Kaupthing Bank's results for the first half of 2008

Net earnings of ISK 34.1 billion (EUR 313 million)
- Shareholders' net earnings for the first half of ISK 34.1 billion
(ISK 45.8 billion H1 2007)
- Annualised return on equity of 19.8% in the first half (32.0% H1
2007)
- Core income (net interest income and net fee and commission income)
up by 15.3% to ISK 73.4 billion in the first half (ISK 63.6 billion
H1 2007)
- Deposits increased by ISK 400 billion (EUR 2.7 billion) in the
second quarter
- Deposit to loan ratio up from 36% to 44% in the second quarter
- Shareholders' equity increased by ISK 78.6 billion in the first
half
- The Capital Ratio remains strong at 11.2% and the Tier 1 ratio was
9.3%
- Total assets of ISK 6,604 billion (EUR 53.1 billion) at the end of
June, increasing by 23.5% in ISK but down by 9.0% in euros from the
beginning of 2008
- Shareholders' net earnings for second quarter of ISK 15.4 billion
(ISK 25.5 billion Q2 2007)
- Annualised return on equity for second quarter of 16.1% (36.6% Q2
2007)
- Core income (net interest income and net fee and commission income)
in second quarter up 17.4% to ISK 41.1 billion (ISK 35.0 billion from
Q2 2007)
- Net interest income covers all costs in second quarter
Hreidar Már Sigurdsson, CEO"Kaupthing continues to perform well. Return on equity for the first
half of 2008 was 20% and it is satisfying to see the Bank meet its
ROE target in the face of the upheaval on the financial markets. Our
main achievement has been to successfully protect our equity and
liquidity positions. The Bank's equity hedge and indexed assets have
protected the Bank against the turmoil in the Icelandic economy. We
have made excellent progress in recent months in raising deposits,
which are up 28% in the second quarter, and we are confident that the
Bank will reach its goal of a 50% deposit/loan ratio by the end of
the year. The Bank is therefore well funded and liquidity remains
solid. Kaupthing is susceptible to the turbulence on the
international markets like other banks, and this is underlined by the
lower financial income and higher impairment on loans. However,
Kaupthing's business is well diversified geographically, risk
management is robust and the quality of assets remains good. We
therefore believe our asset portfolio is well able to contend with
the continuing market unrest."

Further information
For further information on the results please contact Frída Filipina
Fatalla, Investor Relations, on +354 444 6192. Information on
Kaupthing Bank is also available on the Bank's website
www.kaupthing.com

About Kaupthing Bank
Kaupthing Bank 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 other countries in 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.