Kaupthing Bank's results for 2007

Net earnings of ISK 70.0 billion (EUR 799 million)

- Shareholders' net earnings for 2007 of ISK 70.0 billion - (ISK 85.3
billion in 2006)
- Shareholders' net earnings for fourth quarter of ISK 9.8 billion -
(ISK 18.1 billion in same period of 2006)
- Return on equity in 2007 of 23.5%.
- Earnings per share of ISK 95.2 (ISK 127.1 in 2006). Earnings per
share for fourth quarter of ISK 13.4 (ISK 26.1 in Q4 2006)
- Net interest income in the fourth quarter up by 60.3% YoY to ISK
23.7 billion
- Net fee and commission income in the fourth quarter grew by 19.0%
YoY to ISK 14.1 billion
- Financial loss in Treasury of ISK 11.6 billion in the fourth
quarter, primarily due to the decrease in the fair value of
derivative contracts, bonds and asset-backed securities
- Total assets of ISK 5,347.3 billion (EUR 58.3 billion) at year-end,
increasing by 35.8% at a fixed exchange rate during the year and by
31.9% in ISK
- Deposits as a percentage of total loans to customers increased
significantly in 2007, from 29.6% at the beginning of the year to
41.8% at the end of the year
- In light of the instability on the financial markets, Kaupthing
Bank and the sellers of NIBC have announced their decision not to
proceed with the proposed acquisition by Kaupthing Bank of NIBC
- The Board of Directors will propose at the shareholders' meeting
that a dividend of ISK 14,810 million be paid out for 2007,
corresponding to ISK 20 a share, or 21% of net earnings.

Hreidar Már Sigurdsson, CEO"Kaupthing enjoyed a good 2007; the year started particularly
strongly but the downturn on the international financial markets left
its mark on the second half of 2007. Return on equity was 23.5%, a
most satisfactory figure. The Bank is performing well in all its core
business areas, and interest income during the fourth quarter was the
highest yet recorded.

The adverse operating environment has led to a shift in focus in
operations, and the growth of the Bank's balance sheet is set to slow
down this year. Management's prime focus is now on generating
commission income and maximising efficiency. Funding is being
diversified and the Bank is now placing increasing emphasis on
deposits. A new online deposit bank was introduced during the fourth
quarter, Kaupthing Edge, which has already been launched in five
countries. In the last four months, almost 30,000 customers have
placed deposits with the Bank.

Kaupthing has reached an agreement with J.C. Flowers not to proceed
with the acquisition of Dutch bank NIBC owing to the negative
situation on the financial markets. The planned share issue will
therefore no longer be taking place. While this development is
disappointing for the Bank's stakeholders, the decision nevertheless
significantly reinforces Kaupthing's liquidity position, which is now
very robust."

Further information
For further information on the results please contact Jónas
Sigurgeirsson, Chief Communications Officer on +354 444 6112 or Ólöf
Hildur Pálsdóttir, 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 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
United Arab Emirates (Dubai) and Qatar. As of 31 December 2007 the
number of full-time equivalent positions was 3,334 at Kaupthing Bank
and its subsidiaries. www.kaupthing.com