Landsbankinn hf. - Company Announcement

Landsbankinn hf.: Landsbankinn sells its holding in Borgun hf.

Landsbankinn has today signed an agreement to sell its 31.2% holding in Borgun
hf.  The sale price is ISK 2,184 million. The purchaser is a diverse group of
investors along with a company owned by the management of Borgun. Borgun is a
leader in the development and practical application of solutions in the field
of electronic payments. These changes will not affect the customers of Borgun
or its operations. In compliance with law, the sale is subject to the approval
of regulators. 

Steinthór Pálsson, CEO of Landsbankinn: "In the past years, Landsbankinn has
had a minority holding in Borgun, with Íslandsbanki holding the majority of
shares. A settlement with the Icelandic Competition Authority from 2008
severely limits Landsbankinn's involvement in the activities of Borgun as a
shareholder. It has, moreover, been the aim of competition authorities to limit
shareholding by banks in each payment card company to one bank at any given
time.  This position was not in the interest of Landsbankinn and we consider
this transaction a positive solution for the Bank, the company and the new
owners."Magnús Magnússon, representative of Eignarhaldsfélag Borgunar slf:"Stakeholders in Eignarhaldsfélag Borgunar slf. are pleased with the purchase
and the entire process has been extremely successful.” 

Haukur Oddsson, CEO of Borgun: "We at Borgun view this change in ownership as a
positive development. Landsbankinn has been a dependable yet very distant
shareholder, bound as it was by the 2008 settlement with the Icelandic
Competition Authority that severely limited its involvement in operations. This
transaction is in line with developments in neighbouring countries, where banks
have been selling their shares in payment card companies as such activities are
no longer considered a part of core operations.” 

For further information, contact:

On behalf of Landsbankinn: Kristján Kristjánsson, pr@landsbankinn, +354 410
4011/+354 899 9352 

On behalf of Borgun: Haukur Oddsson, CEO, ho@borgun, +354 560 1600

On behalf of the buyers: Magnús Magnússon , magnus@orbis-invest.com, +354 615
0065