Landsbankinn hf. - Company Announcement

Landsbankinn hf.: Standard & Poor's Upgrades Landsbankinn's Credit Rating to BBB/A-2 with a Positive Outlook

The international rating agency Standard & Poor's (S&P) has upgraded
Landsbankinn's long- and short-term credit ratings from BBB-/A-3 to BBB/A-2 with
a positive outlook.

In a news announcement by S&P Global Ratings published today, 25 October 2016,
the agency stated that Landsbankinn's rating had been upgraded in part due to
material improvement in the bank's capital position, as well as the more
favourable circumstances in the Icelandic economy. S&P anticipated decreasing
risks related to domestic credit as Icelandic households deleverage, resulting
in debt levels in line with those of other wealthy European economies over the
next two years. Capital account liberalisation is progressing satisfactorily,
leading to further improvement in the country's economic resilience and in the
operating environment for Icelandic banks. S&P points out that Icelandic banks
now have better access to foreign credit markets and material improvements have
been made in financial market regulation and supervision. Proactive measures
have been taken to avoid a repeat of the excessive growth of the 2000s and to
manage how cross-border capital flows affect the domestic economy.

Landsbankinn's CEO Steinþór Pálsson: "The rating upgrade from Standard & Poor's
is gratifying, as it confirms the positive developments in Iceland,
Landsbankinn's own strong position and the results the bank's clear strategy has
delivered. In recent quarters we have clearly felt the growing confidence in the
bank both domestically and abroad. This was clearly manifested in the high
demand among foreign investors for the bank's EUR 500 million bond, issued for a
longer maturity and on better terms than had previously been offered to
Icelandic banks. The rating upgrade from BBB- to BBB with a positive outlook
will place the bank in a still better position to provide exemplary banking
services to its ever-growing number of customers."



For further information contact:

Rúnar Pálmason, Public Relations, pr@landsbankinn.is, tel: +354 410 6263

Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is, tel:
+354 410 7272


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Attachments:

S&P Press Release.pdf