Euromoney Ranks Glitnir "Best Bank" in Iceland

Market Wire, July, 2006

The leading bank and finance publisher Euromoney PLC ranks Glitnir "Best Bank" in Iceland in its new report. Euromoney released its yearly ranking of the finance sector today. "Glitnir's business model is more conducive to sustainable profitability than its peers," states Euromoney. "We are proud to be ranked the best bank based in Iceland," comments Bjarni Ármannsson, CEO of Glitnir. "This is further proof that our focused business strategy and transparent communications are well regarded by the market," comments Mr. Ármannsson.

Euromoney comments on the positive development in Glitnir's CDS (credit default swap) spreads in comparison to the other Icelandic banks as an indicator of good banking practices. "The performance of Glitnir's CDS spreads this year, relative to its competitors Kaupthing and Landsbanki, is a good barometer of the strength of its franchise as well as its management during the crisis that hit the Icelandic banking system in the first quarter of 2006. That performance also reflected the widespread belief that the bank previously known as Íslandsbanki has a business model that is more conducive to sustainable profitability than its peers," writes Euromoney.

"With net profits tripling in the first quarter of 2006 and return on equity reaching 42 percent, that perception appears to be warrant. Affirming the bank's A- long-term rating at the end of March, Standard & Poor's forecast that Glitnir would "maintain profitability at comfortable levels, even in a less favourable economy environment of higher loan losses and lower financial gains." When S&P changed its outlook on Iceland from stable to negative in the beginning of June, the agency was quick to advise that the revision would have no impact on Glitnir's rating," writes Euromoney.

"Glitnir has a low cost-income ratio (38%) and a well diversified loan book, with some 60% of its profits now generated abroad and its continued diversification into the Norwegian market helps to disperse overall risk exposure. A potential weakness is that Glitnir is highly dependent on wholesale funding, although less so than Kaupthing. But bankers say Glitnir responded more quickly than its peers to the pressures that mounted early in 2006. While the others were caught napping, Glitnir moved quickly to diversify into alternative funding sources such as the Canadian and Australian dollar markets," states Euromoney in its 2006 Award for Excellence report.

About Euromoney

Euromoney Magazine, founded in 1969, is the flagship publication of Euromoney Institutional Investor PLC, a leading international business-to-business publisher in the FTSE 250 with revenues in excess of £195 million. Euromoney publishes more than 100 specialist business magazines, newsletters and journals, comprehensive research guides, directories and books focusing on the international finance, law, energy and transport sectors. Euromoney also produces and runs a wide-ranging international portfolio of business conferences, events, seminars, training courses and exhibitions on financial and related topics and are a leading provider of electronic business information through its databases and information services. Euromoney has offices in more than 20 countries, including London, Paris, New York, Hong Kong and Singapore.

About Glitnir

Glitnir is a leading financial group that offers universal banking. Services include corporate and investment banking, stock trade and capital management. The bank has a branch in London in the UK and in Copenhagen in Denmark. Glitnir has an office in Halifax in Canada. Glitnir is the sole owner of banks in Luxembourg and Norway (BNbank, Glitnir bank, Glitnir Securities and Glitnir Kapitalforvaltning, the factoring company Glitnir Factoring, and 50.1 % of the Union Group). Glitnir owns the leading Nordic stockbroker firm Fischer Partners in Stockholm in Sweden. Glitnir plans to open an office in Shanghai in China in 2006. Glitnir is listed on the Icelandic Stock Exchange and has a market capitalization of approximately EUR 3 billion. Glitnir recently announced record profit for first quarter of 2006 - the best quarter in the bank's history. Total assets per 31 March 2006 were ISK 111 370 billion. The record after-tax profit was ISK 9.1 billion in Q1 2006, as compared to ISK 3.0 billion in Q1 2005, increasing by 200 per cent. For more information: www.glitnirbank.com

Image Available: http://www.marketwire.com/mw/frame_mw?attachid=297231

Contact: Glitnir Headquarters +354 440 4500