Kaupthing Banks Results for First Quarter of 2008

Kaupthing Bank (www.kaupthing.com) has announced its results for the first quarter of 2008.

Net earnings of ISK 18.7 billion (EUR 184 million)

* Shareholders' net earnings of ISK 18.7 billion - ISK 20.3 billion in same period of 2007

* Annualised return on equity in Q1 of 23.7%

* Earnings per share of ISK 26.1 versus ISK 27.4 in Q1 2007

* Net interest income up by 31.2% from the same period in 2007

* Net fee and commission income down by 11.3% from the same period in 2007

* Net financial income totalled ISK 9.7 billion and decreased by 28.0% from the same period last year

* Operating expenses totalled ISK 21.6 billion in Q1 - an increase of 21.8% from Q1 2007, but down 17.0% from Q4 2007 measured in euros

* The cost-to-income ratio was 47.0%

* The 29.6% depreciation of the ISK in Q1 2008 has a significant effect on the Bank's results and all comparisons between periods

* Total assets of ISK 6,368.4 billion (EUR 53.3 billion) at the end of March, decreasing by 8.7% in euros from the beginning of 2008, but increasing by 19.1% in ISK

* The CAD Ratio remains strong at 11.4% and the Tier 1 ratio was at 9.1% in the end of Q1

* Since 2005 Kaupthing has maintained a foreign currency mismatch in order to hedge its equity ratio against the depreciation of the ISK. The depreciation of the ISK in the first quarter of 2008 resulted in an increase of ISK 72.5 billion in shareholders' equity

Hreidar Mr Sigurdsson, CEO

"These results are most satisfactory in view of the challenging conditions on the financial markets. The figures demonstrate Kaupthing's ability to respond quickly to changing market circumstances. Operating expenses dropped significantly between quarters and this trend will continue. Our balance sheet decreased by 9% in euros during the quarter in response to market conditions. The general quality of the Bank's assets is good, despite the increase in impairments between quarters. In the current market environment it is crucially important that we have been able to protect the Bank's robust liquidity, and this will continue to be the management's key priority. We are well prepared if the current market situation becomes protracted but we nevertheless consider our pipeline and prospects to be satisfactory."

Further information

For further information on the results please contact lf Hildur Plsdttir, Deputy Head of Investor Relations, on +354 444 6569 (ir @ kaupthing.com) and Frda Filipina Fatalla, Investor Relations. Information on Kaupthing Bank is also available on the Bank's website www.kaupthing.com.

About Kaupthing Bank

Kaupthing Bank (www.kaupthing.com) is a Northern European bank offering integrated financial services to companies, institutional investors and individuals. These services include corporate and retail banking, investment banking, capital markets services, treasury services, asset management and comprehensive wealth management for private banking clients.

The Bank operates in all of the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) and in 6 countries in mainland Europe (the UK, Luxembourg, Belgium, Switzerland, Germany and the Isle of Man), as well as the US, the Dubai International Financial Centre (DIFC) and the Qatar Financial Centre (QFC). In Denmark, Kaupthing Bank operates under the name FIH Erhvervsbank. As of 31 December 2007 the number of full-time equivalent positions was 3,334 at Kaupthing Bank and its subsidiaries. www.kaupthing.com

Condensed Consolidated Interim Financial Statements (http://hugin.info/133944/R/1214652/253569.pdf)

Press Release Q1 2008 (http://hugin.info/133944/R/1214652/253571.pdf)

Kaupthing Banks Results for First Quarter of 2008

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Kaupthing Banks Results for First Quarter of 2008

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