Islandsbanki hf. : Íslandsbanki outlook revised from stable to positive by S&P

Standard & Poor's revised its outlook on Íslandsbanki to positive from stable.
The bank's ratings were affirmed at BB+/B.

S&P's positive outlook on Íslandsbanki largely reflects their view that the
banking sector is improving and their positive outlook on the Icelandic
sovereign. On July 18, 2014, they revised the outlook on the sovereign to
positive due to strong growth and declining government debt.

They anticipate that Íslandsbanki will improve its asset quality metrics over
the next two years, and make further progress in reducing the legacy equity and
real estate risks on its balance sheet.

S&P also notes that the Bank, due to its larger capital base, could benefit more
if S&P would upgrade the sovereign and revise their assessment of risks related
to economic imbalances in the banking sector to intermediate from high.


Jón Guðni Ómarsson, CFO of Íslandsbanki:

"This result is in line with our expectations in light of the outlook change on
 the Icelandic Sovereign last summer. We are pleased to receive this recognition
of success with regard to the Icelandic economy and the restructuring of the
Bank's loan book. This will hopefully further support our access to
international capital markets and allow us to better serve our customers."


For further information:

  * Investor Relations - Guðbjörg Birna Björnsdóttir,
    gudbjorg.bjornsdottir@islandsbanki.is and tel: +354 440 4752.
  * Media Relations - Guðný Helga Herbertsdóttir,
    gudny.herbertsdottir@islandsbanki.is and tel: +354 440 3678.


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