Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Íslandsbanki selects MP bank as market maker for the Bank's covered bond

Íslandsbanki hf. has selected MP bank as market maker for the Bank's covered
bond.  The market maker is obligated to submit bids for at least ISK 20,000,000
nominal value, each day before the market opens.

The market maker is required to renew its bids within 15 minutes of their having
been  accepted. The bids  are valid within  the trading day.  The maximum spread
between the market maker's bid and ask prices can be no higher than1%.

If  trading in one business day reaches ISK 60,000,000 nominal value, the market
maker may cease to present bids/offers until the next business day.

The market making is effective as of Wednesday 7 December 2011.