Glitnir banki hf. - Company Announcement

Glitnir issues a convertible bond

Strengthens equity ratio considerably

The board of Glitnir Bank hf. has decided to issue convertible bonds. The bonds
will be subordinated and count as Tier 1 in the Company's accounts. The total
amount of the issue will be up to ISK 15 bn. The bonds will convert into
Glitnir shares in 5 years time at a pre-determined rate in accordance with
further terms of the bonds. 

The bonds provide investors with a fixed inflation linked 5 year coupon as well
as upside from positive share price development. The issue counts as Tier 1
capital and will strengthen Glitnir's equity ratio considerably. 

The bonds will be sold in a closed offering to qualified investors in the
period 12-17 March 2008. Following the offering the bonds will be issued before
31 March 2008 and consequently an application will be filed for listing on OMX
Nordic Exchange in Iceland. 

The bond issue and other authorisations related to the issue are dependent on
shareholder approval. Such shareholder meeting will be held on 19 March 2008 at
9:00 at Glitnir's headquarters. 

“The issuance of convertible bonds is a good option for investors in the
current market conditions. The bonds have a downside protection, carry a 5 year
fixed indexed coupon and convert into Glitnir's shares at maturity. Investors
therefore benefit from positive share price development. The issue will
strengthen Glitnir's equity ratio considerably and is one of the bank's ongoing
funding initiatives.” says Alexander K. Guðmundsson, CFO and EVP of Finance and
risk management of Glitnir. 
 
Glitnir recently reported profits of ISK 33.9 bn. (EUR 387m) before taxes and a
return on equity 19.3% for 2007. The Bank is in a comfortable liquidity
position with EUR 7 billion immediate available funds with maturing long term
debts of EUR 2.5 billion for the group due for the remainder of the 2008. The
Bank has a robust capital ratio of 11.2% at end of 2007. 

For further information:

Már Másson, Executive Director of Corporate Communications, Tel. +354 8444990,
e-mail: 
mar.masson@glitnir.is

Vala Pálsdóttir, Head of Investor Relations, Tel. +354 8444989,
e-mail: vala.palsdottir@glitnir.is