CORRECTION: Islandsbanki hf. : Correction of issue description for ISLA CB 16 at Icelandic Securities Depository

| Source: Íslandsbanki hf.
This is a correction of the announcement from 12:05 14.04.2014 GMT. Reason for
the correction: In the Icelandic version of the release, references to the word
"lýsing" has been changed to "útgáfulýsing".

The covered bonds with symbol ISLA CB 16 were issued according to their Final
Terms on 18 October 2013. The terms were not correctly stated in the issue
description dated 17 October 2013 and are therefore not correctly recorded at
the Icelandic Securities Depository. The issue description states, in chapter
2.2, that there are 2 principal payment dates per year, 22 April and 22 October,
up until the Final Maturity Date on 22 October 2016.

In the Final Terms, dated 18 October 2013, it is stated that the bonds will pay
one principal payment on maturity,on 22 October 2016.

Íslandsbanki will seek approval from the owners of these bonds to amend the
issue description at the Icelandic Securities Depository so that it is clearly
stated that no principal repayments will be made before Final Maturity date on
22 October 2016.

For further information:

  * Investor Relations - Tinna Molphy, and tel:
    +354 440 3187.
  * Media Relations - Dögg Hjaltalín, and tel:
    +354 440 3925.