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