Kaupthing Bank s results for the first nine months of 2007

Net earnings of ISK 60.2 billion (EUR 683 million)

- Shareholders' net earnings for the first nine months of ISK 60.2
billion, increasing by 31.3% compared with the same period in 2006.
Earnings decreased, however, by 10.5% between periods taking into
account the one-off after-tax profit of ISK 21.4 billion related to
Exista in the third quarter of 2006
- Shareholders' net earnings in the third quarter of ISK 14.4
billion, increasing by 3.0% from the third quarter of 2006. Earnings
decreased, however, by 59.3% between periods taking into account the
one-off after-tax profit of ISK 21.4 billion related to Exista in the
third quarter of 2006
- Return on equity for the first nine months of 27.5% on an
annualised basis. Earnings per share of ISK 82.6
- Net interest income in the third quarter up by 59.7% YoY to ISK
20.3 billion
- Net fee and commission income in the third quarter grew by 75.2%
YoY to ISK 13.4 billion
- Financial loss in Treasury of ISK 6.9 billion in the third quarter,
primarily due to the decrease in the fair value of derivative
contracts, bonds and asset-backed securities
- Total assets of ISK 4,889.9 billion (EUR 55.6 billion) at the end
of September 2007, increasing by 27.7% at a fixed exchange rate from
the beginning of the year and by 20.6% in ISK
- On 15 August 2007 the Bank signed an agreement to acquire the Dutch
bank NIBC for EUR 3 billion, expected to complete by the end of the
year
- The board of directors will seek approval at a shareholders'
meeting to issue new shares in the Bank and to sell them in a
pre-emptive rights issue during the fourth quarter 2007
- The board of directors plans to change the Bank's functional
currency into the euro as of January 2008, in accordance with IFRS
- The board of directors will propose at the shareholders' meeting
that the Bank's shares be redenominated in euros

Hreidar Már Sigurdsson, CEO"Kaupthing's activities have been characterised by robust growth and
we continued to strengthen our position in the third quarter. Trends
in interest income and fee and commission income are most
encouraging; interest income was up 60%, while fee and commission
income grew by 75% in the third quarter compared with the same period
last year. The international financial markets experienced
considerable unrest during the quarter, but it is good to see that
our strategy of risk diversification enabled us to achieve 19% return
on equity during the quarter. The Bank is performing well and results
were particularly strong in corporate banking and investment banking.
I believe that 2007 will prove to be another excellent year for
Kaupthing Bank."

Further information
For further information on the results please contact Jónas
Sigurgeirsson, Chief Communications Officer on +354 444 6112 or Ólöf
Hildur Pálsdóttir, Deputy Head of Investor Relations, on +354 444
6569 (ir@kaupthing.com). Information on Kaupthing Bank is also
available on the Bank's website www.kaupthing.com.


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 twelve 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 Oyj in Finland, Norvestia Oyj in Finland, Kaupthing New York,
Kaupthing Asset Management in Switzerland and Kaupthing Norge in
Norway. The Bank also has activities in the United Arab Emirates
(Dubai) and Qatar and operates a branch in the Faroe Islands. As of
30 September 2007 the number of full-time equivalent positions was
3,190 at Kaupthing Bank and its subsidiaries.