Published: November 20, 2007
Glitnir Bank Ratings Unaffected by Republic of Iceland Outlook Revision

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)
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