Landsbanki Divest European Investment Banking Platform for EUR 380m

On 30 September 2008, Landsbanki signed an agreement with Straumur
Investment bank to divest Landsbanki's corporate finance and
securities brokerage platform in Europe.  The consideration of EUR
380m (ISK 55.4bn) will result in no material loss or gain for
Landsbanki. The sale includes Landsbanki Securities (UK) Ltd in the
UK, Landsbanki Kepler SA in Continental Europe and the bank's 84%
holding in Merrion Landsbanki Ltd in Ireland. The agreement is
subject to approval by the regulatory authorities in the respective
jurisdictions where the companies operate.

The transaction will strengthen Landsbanki's Tier1 capital ratio as
EUR 380m (ISK 55.4bn) of equity was allocated to divested operations.
Landsbanki will streamline its remaining international platform,
strengthening overall operations and achieve considerable cost
efficiencies.

The transaction will enable both companies to leverage their core
competencies and infrastructure, while continuing to build on
existing and new relationships.

Following this transaction, Landsbanki will consolidate its corporate
and commercial banking operations in Europe through its overseas
banks and branch network. Strategic focus will be directed at the
bank's core banking operations such as asset backed lending, niche
specialty finance and retail deposit programs, anchored in its
domestic universal bank. Landsbanki is thereby pursuing a more
focused banking model, generating increasingly diversified and stable
recurring revenues.

At the 1H08 results presentation, Landsbanki stated its key
objectives in 2008-9 to continue to strengthen core income and
operational fundamentals. This transaction is an important milestone
in the pursuit of these stated goals.



For further information please contact:

  * Landsbanki CEOs Halldór J. Kristjánsson and Sigurjón Þ. Árnason,
    tel. +354 410 4009
  * Landsbanki Investor Relations - Tinna Molphy, Head of Investor
    Relations, ir@landsbanki.is and tel. +354 410 7200 / mobile +354
    861 1440
  * Landsbanki Media Relations - Andrew Walton, Financial Dynamics,
    tel. +44 20 7269 7204 / mobile +44 7711 264 157