Landsbankinn hf. - Company Announcement

Standard & Poor's assigns Landsbankinn 'BB+' Ratings; Outlook Stable

The international rating agency Standard and Poor's (S&P) has today, 20 January
2014, assigned Landsbankinn the credit rating grade BB+ with a stable outlook. 

In its rating report, S&P states that it is the company's view that “the bank
operates with significant liquidity and capital buffers and low leverage in the
difficult economic environment,” and that the “stable outlook reflects our
expectation that Landsbankinn's capital will continue to strengthen and that it
will restructure a significant amount of legacy bonds due in 2014-2018.” 

The ratings reflect - according to S&P - their “'bb' anchor for banks operating
in Iceland and our view of Landsbankinn's "adequate" business position,"strong" capital and earnings, "adequate" risk position, "average" funding, and"adequate" liquidity, as our criteria define these terms. 

S&P expresses the view that “Landsbankinn has been well managed since its
creation in 2008, demonstrating superior operating efficiency and a reduction
of non-performing loans.” 

S&P further states that despite its size, Landsbankinn's revenue base is rather
broad and capital and earnings are "strong", according to rating agency's
criteria. 

Furthermore: “Our leverage ratio for Landsbankinn (adjusted common equity to
adjusted assets) was higher than 20% in September 2013. This is one of the best
leverage ratios among global commercial banks we rate.” 

Steinthór Pálsson, CEO of Landsbankinn: "S&P's rating is pleasing and conforms
to our expectations with regard for, amongst other things, the sovereign credit
rating. The strength of Landsbankinn's position emerges clearly in many of the
evaluated factors and it is especially good to see S&P's evaluation of our
operations, risk and financial position; factors Landsbankinn has placed great
emphasis on improving. Landsbankinn has had on its agenda to obtain a credit
rating to facilitate access to international credit markets in the future.
These favourable results should boost trust in the bank and can also be
regarded as one of many steps in Iceland's journey towards lifting capital
controls, which is of no less importance."

For further information on Landsbankinn go to: landsbankinn.is/english



For further information, please contact

Kristján Kristjánsson, pr@landsbankinn, 00 354 410 4011/00 354 899 9352

Attachments:

SP_lanshaefismat_Landsbankinn_20012014.pdf