Published: November 20, 2007

Glitnir Bank Ratings Unaffected by Republic of Iceland Outlook Revision

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Glitnir Bank's rating is unaffected by S&P's revision of the outlook on the ratings on the Republic of Iceland to negative from stable.

"Moreover, the ratings on the bank are underpinned by its strong domestic franchise, as well as by geographic diversification through its growing presence in Norway, Sweden, and Finland," says S&P's report. "They also recognize the bank's consistently high profitability and current good asset quality, both in Iceland and elsewhere. The ratings continue to reflect S&P's view that Glitnir Bank's liquidity management is prudent and transparent, even though the bank remains highly reliant on wholesale foreign currency funding."

S&P continues: "Given the bank's increased geographical and product diversification, the ratings reflect our expectation that it should be able to maintain profitability at comfortable levels, despite Iceland's challenging economic environment and the potential for higher loan losses and lower financial gains. A negative rating action could follow, however, if a further economic slowdown in Iceland were to lead to a significant increase in the bank's loan losses and a deterioration in its asset quality."

S&P's reports are attached.

Iceland sovereign press release 20 nov 2007 (http://hugin.info/133924/R/1169767/230392.pdf)

HFF press release 20 nov 2007 (http://hugin.info/133924/R/1169767/230393.pdf)

Glitnir Bulletin 20 nov 07 (http://hugin.info/133924/R/1169767/230395.pdf)