Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Íslandsbanki sells commercial paper

Íslandsbanki  hf.  has  today  sold  5 and  6 month  commercial paper. The total
issuance  in each series  cannot exceed ISK  1.5bn in nominal terms. The auction
was  structured so that bidders submitted  bids at predetermined rates (prices).
The  5 month  commercial  paper  was  sold  at  a  simple  rate of 5.80% (price:
97.5483) and  the 6 month  commercial paper  at a  simple rate  of 5.85% (price:
97.1275).

Bids  for ISK 760 million were accepted for the 5 month commercial paper and ISK
1,120 million  for the 6 month commercial paper.  Prior to the auction the total
outstanding commercial paper amounted to ISK 4.62bn.

The commercial paper was sold to a broad group of investors. Trading is expected
to commence on 15 October 2014 on Nasdaq Iceland.

For further information:

  * Investor Relations - Guðbjörg Birna Björnsdóttir,
    gudbjorg.bjornsdottir@islandsbanki.is and tel: +354 440 4752.
  * Media Relations - Guðný Helga Herbertsdóttir,
    gudny.helga.herbertsdottir@islandsbanki.is and tel: +354 844 3678.


[HUG#1861666]