Sparisjóður Mýrasýslu - Company Announcement

- SPM reaches deal with largest creditors and sells all its assets to New Kaupthing

On 27 March the largest creditors of Sparisjóður Mýrasýslu ("SPM") agreed to a
proposal on the financial restructuring of the bank. SPM subsequently opened
discussions with New Kaupthing in order to ensure that SPM was able to continue
to provide services to its customers and to serve the interests of the
community. 

On the basis of the agreement with the largest creditors SPM has sold its
assets to New Kaupthing. The bank will pay for the assets with bonds and by
issuing new shares in accordance with the proposal accepted by the largest
creditors. At the same time New Kaupthing will acquire all guarantee capital in
SPM. This agreement is dependent on the final approval of the Financial
Supervisory Authority in Iceland. 

With this transaction, New Kaupthing is taking over all assets and liabilities
of SPM, including deposits, which are fully guaranteed. New Kaupthing is taking
over the operations of SPM in Borgarnes. The branches of New Kaupthing and SPM
in Borgarnes are scheduled to be merged in the next few weeks. Bernhard Þór
Bernhardsson, CEO of SPM, will manage the merged branch of SPM and New
Kaupthing. 

This ensures that there will be no disruption to the services provided to SPM's
customers. 

New Kaupthing will also acquire SPM's subsidiaries, including Afl Sparisjóður
and Sparisjóður Ólafsfjarðar. These subsidiaries will continue to operate as
before. 

SPM has experienced serious financial difficulties recently. This brings a
successful conclusion to the issue which should suit creditors, customers,
employees and other stakeholders. 
Furthermore there is no longer any need for equity contributions from the
treasury which were available to the bank in accordance with emergency
legislation adopted in October 2008. 

For further information please contact:

Bernhard Þór Bernhardsson  CEO of SPM, Tel: 848-3450 or 430-7543
Iða Brá Benediktsdóttir,  Manager at New Kaupthing