Arion Bank hf. - Company Announcement

Reitun updates its credit rating of Arion Bank

Reitun has assigned to Arion Bank a credit rating of i.BBB1 with a positive
outlook. It rates the Bank's covered bonds at i.AA2. This is the same rating as
in July 2013 but Reitun's rating system has changed since then. Reitun will
update its ratings of the Bank and covered bonds following the publication of
the Bank's 2013 annual financial statement. 

Reitun states in its report that the Bank has made good progress in resolving
problems linked to the banking crisis. The quality of the loan portfolio has
improved and the Bank has become financially more robust. Results from core
activities are good and the Bank enjoys a strong competitive position. The
completion of several major financial restructuring projects for its clients
will improve the Bank's key financial ratios. If the Bank completes these tasks
as planned it will positively affect the Banks's rating. 

The special circumstances in Iceland, i.e. the capital controls, settlement
with creditors, and political uncertainty have a negative impact on the
international credit rating of the Icelandic government, companies and
municipalities. These circumstances will therefore have a detrimental effect on
the Bank's terms of business on the international credit markets. 

The outlook for the Bank is bright, despite fluctuations in the Icelandic
economy. 


For further information please contact Haraldur Gudni Eidsson, Head of
Corporate Communications at Arion Bank, tel: +354 856 7108,
haraldur.eidsson@arionbanki.is.

Attachments:

CreditratingfromReitunFebruary2013inIcelandic.pdf

NewratingsystematReitunFebruary2013inIcelandic.pdf