SOURCE: Landsbanki Íslands hf

October 10, 2006 02:07 ET

Landsbanki Launches Icesave in the United Kingdom

REYKJAVÍK, UK -- (MARKET WIRE) -- October 10, 2006 --


Landsbanki today announces the launch of "Icesave", a savings business offering a highly competitive interest rate in the UK market. Initially Icesave will introduce an easy-access on- line savings account in the UK market (www.icesave.co.uk). Following this, Icesave will introduce a broader selection of new savings products.

The introduction of Icesave is part of Landsbanki's continuing expansion into the UK market, which Landsbanki has defined as its most important market outside Iceland. The bank has seen significant growth in its current UK based wholesale and retail deposits businesses, offered through the London Branch since 2005 and Heritable Bank since 2003.

The introduction of Icesave in the UK follows Landsbanki's recent acquisition of a deposit-taking operation in Guernsey. The deposits raised by Icesave and the Guernsey operation will provide Landsbanki with an exciting opportunity to further diversify its funding strategy as the bank continues its UK expansion. Additionally, Landsbanki will continue to explore further opportunities to increase its international deposit business, both through retail and wholesale deposit initiatives to further support the bank's international growth. With Icesave and other deposit initiatives Landsbanki aims to increase the deposit funding ratio over a period of two to three years.

The brand name "Icesave" is a trading name of Landsbanki Islands hf. Icesave will be operated in the UK through the bank's London branch, based on the successful experience of Heritable Bank in UK deposit-taking. In that respect the bank has appointed Mark Sismey-Durrant, CEO of Heritable Bank, to oversee "Icesave" in addition to his current responsibilities.

"We are proud to announce the launch of Icesave today. It builds on the already successful deposit taking business in the UK, which strengthens our funding structure" said Halldór J. Kristjánsson CEO of Landsbanki. Sigurjón Þ. Árnason, CEO of Landsbanki said: "We think that this concept, covering a line of excellent savings products for investors with consistently competitive interest rates, will be well received both in the UK and elsewhere where we may take the product".

Landsbanki Islands hf. was established in 1885 and is Iceland's oldest full-service commercial bank, playing an important role in Iceland's growing economy. Landsbanki currently has the leading share in most segments of the Icelandic banking market operating 40 branches in Iceland offering universal financial services to households, corporations and institutional investors. Outside of Iceland the bank has operations in fourteen countries, including all the major financial centres of Europe offering clients a full range of securities and corporate investment banking services. Landsbanki is rated by Moody's (A2 / P-1 / C) and Fitch (A / F1 / B/C). Headquartered in Reykjavik, Iceland, Landsbanki is traded on the ICEX Icelandic stock exchange under the symbol < LAIS IR > .

For further information:
Landsbanki CEOs:

Halldor J. Kristjansson
tel: +354 820 6399
and
Sigurjon Th. Arnason
tel: +354 898 0177

Financial Dynamics:

Andrew Walton
tel: +44 20 7269 7204
mob: +44 7711 264 157

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