- Kaupthing Bank's results for the first quarter of 2008

Net earnings of ISK 18.7 billion (EUR 184 million)
 
- Shareholders' net earnings of ISK 18.7 billion - ISK 20.3 billion
in same period of 2007
- Annualised return on equity in Q1 of 23.7%
- Earnings per share of ISK 26.1 versus ISK 27.4 in Q1 2007
- Net interest income up by 31.2% from the same period in 2007
- Net fee and commission income down by 11.3% from the same period in
2007
- Net financial income totalled ISK 9.7 billion and decreased by
28.0% from the same period last year
- Operating expenses totalled ISK 21.6 billion in Q1 - an increase of
21.8%  from Q1 2007, but down 17.0% from Q4 2007 measured in euros
- The cost-to-income ratio was 47.0%
- The 29.6% depreciation of the ISK in Q1 2008 has a significant
effect on the Bank's results and all comparisons between periods
- Total assets of ISK 6,368.4 billion (EUR 53.3 billion) at the end
of March, decreasing by 8.7% in euros from the beginning of 2008, but
increasing by 19.1% in ISK
- The CAD Ratio remains strong at 11.4% and the Tier 1 ratio was at
9.1% in the end of Q1
- Since 2005 Kaupthing has maintained a foreign currency mismatch in
order to hedge its equity ratio against the depreciation of the ISK.
The depreciation of the ISK in the first quarter of 2008 resulted in
an increase of ISK 72.5 billion in shareholders' equity
 
Hreidar Már Sigurdsson, CEO"These results are most satisfactory in view of the challenging
conditions on the financial markets. The figures demonstrate
Kaupthing's ability to respond quickly to changing market
circumstances. Operating expenses dropped significantly between
quarters and this trend will continue. Our balance sheet decreased by
9% in euros during the quarter in response to market conditions. The
general quality of the Bank's assets is good, despite the increase in
impairments between quarters. In the current market environment it is
crucially important that we have been able to protect the Bank's
robust liquidity, and this will continue to be the management's key
priority. We are well prepared if the current market situation
becomes protracted but we nevertheless consider our pipeline and
prospects to be satisfactory."
 
Further information
For further information on the results please contact Ólöf Hildur
Pálsdóttir, Deputy Head of Investor Relations, on +354 444 6569
(ir@kaupthing.com) and Frída Filipina Fatalla, Investor Relations.
Information on Kaupthing Bank is also available on the Bank's website
www.kaupthing.com