic Bank- Abu Dhabi2/ Mashreq Bank PSC-Dubai 3/ Arab Bank for Investment and Trade-Abu Dhabi4/ Al Nilein Bank –Abu Dhabi5/ British Arab Commercial Bank- UK6/ Al Baraka Turkish Finance House-Islamic7/Aktif Yatirim Bankasi-Turkey 8/ Banque De Commerce ET De Placements9/ Bank Credit Dnepr10/ Qatar Islamic Bank-Doha11/ Arab Banking Corporation B.S.C. Manama12/ Arab Investment Company-Manama13/ Bahrain Islamic Bank14/ Saba Islamic Bank –Sana’a15/ Bank of Beirut-Beirut16/ Banque Lebanon- Francaise-Beirut17/ Faisal Islamic of Egypt-Cairo18/ Arab Banking Corporation Egypt-Cairo19/ Al Rajhi Banking & I investment Corp 20/ National Commercial Bank-jeddah21/ Send Exchange-Abu Dhabi22/ International Development Exchange-Dubai23/ Arabian Exchange-Dubai

foreIGN CorrespoNDeNTs