FIH Erhvervsbank concentrates business actitivies and reduces the number of employees

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Company release 02-2009 - FIH Erhvervsbank concentrates business activities and
initiates negotia-tions to significantly reduce the number of employees 

At an extraordinary board meeting today, the Board of Directors of FIH
Erh-vervsbank has adopted a plan to adjust and focus FIH's future activities to
meet the current market situation of the financial sector. The focused
ap-proach entails that in future FIH will centre business activities on loans
to corporate customers and selected advisory-based business units. 

As a consequence of the commercial refocus, FIH will close down business areas
and departments, which are not expected to contribute positively to FIH's
earnings on a short-term or a medium-term basis. Therefore, the Board of
Directors of FIH Erhvervsbank has authorised the Executive Board to initiate a
process with a view to reducing the scope of activities as well as the number
employees. The employee reductions are expected to range be-tween 20% and 24%
or between 90 and 110 employees. Thus, FIH now initiates negotiations with the
collective agreement partner Finansforbundet (The Financial Services Union) in
accordance with the collective agreement and existing legislation to settle the
conditions of the affected parties. The negotiations are expected to be
terminated before the end of January 2009. 

The Icelandic Bank Kaupthing remains the majority shareholder of FIH
Erhvervsbank. Kaupthing's shares in FIH have been pledged in the Icelandic
National Bank. Since October last year, the Icelandic owners have worked to
dispose of FIH. However, to date the current financial climate has not made
this possible. FIH has not been affected by the economic turbulence in
Ice-land, as FIH Erhvervsbank has the status of a Danish bank and operates
under Danish supervision, and is “ring-fenced” from the parent company, the
Kaupthing Group. FIH participates in the Danish State guarantee scheme. 

A large proportion of the affected employees were recruited in a period when
market expectations were far more optimistic and associated with the
as-sumption that FIH was part of an international setup through the parent
company, Kaupthing. This is no longer a valid assumption. Moreover, FIH expects
a reduction in the activity level in 2009 on the corporate market, in which FIH
primarily operates. Therefore, the reduction in activities and employees is the
only appropriate consequence. 

The changed business focus is expected to entail a modest increase in net
interest and fee income, while the expected reduction in activities and the
number of employees will provide estimated annual cost savings in the range of
DKK 180 million and DKK 200 million. The cost savings derived in 2008 are
expected to come to approximately DKK 100 million only, due to obligations owed
to the affected employees. 

FIH Erhvervsbank was established in 1958 and has since then been focused on
meeting the needs of Danish companies for medium-term financing. FIH enjoys a
solid position on the corporate market and is Denmark's fifth largest bank
measured by balance sheet. 

FIH publishes its financial statements for 2008 as earlier announced on 6
February 2009. 

Copenhagen, Wednesday 8 January 2009 at 2:00pm 


Lars Johansen
Managing Director, CEO



For additional information please contact Managing Director and CEO Lars
Johansen at +45 7222 5000