Íslandsbanki hf. - Company Announcement

Islandsbanki hf.: Outcome of additional issuance of ISLA CB 23

According to article 2 of the market making agreement between Íslandsbanki hf.
and Arion banki hf., Kvika banki hf. and Landsbankinn hf. market makers have the
right to buy up to 10% of the nominal amount sold in an auction to market makers
until 12 o'clock the following day.

Yesterday Íslandsbanki completed an auction of covered bonds. At this time
market makers bought ISK 20m of ISLA CB 23 at the nominal yield of 6.90% which
equals the price of 97.6700. Following this additional sale the total size of
ISLA CB 23 is ISK 6.88bn and total outstanding covered bonds issued by
Íslandsbanki will amount to ISK 51.52bn. Trading is expected to commence on 8
December 2015 on Nasdaq Iceland.

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.


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