Landsbanki Islands hf. granted a moratorium

 | Source: Landsbanki Íslands hf. Landsbanki Íslands hf. 

LANDSBANKI ISLANDS HF. GRANTED A MORATORIUM
Landsbanki Islands hf. ("Landsbanki") is currently being controlled
by a Resolution Committee appointed by the Icelandic Finance
Supervisory Authority (the "FME") under emergency legislation passed
at the beginning of October. The bank is not in any form of
administration or liquidation process.

The Resolution Committee will continue to run the operations of
Landsbanki Islands hf. with the aim of maximizing the value of the
assets for all creditors (irrespective of their jurisdiction of
residence). To enable Landsbanki to continue to be operated over the
medium term, Landsbanki has sought and obtained a Moratorium under
Icelandic Act No. 161/2002 on Financial Undertakings (which it is
expected will be recognised throughout the member states of the
European Union and the European Economic Area (the "EEA") under the
provisions of the European Directive on Reorganisation and Winding Up
of Credit Institutions).  The main effect of the moratorium will be
that creditors will be prevented from bringing enforcement
proceedings against Landsbanki.  The court has appointed Mr. Kristinn
Bjarnason, a Supreme Court attorney to act as the assistant in
relation to the Moratorium.

Additional information regarding the recently passed Icelandic
legislation (including an English translation) is available on the
FME's website at www.fme.is.  In relation to jurisdictions outside
the EEA where it has material assets, Landsbanki will take whatever
action it can to seek recognition of the Moratorium.  This includes
filing for Chapter 15 protection in the United States.

In relation to the London branch, this is not a separate legal entity
but is a division of Landsbanki.  The current operations of the
London branch and the powers given to local management of the branch
to deal with its customers and vendors will remain in effect
following the Moratorium.  Assets of Landsbanki in the UK are subject
to a freezing order from HM Treasury but the London branch has
subsequently been granted licenses to operate its business by HM
Treasury.  Neither the freezing order nor such licenses will be
affected by the Moratorium and the London branch will continue to be
able operate in the ordinary course of its current business under
such licenses in the same way it did prior to the Moratorium.

None of these developments have any impact on the current operations
of Landsbanki. During the Moratorium, which may continue for a period
of up to 24 months, the Resolution Committee of Landsbanki will
continue to operate as it has been and will endeavor to protect and
maximize the value of the bank's assets and evaluate restructuring
alternatives that will further the Resolution Committee's objectives.

For the avoidance of doubt, the Moratorium has no effect on NBI hf.
which assumed the domestic Icelandic operations of Landsbanki on
October 9, 2008.

Information in relation to Landsbanki can be found at
http://www.landsbanki.com/oldlandsbanki.  For further information,
please contact Landsbanki by e-mail: creditor.info@landsbanki.is.