Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Íslandsbanki sells commercial paper

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|Íslandsbanki  hf. has today sold 6 month  commercial paper. The total issuance|
|in  the  series  cannot  exceed  ISK  1.5bn in  nominal terms. The auction was|
|structured  so that bidders submitted bids at a predetermined rate (price), at|
|a simple rate of 6.20% (price: 96.9608).                                      |
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|Bids  for ISK 1.18bn were accepted. Prior to the auction the total outstanding|
|commercial paper amounted to ISK 8.85bn.                                      |
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|The  commercial  paper  was  sold  to  a  broad group of investors. Trading is|
|expected to commence on 27 December 2013 on the Nasdaq OMX Iceland.           |
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|For further information:                                                      |
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|  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is and tel:  |
|    +354 440 3187.                                                            |
|  * Media Relations - Dögg Hjaltalín, dogg.hjaltalin@islandsbanki.is and tel: |
|    +354 440 3925.                                                            |
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[HUG#1750229]