Íslandsbanki hf. - Other information disclosed according to the rules of the Exchange

Islandsbanki hf. : Fitch upgrade to BBB with stable outlook

Today, Fitch Ratings upgraded Íslandsbanki to BBB/F3, from BBB-/F3, with stable
outlook.

According to Fitch the upgrade is driven by the continuous strengthening of the
Icelandic operating environment as reflected in the extended record of robust
economic growth, combined with an improved external position. Fitch recently
revised the outlook on Iceland's sovereign rating to Positive and affirmed its
BBB+ rating.

The upgrade also reflects the Bank's successful track record of re-building a
solid balance sheet, including successfully restructuring a large share of its
loan book and managing down legacy funding and trapped deposits in an orderly
fashion.

Jón Guðni Ómarsson, Chief Financial Officer:

"A great emphasis has been placed on the asset side of Íslandsbanki's balance
sheet in recent years. Restructuring of the loan portfolio is now finalised, the
non-performing loan (NPL) ratio continues to decline and only a negligible share
of loans is non-performing after restructuring. Íslandsbanki has maintained
extraordinary levels of capital and liquidity in preparation for possible
adverse effects that may stem from the full lifting of capital controls.

The Icelandic operating environment has remained resilient and the Bank's
fundamentals remain very strong. In that light, Íslandsbanki decided to take
steps to optimise its capital base and paid out an extraordinary dividend of ISK
27bn in December 2016. Access to international capital markets is good and the
Bank is now fully market funded. The rating upgrade from Fitch to BBB/F3, and
the upgrade from SP Global to BBB/A-2 in October 2016, is well aligned with
these developments."

For further information:

  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is,  tel
    +354 440 3187.
  * Media Relations - Edda Hermannsdottir, edda.hermannsdottir@islandsbanki.is
    and tel: +354 440 4005.


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ÍSB - Fitch upgrade to BBB with stable outlook.pdf