Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Íslandsbanki assigned BBB-/F3 ratings with stable outlook from Fitch

Íslandsbanki's ratings reflect its position as a leading domestic universal bank
in Iceland, and good capitalisation, according to a rating assigned to
Íslandsbanki by Fitch today.


Fitch rates Íslandsbanki as BBB-/F3 with stable outlook. This is a satisfactory
result, especially in light of the fact that Íslandsbanki is now the first Bank
to be assigned an investment grade since 2008.

In their research update, Fitch note that restructuring of a significant part of
the loan book since 2008 has largely been completed, and Fitch believes the bank
has made conservative assessments of its customers' ability to service the
written-down loans.

Fitch also note that significant foreign currency outflow when capital controls
are lifted are a potential risk for the whole banking system, although Fitch
believes foreign currency mismatches are well managed by Íslandsbanki.

Birna Einarsdóttir, CEO of Íslandsbanki:

 We are very proud to be the first bank in Iceland since 2008 to be assigned an
investment grade. This will increase our access to financing, both in Iceland
but not last abroad. This will increase our access to both internal and foreign
funding A broader potential investor base can affect both demand and pricing of
the Bank's bonds. With better terms abroad the Bank can better support customers
that need foreign currency funding

This  is the result of a great work  and dedication of the Bank's employees that
aim at building a great company that is noticed for its successes.

.

For further information:

Investor Relations - Guðbjörg Birna Björnsdóttir, ir@islandsbanki.is and tel:
+354 440 4752.
Media Relations - Guðný Helga Herbertsdóttir, pr@islandsbanki.is and tel:
+354 440 3678.






[HUG#1917450]

Attachments:

Fitch Rating Action Commentary.pdf