Landsbankinn hf. - Company Announcement

Landsbankinn hf. and LBI hf. sign an agreement regarding prepayment of bonds

Landsbankinn hf. and the Winding-up Board of LBI hf. have today, 18 September 
2015, reached an agreement providing, inter alia, that Landsbankinn will during
2015 prepay Bonds issued in foreign currencies with maturity in October 2016,
and prepay partially Bonds with maturity in October 2018. The amount of the
prepayment is equivalent to 47 billion Icelandic krona. The agreement on the
prepayment is subject to the conclusion by Landsbankinn of a financing
arrangement under conditions that Landsbankinn deems to be acceptable. 

The agreement takes into account the proposals of certain LBI creditors made in
relation to the Government´s plan for easing of capital controls. Information
on these plans were published on the website of the Ministry of Finance and
Economic Affairs in June 2015. 

To facilitate the above refinancing and to broaden and strengthen
Landsbankinn's funding profile, Landsbankinn has mandated Citi, Deutsche Bank
and J.P. Morgan to arrange a series of fixed income investor meetings in Europe
commencing Monday 21 September. A Euro denominated senior unsecured transaction
may follow, subject to market conditions. 

Presentation material for the upcoming investor meetings is accessible on
Landsbankinn's website: http://corporate.landsbankinn.com/investor-relations/ 

Further information:

Kristján Kristjánsson, pr@landsbankinn.is, +354 410 4011 / +354 899 9352