Glitnir Banki hf. Registration Document July 2008 1. RISK FACTORS ............................................................................................................................................. 5 2. STATEMENTS .............................................................................................................................................. 14 2.1. COMPANY’S STATEMENT ....................................................................................................................... 14 2.2. AUDITOR’S STATEMENT ......................................................................................................................... 15 3. DOCUMENTS ON DISPLAY AND INCORPORATED BY REFERENCE..................................................... 16 4. REFERENCES.............................................................................................................................................. 17 5. THIRD PARTY INFORMATION .................................................................................................................... 19 6. NOTICE TO INVESTORS ............................................................................................................................. 20 7. SELECTED FINANCIAL INFORMATION..................................................................................................... 21 8. OPERATING AND FINANCIAL REVIEW..................................................................................................... 25 8.1. FACTORS AFFECTING RESULTS OF OPERATIONS AND CAPITAL STRUCTURE.............................. 25 8.2. CRITICAL ACCOUNTING POLICIES AND ESTIMATES........................................................................... 28 8.3. KEY INCOME STATEMENT LINE ITEMS ................................................................................................. 28 8.4. RESULTS OF OPERATIONS .................................................................................................................... 30 9. INFORMATION ABOUT THE COMPANY.................................................................................................... 53 9.1. NAME, INCORPORATION AND REGISTRATION .................................................................................... 53 9.2. HISTORY ................................................................................................................................................... 53 10. BUSINESS OVERVIEW................................................................................................................................ 54 10.1. PRINCIPAL ACTIVITIES AND MARKETS ............................................................................................... 54 10.2. COMPETITIVE STRENGTHS .................................................................................................................. 54 10.3. STRATEGY .............................................................................................................................................. 55 10.4. ORGANIZATIONAL STRUCTURE........................................................................................................... 57 11. LITIGATION.................................................................................................................................................. 65 12. PROPERTY................................................................................................................................................... 66 13. THE GROUP................................................................................................................................................. 67 14. EMPLOYEES................................................................................................................................................ 68 15. INVESTMENTS............................................................................................................................................. 70 16. ADMINISTRATIVE MANAGEMENT AND SUPERVISORY BODIES AND SENIOR MANAGEMENT ........ 71 2 16.1. BOARD OF DIRECTORS......................................................................................................................... 71 16.2. SENIOR MANAGEMENT......................................................................................................................... 75 16.3. CORPORATE GOVERNANCE ................................................................................................................ 78 16.4. COMMITTEES OF THE BOARD OF DIRECTORS.................................................................................. 79 16.5. REMUNERATION AND BENEFITS ......................................................................................................... 81 16.6. POTENTIAL CONFLICTS OF INTEREST................................................................................................ 82 16.7. STATEMENT REGARDING SERVICE CONTRACTS ............................................................................. 82 16.8. CONFIRMATIONS ................................................................................................................................... 82 17. RELATED PARTY TRANSACTIONS........................................................................................................... 84 18. MAJOR SHAREHOLDERS .......................................................................................................................... 85 19. FINANCIAL INFORMATION......................................................................................................................... 86 20. RISK MANAGEMENT................................................................................................................................... 87 20.1. RISK MANAGEMENT ORGANIZATION AND PROCEDURES ............................................................... 87 20.2. CAPITAL ALLOCATION........................................................................................................................... 88 20.3. CREDIT RISK........................................................................................................................................... 89 20.4. OPERATIONAL RISK............................................................................................................................... 90 20.5. CURRENCY RISK.................................................................................................................................... 90 20.6. INTEREST RATE RISK............................................................................................................................ 91 20.7. INFLATION RISK ..................................................................................................................................... 92 20.8. LIQUIDITY RISK ...................................................................................................................................... 92 20.9. MARKET RISK ......................................................................................................................................... 93 20.10. BASEL II.................................................................................................................................................... 94 21. CAPITAL RESOURCES ............................................................................................................................... 96 21.1. LIQUIDITY AND FUNDING ...................................................................................................................... 96 21.2. STATEMENT OF CASH FLOW ............................................................................................................. 100 21.3. INVESTMENT PORTFOLIO................................................................................................................... 102 21.4. LOAN PORTFOLIO................................................................................................................................ 102 21.5. LARGE EXPOSURES............................................................................................................................ 104 21.6. ALLOWANCE FOR LOSSES ON LOANS AND RECEIVABLES ........................................................... 104 21.7. ASSETS ................................................................................................................................................. 105 21.8. LOANS PAST DUE BUT NOT IMPAIRED ............................................................................................. 106 21.9. IMPAIRED LOANS................................................................................................................................. 106 21.10. USE OF FUNDS ..................................................................................................................................... 106 21.11. LIABILITIES ........................................................................................................................................... 107 22. SHARE CAPITAL ....................................................................................................................................... 111 22.1. DESCRIPTION OF SHARES AND SHARE CAPITAL............................................................................ 111 3 22.2. DIVIDEND RIGHTS................................................................................................................................ 111 22.3. SHAREHOLDERS’ MEETINGS AND