Landsbankinn hf. - Company Announcement

Landsbankinn signs a EUR-denominated loan facility with NIB

Landsbankinn and the Nordic Investment Bank (NIB) have signed a 5-year loan
agreement in the amount of EUR 30 million (the equivalent of ISK 4.2 bn). The
loan agreement provides that Landsbankinn allocate the funds to projects which
improve the competitiveness of small and medium-sized enterprises (SMEs), as
well as environmentally-friendly ventures. Landsbankinn has in the past funded
such ventures and companies in various sectors and the NIB loan facility helps
the Bank increase its lending to such projects even further. 

This is the first unsecured loan NIB grants to an Icelandic bank following the
introduction of capital controls in 2008. 

“NIB considers this facility to be an important step to encourage SME
investments in Iceland. We believe that lifting capital controls will further
boost the recovery of Iceland’s economy. We think that the country’s financial
authorities have taken the necessary steps to ensure the banking system will be
able to withstand pressures when the controls are removed,” says Henrik
Normann, NIB President & CEO. 

"The conclusion of this agreement is a positive step towards building trust in
international financial markets. NIB's loan facility, along with Landsbankinn’s
recent issuance of EUR, SEK and NOK-denominated senior unsecured bonds, are
clear examples of the increased trust international investors are extending to
Landsbankinn in particular and the Icelandic economy in general. In recent
years, Landsbankinn has made concerted efforts to diversify and strengthen its
funding profile both in Icelandic króna and foreign currencies. The terms of
the loan from NIB are favourable for Landsbankinn and support the Bank's aim to
decrease financing cost and diversify its foreign currency lender base. The
Icelandic economy as a whole benefits from increased attention from
international investors and access to foreign credit at favourable terms," says
Steinthór Pálsson, CEO of Landsbankinn. 

NIB is an international financial institution owned by eight member countries:
Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The
Bank finances private and public projects in and outside the member countries.
NIB has the highest possible credit rating, AAA/Aaa, with leading rating
agencies Standard & Poor’s and Moody’s. 

For further information:

Hanna Kristín Thoroddsen, Investor Relation, ir@landsbankinn.is, tel: +354 410
7328