Íslandsbanki hf. - Company Announcement

CORRECTION: Íslandsbanki sells commercial paper

CORRECTION:  Wrong  prices  were  shown  in  brackets in the former announcement
published at 18:36:49 CET. The correct prices can be found below:

---

Íslandsbanki  hf.  has  today  offered  4, 5 and  6 month  commercial  paper  to
investors.  Offers of ISK 860m were accepted  but the total appetite amounted to
ISK 3.3bn.

Nominal  amount sold in series  ISLA 16 0721 was ISK 440m at  the simple rate of
6.45% (price  97.8609). Nominal amount sold in series ISLA 16 0815 was ISK 120m
at  the  simple  rate  of  6.50% (price  97.4145) and the nominal amount sold in
series ISLA 16 0915 was ISK 300m at the simple rate of 6.50% (price 96.8862).

Prior  to the  auction the  total outstanding  commercial paper  amounted to ISK
12.6bn. Trading  is expected to commence on 21 March 2016 on Nasdaq Iceland when
ISK 1.5bn of ISLA 16 0321 is on maturity.

For further information:

  * Investor Relations - Tinna Molphy, ir@islandsbanki.is and tel:
    +354 440 3187.
  * Public Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel:
    +354 440 4005.




[HUG#1994679]