Published: May 07, 2008

Glitnir Bank First Quarter Results for 2008

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ISK 7.7 billion (EUR 76m) profit after tax; Total recognised income in equity ISK 28.4bn (EUR 280m); Strong liquidity position EUR 8.7

Glitnir Financial Highlights

--  Profit before tax was ISK 7.7bn up 102% from Q4 07
--  Net operating income highest ever, ISK 25.6bn up 29% from Q4 07
--  Net interest income ISK 13.8bn, up 16% from Q4 07
--  Fees and commissions were strong, ISK 10.6bn a slight increase from Q4
    07
--  Positive development in expenses, down 12% from Q4 07 to ISK 13.8bn
--  The real growth of the loan portfolio was 4% in Q1 08
--  Liquidity position strengthened to EUR 8.7bn
--  CAD ratio strong at 11.0%, and Tier 1 ratio at 7.7%

Operational Highlights

--  Core earnings continue growth phase, growing 12.6% on average (CQGR)
    from Q1 07
--  Core profit before tax[1] growing 46% QoQ and 21% YoY
--  Cost income ratio down to 54% from 79% in Q4 07
--  Strong performance by Capital Markets, Corporate Banking and
    Investment Banking units in Q1 08
--  A healthy pipeline of deals in the Niches and ECM, niches with 60% of
    advisory fees in Q1 08
--  Capital Markets in Iceland capitalising on the volatility from FX and
    securities
--  Glitnir the 2nd largest broker in the Nordic region, gaining market
    share to an all time high of 7.37%

Lárus Welding, Chief Executive Officer says: "Glitnir performed well in the first quarter through a very challenging market conditions for all financials. In spite of these conditions, Glitnir has demonstrated its inherent strengths and these results confirm the Bank's underlying resilience and flexibility. Net operating income was at a record high and we experienced solid growth in our core operations. Our focused niche strategy is successful with 60% of our advisory fees being niche related. Management has a clear strategic focus on the cost base and operating costs have decreased by 12% since Q4 last year. Furthermore, we have been able to strengthen our liquidity position and capital ratios during a period of significant global market stress. It has been necessary for all financial institutions to focus on increasing internal efficiencies to provide consistent levels of profitability and to increase competitiveness. The second quarter will see a continuing focus on increasing income, preserving our liquidity position whilst managing our cost base."