Íslandsbanki hf. - Company Announcement

Íslandsbanki sells covered bonds and commercial paper

Íslandsbanki hf. has today concluded an offering of covered bonds and commercial
paper. All bids for covered bonds were rejected at this time.

The  nominal amount sold in commercial paper series ISLA 16 0721 was ISK 1.74bn
at  the simple rate of 6.41% (price 98.3022) and sold in series ISLA 16 1012 was
ISK  1.36bn at the  simple rate  of 6.50% (price  96.8523). The total demand for
commercial paper amounted to ISK 5.72bn meaning 54% of the offers were accepted.

Following  this  transaction  the  total  outstanding commercial paper issued by
Íslandsbanki will amount to ISK 10.64bn.

Trading  is expected  to commence  on 15 April  2016 on Nasdaq  Iceland when ISK
4.44bn of ISLA 16 0415 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#2002142]