Statement re Market making duties on Íslandsbanki's covered bonds suspended today, 28 August 2014

| Source: Íslandsbanki hf. Íslandsbanki hf. 

Following the EFTA Court advisory opinion on the indexation of mortgage lending
in Iceland as published 28 August 2014, Íslandsbanki would like to make known
the following:

The largest issuers of bonds listed in the Icelandic Stock Exchange have decided
to relieve their market makers of trading duties today, 28 August.

As a result, there may be material disruption in the market environment and
trading of other bonds. In that light, Íslandsbanki has decided to temporarily
relieve its market maker, MP banki, of its trading duties on the Bank's covered
bonds today, 28 August 2014.


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.


[HUG#1851781]