Íslandsbanki hf. - Company Announcement

Islandsbanki hf. completes covered bond issuance

Íslandsbanki hf. has concluded an auction of covered bonds. The non-indexed
issue, ISLA CB 23 was sold today for an amount of ISK 3.82bn at the nominal
yield of 6.90%. All offers for the CPI-linked issue, ISLA CBI 26, were rejected.

Total demand amounted to ISK 7.1bn, of which 54% of the offers were accepted.
Following the offering the total size of ISLA CB 23 is ISK 6.86bn and total
outstanding covered bonds issued by Íslandsbanki will amount to ISK 51.5bn. This
was the bank's last covered bond auction in 2015.

Trading is expected to commence on 8 December 2015 on Nasdaq Iceland.

For further information:

  * Investor Relations - Tinna Molphy, ir@islandsbanki.is and tel:
    +354 440 3187.
  * Public Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel
    +354 440 4005.


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