Glitnir Bank: The government of Iceland acquires a 75% share in Glitnir

Press release
Reykavik 29 September, 2008

*          The government of Iceland pays 600 million euros  for a
  75% share in Glitnir Bank.
*          New equity will be issued.
*          Customers, bond holders and employees will not be
  affected.
*          The measure strengthens Glitnir's capital ratio and
  liquidity.
*          Lárus Welding has been asked to continue in his role as
  CEO and has agreed to do so.
*          The funding position of the bank deteriorated in a few
  days.
*          The Board of Directors and the Bank's largest shareholders
  have accepted the government's offer.

The government of Iceland has announced that it will acquire a 75%
stake in Glitnir Bank at the price of 600 million euros. This new
equity will be issued today. The Board of Directors and largest
shareholders of Glitnir have accepted the offer subject to the
approval of a shareholders' meeting. Glitnir's funding has been
successful this year despite very challenging market conditions.
Nonetheless, the events unfolding in international financial markets
in the past two weeks have had unforeseen consequences drastically
changing the conditions of Glitnir's short-term funding. In light of
this, the Board of Directors of Glitnir Bank had meetings with the
Central Bank of Iceland to discuss possible solutions to the
challenge that the Bank was facing. These discussions led to the
government of Iceland posing an offer to buy a 75% stake for 600
million euros. The government has asked Lárus Welding to remain in
his role as CEO which he has agreed to. The offer was posed late last
night and a Board meeting was called in Glitnir this morning. At that
meeting it was decided to accept the offer, thus securing a very
strong owner and principal shareholder for the bank.
Glitnir's core operations are solid and the Bank has this year placed
great emphasis on increasing its core earnings. Further, the Bank has
this year successfully increased efficiency and cut costs.

Lárus Welding, Glitnir CEO
,,The Board and Management of Glitnir have diligently worked at
securing the bank's funding in the past months' turbulent markets but
unfortunately the bank saw adverse development in the past few days.
Having the government as an owner strengthens the capital base of the
bank and removes all doubt about Glitnir's financial strength. We
have seen similar things happen in the countries around us, which
reflects the tough position that currently prevails in international
financial markets. Our customers will not be affected by these
changes and Glitnir will continue to place primary emphasis on
providing good and reliable services.  I also believe I can state
that the measures reflect the authorities' strong faith in Glitnir
and are an important part of securing financial stability in the
country. This has changed the landscape of the Icelandic financial
market. Glitnir remains strong as a result."

Þorsteinn Már Baldvinsson, Chairman of Glitnir Bank"I have emphasised incresing efficiency in the bank's operations. I
am sorry that we were not able to solve this as we had initially
planned.  This conclusion, however, secures the bank's future and the
interests of its customers and employees. This is very important to
me. Our people have done a tremendous job in very difficult market
conditions."



For further information:

Bjorn Richard Johansen, MD of Global Corporate Communications,
brj@glitnir.no
and through mobile +47 47 800 100

Sigrun Hjartardottir, Head of Investor Relations, sihj@glitnir.is and
through mobile +354 844 4748

Már Másson, Head of Corporate Communications, mm@glitnir.is and
through mobile +354 844 4990