Kaupthing Bank sells its operation in the Faroe Islands

| Source: Kaupthing Bank
Kaupthing Bank "Kaupthing" has sold its operation in the Faroe
Islands to Eik Banki P/F. Eik Banki will take over Kaupthing's
Faroese operation on 31 December 2007.

Kaupthing's operation in the Faroe Islands, which was set up in 2000,
has mainly focused on securities trading, asset management, loans and
other traditional investment banking activities. The Faroese
business, which currently has 30 employees, has performed well in the
past few years. Eik Banki will pay for the operation in cash and will
take over Kaupthing's deposits in the Faroe Islands, as well as the
majority of the loans the Bank has issued there.

The sale of Kaupthing's Faroese operation will have an insignificant
effect on the Group's operations and its balance sheet. The sale is
subject to the approval of standard conditions between the purchaser
and seller.

Hreidar Már Sigurdsson, CEO"The Faroe Islands operation has been performing well in recent years
and I'm convinced that it will continue to do so under its new
owners. With the growing number of Kaupthing offices in mainland
Europe we decided to sell our operation in the Faroe Islands. I would
like to take this opportunity to thank CEO Peter Holm and his staff
in the Faroe Islands for their excellent contribution to Kaupthing
and for their fine achievements."

For further information please contact:
Jónas Sigurgeirsson, Chief Communication Officer - tel. 354 444 6112
or ir@kaupthing.com

About Kaupthing Bank
Kaupthing Bank offers comprehensive commercial and investment banking
services to individuals, companies and institutional investors. The
Bank is a leading player in all the main areas of the Icelandic
financial market, and in addition to Iceland, the Bank's key markets
are Denmark and the United Kingdom. The Bank focuses on the growth
and development of its international activities and aims to be one of
the leading investment banks in northern Europe.

Kaupthing Bank operates in twelve countries with its headquarters
located in Reykjavík. The Bank's main subsidiaries are FIH
Erhvervsbank in Denmark, Kaupthing Singer & Friedlander in the United
Kingdom, Kaupthing Bank Sverige, Kaupthing Bank Luxembourg, Kaupthing
Bank Oyj in Finland, Norvestia Oyj in Finland, Kaupthing New York,
Kaupthing Asset Management in Switzerland and Kaupthing Norge in
Norway. The Bank also has activities in the United Arab Emirates
(Dubai) and Qatar. As of 30 September 2007 the number of full-time
equivalent positions was 3,190 at Kaupthing Bank and its
subsidiaries. www.kaupthing.com