Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Standard & Poor's raises Íslandsbanki's ratings to investment grade

Standard & Poor's Ratings Services has raised its long-term and short-term
rating on Íslandsbanki to BBB-/A-3. The outlook on Íslandsbanki is stable.

This upgrade reflects S&P's view of the improving operating conditions for
Íslandsbanki as well as other commercial banks in Iceland.

The ratings on Íslandsbanki reflect its strong capital and earnings and strong
liquidity according to S&P.

The rating action follows S&P's review of the Icelandic banking system, which
incorporates their opinion that economic risks have reduced, given expectations
of continued credit improvement and greater stability in the future. S&P now
anticipate a limited future impact on Íslandsbanki's credit profiles from the
2008 financial crisis. S&P also considered the upgrade of the sovereign of
Iceland on July 17, 2015 as a sign of improvement and normalization in the
banking sector.


Birna Einarsdóttir, CEO of Íslandsbanki:"This result is in line with our expectations in light of S&P raising the rating
on the Icelandic sovereign credit last week. We are pleased to receive this
recognition of success of the Icelandic economy and the restructuring of the
Bank's loan book. The investment grade rating of Íslandsbanki from Fitch and now
from Standard & Poor's will further support our access to international capital
markets and allow us to better serve our customers and fulfil the Bank's visionof being #1 for service."


For further information:

  * Investor Relations - Guðbjörg Birna Björnsdóttir, ir@islandsbanki.is and
    tel: +354 440 4752.
  * Media Relations - Dögg Hjaltalín, pr@islandsbanki.is and tel: +354 844 3925.


[HUG#1940129]

Attachments:

Iceland s Commercial Banks Upgraded.pdf