Íslandsbanki hf. - Company Announcement

Íslandsbanki sells commercial paper

Íslandsbanki  hf.  has  today  offered  4, 5 and  6 month  commercial  paper  to
investors. Offers of ISK 1.12bn were accepted but the total appetite amounted to
ISK 3.72bn.

Nominal  amount sold in series  ISLA 16 0520 was ISK 380m at  the simple rate of
6.44% (price  97.7957). Nominal amount sold in series ISLA 16 0616 was ISK 380m
at  the  simple  rate  of  6.49% (price  97.3158) and the nominal amount sold in
series ISLA 16 0721 was ISK 360m at the simple rate of 6.50% (price 96.7170).

Prior  to the  auction the  total outstanding  commercial paper  amounted to ISK
10.2bn. Trading is expected to commence on 15 January 2016 on Nasdaq Iceland.

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#1977738]