Moody's reviews Føroya Banki's A3/P-2/C- ratings


Announcement 7/2010
Moody's has placed Føroya Banki's rating A3/P-2/C- on review for possible
downgrade. Moody's decision follows the banks announcement to acquire 12
branches in Denmark and Greenland, which Moody's deems to be of substantial
size compared with the banks current size. Therefore Moody's will review the
execution risk, and also the impact on the bank's credit quality and cost
management. 

Føroya Banki is still comfortably rated by Moody's, and a possible downgrade is
not expected to influence the Group's funding situation. 

Føroya Banki's creditors' unsecured claims against the bank are covered by the
Danish Sector Fund until 30 September 2010 as most of the Danish Banking
Sector. Føroya Banki has also concluded an agreement with Finansiel Stabilitet
A/S regarding the conditions for the individual government-backed guarantee for
unsubordinated debt permitted under the Danish Act on Financial Stability. The
agreement gives Føroya Banki an option over the next year to request a
three-year government-backed guarantee for unsubordinated debt up to a maximum
of DKK 4.0 billion. The Group's current external funding amounts to DKK 2
billion corresponding to half of the granted government backed guarantee
programme. 

Føroya Banki

Janus Petersen, CEO +298 330340
Johnny í Grótinum, IR +298 230380