Islandsbanki hf. : Covered bond issues

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| Source: Íslandsbanki hf.
Íslandsbanki hf. has concluded an auction of two CPI-linked covered bonds listed
on NASDAQ OMX Iceland.  No bids were accepted in ISLA CBI 24. A new six-year
CPI-linked issue, ISLA CBI 20, was sold today for an amount of ISK 960,000,000
at a real yield of 3.50%.

In total, Íslandsbanki has now issued covered bonds amounting to ISK 28.33bn
since its inaugural issue in December 2011.

Sold to a broad group of investors, total appetite for the issue amounted to ISK
2,63bn, of which 36.5% of the offers were accepted. Trading is expected to
commence on 23 June 2014 on the NASDAQ OMX Iceland. Market making for all of
Íslandsbanki's covered bond issues is in the hands of MP bank.

The bonds are issued under Act 11/2008 on Covered Bonds which obliges the issuer
to fulfil strict requirements, whereby the underlying cover pool must withstand
a weekly stress test with regards to interest rates and exchange rates. The
issuances are regulated by the Icelandic Financial Supervisory Authority which
additionally appoints an independent inspector to monitor the issuances. Special
cover pool reports on the covered bond issuances are published quarterly and can
be found on Íslandsbanki's web.

For further information:

  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is and tel:
    +354 440 3187.
  * Media Relations - Dögg Hjaltalín, dogg.hjaltalin@islandsbanki.is and tel:
    +354 440 3925.


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