Kaupthing Bank sells its operation in the Faroe Islands

| Source: Kaupþing banki hf.
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

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