- new shareholders - savings banks hold 57,3% The two largest shareholders in Icebank, BYR Savings Bank and Reykjavík Savings Bank (SPRON), have decided to reduce their holdings in Icebank to 4% each. Furthermore, three smaller savings banks have decided to sell their total holdings in the Bank. Buyers include the Keflavík Savings Bank (SpKef), Mýrasýsla Savings Bank (SPM), Bolungarvík Savings Bank, Svarfdælir Savings Bank, Vestamannaeyjar Savings Bank, the senior management of the Bank and investors. The transactions are conditional on the consent of foreign lenders to a change in ownership. The savings banks, until now the sole owners of Icebank, will continue to hold a majority share of 57.3% in the Bank following the transaction. The abolishment of all restrictions on ownership in the Bank's Articles of Association and the broadening of the ownership base represent a significant step in the development of the Bank and its further expansion into the domestic and foreign markets. Icebank presented a new strategic vision last year which, among other things, included broadening of ownership and eventual listing of the Bank's shares on the OMX Nordic Exchange Iceland. Since that time, radical changes and consolidations have occurred among Iceland's largest savings banks. At the same time, the number of savings banks has shrunk to 21, and if reported mergers materialise their number will fall to 16 in the near future. Two of Iceland's largest savings banks were, prior to the transaction, the largest shareholders in Icebank with aggregate holdings of 53.2%. If the announced mergers take place, the combined share of these two shareholders would have increased to 60.6%, bringing the share of the four largest shareholders in Icebank, including the Mýrasýsla and Keflavík Savings Banks, to 87.0%. It is not least because of these profound changes in the savings banks sector and the concentration of the shareholders in the Bank that the decision was made to take the step forward now and open the Bank to new shareholders. The principal changes in the ownership of Icebank will be the following: • BYR and its two prospective merger banks reduce their shareholdings from 36.1% to 4.0%. • The shareholdings of SPRON and its subsidiary savings bank decline from 24.6% to 4.0%. • Keflavík Savings Bank (SpKef) increases its shareholdings from 12.2% to 15.2%. • Mýrasýsla Savings Bank (SPM) increases its shareholdings from 8.7% to 11.7%. • Bolungarvík Savings Bank, Svarfdælir Savings Bank and Vestmannaeyjar Savings Bank acquires 1.3% each. • Sudurnesjamenn Investment Company, led by Eiríkur Tómasson and other investors, acquires 8.5%. • Bergið Investment Company, led by Steinthór Jónsson, acquires 7.7%. • Adalsteinn Gunnar Jóhannsson and Sigurdur Smári Gylfason, founders of Behrens Corporate Finance, acquire 4.5% each. • Finnur Sveinbjörnsson, CEO of the Bank, and the managing directors Agnar Hansson, Anna Reynis, Gunnar Svavarsson, Hafdís Karlsdóttir and Ólafur Ottósson, acquire a total of 8.5%. • Other smaller investors acquire 9.0%. The acquisition price and other terms of the transactions are confidential. SPRON Securities acted for the sellers. The Icelandic Financial Supervisory Authority has been informed of the transactions. It is clear that the Mýrasýsla Savings Bank (SPM) will need an approval from the Authority to acquire a qualifying holding in Icebank. As explained earlier, the savings banks will own a 57.3% share in Icebank following these transactions, while new shareholders will own 42.7%. Largest shareholders among the savings banks will be Keflavík Savings Bank (15.2%), Mýrasýsla Savings Bank (11.7%), Vestmannaeyjar Savings Bank (5.3%), Bolungarvík Savings Bank (4.6%), BYR (4.0%), and SPRON (4.0%). A shareholders' meeting will be called in the near future, where a new Board of Directors will be elected. Icebank's business activities have shown significant growth in recent months and years, and the Bank's results have been excellent, with the Bank's total assets tripling since the end of 2004, to ISK 122 billion at mid-year this year. Over the same period, the Bank's equity has grown fivefold, amounting to ISK 16.2 at mid-year this year. The Bank's profit after taxes amounted to ISK 5.7 billion last year, and ISK 4.2 billion in the first half of this year. Return on equity in the first half of this year was 59.5% (annualised). Icebank has in recent months focused on specialised lending activities in Iceland and abroad, as well as forex and derivatives trading in addition to its traditional services to the savings banks. The Bank has gradually been increasing the share of foreign lending projects, and there are plans to increase the weight of overseas business activities still further. Finnur Sveinbjörnsson, CEO: “Opening up the ownership of Bank represents a significant and logical step in Icebank's development, which I believe will greatly benefit the Bank. The change in ownership does not herald any change in the Bank's operation; it is a continuation of the strategy that the Bank had already adopted. Removing restrictions on ownership creates completely new conditions for the Bank to acquire other businesses and reward its staff, both of which will improve the Bank's competitive position. The savings banks have supported the Bank loyally from the start, but recent months have seen more rapid changes in the savings banks sector and in the Bank itself than anyone could have anticipated. In my opinion, the savings banks are showing great vision in opening up the ownership now and attracting new investors to the Bank. It is important, in my view, that the savings banks will all continue as shareholders in the Bank, and it is a source of strength for the Bank that they will retain a majority holding. Even though the Bank will of course continue to play the important role it has performed within the savings bank sector and offer them all kinds of financial services, it has been clear for some time now - as confirmed in the Bank's current strategic vision - that its opportunities for growth lie outside the savings bank sector, in particular outside Iceland.” For further information, please contact: Geirmundur Kristinsson, Chairman of the Board of Directors of Icebank, tel. 421 6600. Finnur Sveinbjörnsson, Icebank CEO, tel. +354 540 4000.