Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Íslandsbanki sells commercial paper

Íslandsbanki  hf.  has  today  offered  4, 5 and  6 month  commercial  paper  to
investors. Offers of ISK 2.52bn were accepted but the total appetite amounted to
ISK 3.76bn.

Nominal  amount sold in series ISLA 16 0616 was ISK 1,420m at the simple rate of
6.45% (price  97.8095). Nominal amount sold in series ISLA 16 0721 was ISK 320m
at  the  simple  rate  of  6.49% (price  97.1964) and the nominal amount sold in
series ISLA 16 0815 was ISK 780m at the simple rate of 6.50% (price 96.7677).

Prior  to the  auction the  total outstanding  commercial paper  amounted to ISK
11.6bn. Trading  is expected to  commence on 12 February  2016 on Nasdaq Iceland
when ISK 1.5bn of ISLA 16 0212 is on maturity.

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.


[HUG#1983919]