Kaupthing postpones the change of the functional currency until January 2009

In accordance with IFRS standards the Board of Directors of Kaupthing
Bank decided last year to change the functional currency of the Bank
to the euro from the beginning of 2008.

The importance of the euro in the Bank's operations has increased in
recent years and will continue to do so. At present less than 13% of
the Bank's total assets and less than 11% of total debt are in ISK.

The Board is still determined to change the functional currency to
the euro to ensure that the Bank's accounts give at all times a true
and fair view of the consolidated financial position of the Bank. The
application process has however taken more time than expected and at
this point, more than two months into the current accounting year, it
will be difficult to change the functional currency as of 1 January
2008, also in view of the current market turbulence.

At the Annual General Meeting the Board of Directors of the Bank has
submitted a proposal which authorises the Board of Directors to
decide to have the Bank's share capital denominated in euros instead
of Icelandic krónas. It is expected that settlement of trading with
shares denominated in a currency other than the ISK will be possible
in Iceland before the end of 2008. The Board of Directors considers
it appropriate to change the functional currency and to denominate
the share capital in euros at the same time.

In view of the above, the Bank has decided to postpone the change of
the functional currency to the euro until January 2009 and to
withdraw the current application.

Further information:
Jónas Sigurgeirsson - Chief Communications Officer, +354 444-6112

About Kaupthing Bank
Kaupthing Bank offers comprehensive commercial and investment banking
services to individuals, companies and institutional investors. The
Bank is a leading player in all the main areas of the Icelandic
financial market, and in addition to Iceland, the Bank's key markets
are Denmark and the United Kingdom. The Bank focuses on the growth
and development of its international activities and aims to be one of
the leading investment banks in northern Europe.

Kaupthing Bank operates in thirteen countries with its headquarters
located in Reykjavík. The Bank's main subsidiaries are FIH
Erhvervsbank in Denmark, Kaupthing Singer & Friedlander in the United
Kingdom, Kaupthing Bank Sverige, Kaupthing Bank Luxembourg, Kaupthing
Bank in Finland, Norvestia Oyj in Finland, Kaupthing New York,
Kaupthing Switzerland, Kaupthing Bank Belgium and Kaupthing Bank
Norge in Norway. The Bank also has activities in Isle of Man, the
Dubai International Financial Centre (DIFC) and the Qatar Financial
Centre (QFC). As of 31 December 2007 the number of full-time
equivalent positions was 3,334 at Kaupthing Bank and its
subsidiaries. www.kaupthing.com