SPRON hf. - Financial Statement Release

SPRON's Results for the Third Quarter of 2008

Net loss of ISK 3.1 billion after taxes
CAD ratio 10.1%


Highlights from the Third Quarter of 2008:

•  Net losses after taxes of ISK 3.1 billion with all listed holdings marked to
   market. Losses from holdings amounted to 3.5 billion in the third
   quarter of 2008 
•  Net interest income was ISK 1.1 billion, up 47% from the same period in 2007 
•  Net operating income was negative by ISK 2.0 billion
•  Customer deposits up 10% from year-end 2007
•  Customer deposits 45% of loans to customers
•  Loans to customers amounted to ISK 206.5 billion
•  Total assets amounted to ISK 266.6 billion, up 19% from year-end 2007
•  Equity was ISK 10.4 billion
•  Capital adequacy (CAD) ratio was 10.1% The legal minimum is 8%

Events after the third quarter year 2008:

• The international financial crisis and the collapse of the three largest
  banks in Iceland have severely impacted the Icelandic economy.  SPRON's equity
  position has been adversely impacted and the Financial Supervisory Authority
  in Iceland has been notified. Measures are being taken to improve the bank's
  equity position in close co-operation with all major stakeholders.  This work
  is well underway and a conclusion is expected soon. 
• The merger of SPRON and Kaupthing was cancelled after the collapse of
  Kaupthing in October 2008 and subsequently measures were taken to restructure
  SPRON to position it for a different future. 

Gudmundur Hauksson, CEO of SPRON: 
“The results for the quarter reflect the banks status before the collapse of
the three largest banks in Iceland. The bank's loss for the period was ISK 3.1
billion and the equity ratio was 10.1% which is satisfactory in light of the
extremely challenging circumstances in the financial markets.   The collapse of
the banks and subsequent events have adversely affected most financial
companies in Iceland and will affect all companies and individuals in Iceland
one way or another. SPRON is also affected and following the collapse it has
been difficult to estimate the value of assets and other financial figures with
any accuracy. However the bank's management has already taken measures to
strengthen SPRON's position with the long-term interests of the bank in mind in
co-operation with all major stakeholders.  The results of which  will be
announced as soon as possible. ” 

For further information please contact Gudmundur Hauksson CEO, tel: +354 550
1213 or Valgeir M. Baldursson CFO, tel: +354 550 1774.

Attachments:

spron_earnings_release_q3_2008_.pdf

financial statements spron hf. 30.9.08.pdf