Subject: Base Rate increase

Dear Valued Customer,

As you may be aware, with the global tightening of liquidity due to the financial crisis there has been a recent upward trend in international and local benchmark rates. In a considered response to this, we are revising Sakana’s benchmark (base) rate and implementing a 1.25% increase across retail and commercial mortgage financing with immediate effect. Accordingly, the new benchmark for retail will increase from 8.50% to 9.75%, and for commercial from 9.50% to 10.75%.

Sakana’s cost of funding is guided currently by the BIBOR (Bahrain Interbank Offered Rate) plus a margin that is charged by banks. In light of the credit crunch, both have witnessed a significant increase. The BIBOR alone has crept up by approximately 0.85% (85 basis points) since February 2008, also the time of Sakana’s last rate revision, when it reduced its base rate by 0.50% (50 basis points), one of the few institutions to do so at that time.

We have kept our rates steady for as long as we could, but we are operating under unprecedented conditions and, therefore, have to make realistic decisions. Keeping in mind that this is going to increase your monthly installment, we have absorbed some of the cost of funding increase, and, for the moment, we are only passing on part of the increase to you. We will be monitoring the situation closely in the coming months.

As an example, the monthly repayment will increase by approximately BD 85 per month on a qualifying mortgage of BD 100,000 taken over 20 years.

Despite this increase, we believe that our rates remain competitive in the market compared to current offerings by some other mortgage institutions.

The increase will be applied as below:

* For new customers walk-in from today – immediate
* For customers approved earlier, but not yet disbursed - immediate
* For customers financed on an Ijara basis (fully disbursed) – applied to the new lease period falling due from 6 November 2008
* For customers financed on a Forward Ijara and Musharaka basis (partly disbursed) – applied to the next installment date falling due from 6 November 2008.
* For Murabaha customers (fully disbursed) - no change in profit rate as the sale price is already fixed and agreed.
* For Fix-Flexi and fixed rate deal customers – as per contract

Thank you for your continued support and if you have any other queries please do not hesitate to contact us in any of the following ways – by calling us on 17 20 19 20, by talking to your customer advisor, or by visiting any of our service centres and we will be more than willing to assist you. It is our pleasure and privilege to have you as our customer.

Yours sincerely,

For Sakana Holistic Housing Solutions BSC (c)