On August 4th 2006, Landsbanki Islands hf. (Landsbanki) announced that it had entered into an agreement to acquire Cheshire Guernsey Limited, a Guernsey-based bank, from Cheshire Building Society. The transaction was subject to regulatory approval in Guernsey and Iceland.

As of today all conditions have been met, including the no-objection from the Icelandic Financial Supervisory Authority (Fjármálaeftirlitið) and the approval from Guernsey Financial Services Commission. The transaction has subsequently been completed by the parties to the agreement. The acquisition was financed by Landsbanki’s own funds.

Subsequently the bank’s name will be changed to Landsbanki Guernsey Limited and the bank forms part of the Landsbanki Group as of today. Halldór J Kristjánsson, CEO; Sigurjón Th Árnason, CEO; Mark Sismey Durrant, CEO of Heritable Bank; and John Lewis, Landsbankis attorney in Guernsey, have been appointed as the Landsbanki representatives on the board of Landsbanki Guernsey Limited.

The acquisition is consistent with Landsbankis funding strategy and gives Landsbanki a fast track entry into the offshore deposit market which is an ideal platform to further diversify funding sources.

For further information, please contact: