- Kaupthing announces the final phase of the restructuring of its UK business

As the final step in the restructuring of the UK business following Kaupthing's
acquisition of Singer & Friedlander in 2005, Kaupthing Singer & Friedlander
announces that it will be exiting its Asset Finance and Commodity Trade Finance
businesses and that it has made structural changes within its Banking Division. 

Following the restructuring Kaupthing Singer & Friedlander will be purely
focused on providing integrated financial services to small and medium sized
businesses and high net worth individuals through its five core business
segments; Banking, Investment Banking Treasury, Capital Markets and Asset
Management & Private Banking. 

Asset Finance (Corporate Asset Finance, Healthcare Asset Finance and Insurance
Premium Finance) and Commodity Trade Finance are non-core to Kaupthing Singer &
Friedlander and have been operating largely on a standalone basis. Exiting these
businesses will have a positive impact on the cost base and will free up
liquidity in excess of GBP 1 billion (EUR 1,3 billion) in 2008. The capital
released will be reinvested to further grow the core UK business. After the
divestment there is no longer any significant asset finance business within the
Kaupthing group. 

In addition Kaupthing Singer & Friedlander has transferred the Structured
Finance division from Banking into the Acquisition and Leveraged Finance
division within Investment Banking. Kaupthing Singer & Friedlander will also
close its Property and Corporate Banking activities in Leeds and Manchester and
move them to Birmingham and London. 

Ármann Thorvaldsson, CEO of Kaupthing Singer & Friedlander
"These changes are the final steps in the restructuring process following our
acquisition of Singer and Friedlander. We are now focusing our resources and
capital on the core businesses in the UK. I would like to thank the management
and staff of the businesses we are exiting for their contribution to the
success we have experienced in our operation here in the UK." 

For further information please contact:
Jónas Sigurgeirsson, Chief Communications Officer, Kaupthing Bank - tel: + 354
444 6112 
Anita Scott / Nigel Prideaux, Brunswick Group LLP - tel: +44 20 7404 5959