Kaupthing Bank reports net earnings of ISK 49.3 billion (EUR 659 million) in 2005

REYKJAVIK, 26 January 2006. Kaupthing Bank hf. (ICEX/OMX: KAUP) reported net earnings of ISK 14,786 million (EUR 198 million) for the fourth quarter of 2005 and net earnings of ISK 49,260 million (EUR 659 million) for 2005 as a whole. Earnings per share during the fourth quarter amounted to ISK 22.4 compared with ISK 7.3 per share during the fourth quarter of 2004 and ISK 14.8 per share during the third quarter of 2005. Earnings per share in 2005 amounted to ISK 75.2, compared with ISK 35.6 in 2004. Return on equity for 2005 was 34.0%, compared with 25.5% in 2004.

Business highlights

* Net shareholders’ earnings increased by 178.2% between years.
* Net shareholders’ earnings during the fourth quarter of 2005 increased by 220.5% from the same quarter in 2004.
* Earnings per share in 2005 amounted to ISK 75.2 compared with ISK 35.6 in 2004.
* Net operating income for 2005 totalled ISK 101.9 billion ((EUR 1,364 million), an increase of 103.9% from 2004.
* Operating expenses were ISK 34.7 billion ((EUR 465 million) in 2005, increasing by 47.0% from 2004.
* Total assets amounted to ISK 2,541 billion ((EUR 34.0 billion) at year-end 2005, an increase of 63.5% compared with 2004.
* All of the Bank’s main offices posted record results for 2005.
* 70% of the Bank’s income in 2005 was generated outside Iceland.
* The Board of Directors of the Bank will submit a proposal to the Annual General Meeting recommending that shareholders be paid dividends amounting to ISK 6,646 million ((EUR 89 million) for the operating year 2005, or ISK 10 per share, which corresponds to 13.5% of the profit.

CEO’s comment

Hreidar Már Sigurdsson, CEO:
“We are most satisfied to report another record year for the Bank, with all of our main offices posting record profits. During the year we took many important steps towards our goal of making the Bank a strong northern European bank. Looking ahead to 2006 we are confident that our growth strategy will continue to create opportunities for our clients, and serving their needs will remain our key focus.”

Presentation of results
A presentation for Icelandic shareholders and market participants will be held on Thursday 26 January at 4:15pm at the headquarters of Kaupthing Bank at Borgartún 19 in Reykjavík. Hreidar Már Sigurdsson, CEO of Kaupthing Bank, will present the Bank’s results and answer questions.

A presentation for Swedish shareholders and market participants will be held in Stockholm on Friday 27 January at 12 noon Swedish time (11:00 Icelandic time) at the offices of Kaupthing Bank Sverige in Stockholm. Hreidar Már Sigurdsson, CEO of Kaupthing Bank, will present the Bank’s results and answer questions. It will be possible to follow events at the meeting in real-time via the following link: www.kaupthing.net or by calling + 46 8 598 062 47 to participate in the meeting and ask questions. Information will be available after the meetings on the website of Kaupthing Bank www.kaupthing.net, the website of the Iceland Stock Exchange www.icex.is and on www.huginonline.com

Information on Kaupthing Bank is also available on the Bank’s website www.kaupthing.com

Publication of next results
Interim accounts for the first quarter of 2006 27 April 2006
Interim accounts for the second quarter of 2006 26 July 2006
Interim accounts for the third quarter of 2006 27 October 2006
Interim accounts for the fourth quarter and annual accounts for 2006 30 January 2007

Annual General Meeting and annual report
Kaupthing Bank will hold its Annual General Meeting on Friday 17 March 2006 at Borgarleikhus, Iceland.

The Bank’s annual report for 2005 will be released at the beginning of March 2006.


Kaupthing Bank offers comprehensive commercial and investment banking services to individuals, companies and institutional investors. The Bank is a leading player in all the main areas of the Icelandic financial market, and in addition to Iceland, the Bank’s key markets are Denmark and the United Kingdom. The Bank focuses on the growth and development of its international activities and aims to be one of the leading investment banks in northern Europe.

Kaupthing Bank operates in ten countries with its headquarters located in Reykjavík. The Bank’s main subsidiaries are FIH Erhvervsbank in Denmark, Singer & Friedlander and Kaupthing Ltd in the United Kingdom, Kaupthing Bank Sverige, Kaupthing Bank Luxembourg, Kaupthing Bank Oyj in Finland, Norvestia in Finland, Kaupthing Føroyar, Kaupthing New York, Kaupthing Asset Management in Switzerland, Kaupthing Norge in Norway, Arion and KB Líftryggingar hf. in Iceland. A2005 the number of full-time equivalent positions was 2,368 at Kaupthing Bank and its subsidiaries.

Contact Information

Jónas Sigurgeirsson

Chief Communications Officer

Kaupthing Bank

Contact via E-mail