Prospectus

Íslandsbanki hf. ( incorporated with limited liability in Iceland ) Issue of SEK 1,000,000,000 Floating Rate Notes due April 2022 under the U.S.$ 2 , 5 0 0 ,00 0,000 Global Medium Term Note Programme The SEK 1,000,000,000 Floating Rate Notes due April 2022 (the Notes ) have been issued by Íslandsbanki hf. (the Issuer ) u nder its U.S.$ 2 , 5 0 0 ,000,000 Global Medium Term Note Programme (the Programme ) . The Notes bear in terest from (and including) 26 April 2018 (the Issue Date ) to (but excluding) the Interest Payment Date falling in or nearest to April 2022 at a floating rate of 0.80 per cent. per annum above the then applicable three - month rate for the Stockholm Interban k Offered Rate ( STIBOR ). Interest will be payable quarterly in arrear on 26 January, 26 April, 26 July and 26 October in each year, from and includ ing 26 July 2018 to and including 26 April 2022, subject to adjustment in accordance with the Modified Follow ing Business Day Convention (as defined in Condition 5.2(a) of the section entitled “ Terms and Conditions of the Notes ” in the base prospectus relating to the Programme dated 21 April 2017 (the 2017 Base Prospectus ), which section is incorporated by refere nce in this Prospectus ). For a more detailed description of the Notes, see also “ Issue Terms ” herein. An investment in the Notes involves certain risks. For a discussion of these risks see the section entitled “ Risk Factors ” , in the base prospectus relat ing to the Programme dated 30 April 2018 (the Current Base Prospectus ), which section is incorporated by reference in this Prospectus . Without prejudice to the other risks described in the section entitled “ Risk Factors ” in the Current Base Prospectus , pot ential investors should note that under current Icelandic law, Noteholders will rank behind certain depositors of the Issuer in a winding - up of the Issuer, as further described under “ The claims of Noteholders will be subordinated to the claims of certain of the Issuer’s depositors ” in the section entitled “ Risk Factors ” in the Current Base Prospectus , and Condition 3.1 of the section entitled “ Terms and Conditions of the Notes ” in the 2017 Base Pr ospectus . This Prospectus has been approved by the Central B ank of Ireland, as competent authority under the Prospectus Directive (as defined below). The Central Bank of Ireland only approves this Prospectus as meeting the requirements imposed under Irish and European Union ( EU ) law pursuant to the Prospectus Direc tive. Such approval relates only to the Notes which are to be admitted to trading on a regulated market for the purposes of Directive 20 1 4/ 65 /E U ( as amended, MiFID II ) and/or which are to be offered to the public in any Member State of the European Economi c Area. Application has been made to the Irish Stock Exchange plc trading as Euronext Dublin ( Euronext Dublin ) for the Notes to be admitted to the official list of Euronext Dublin (the Official List ) and to trading on its regulated market (the Main Securit ies Market ). The Main Securities Market is a regulated market for the purposes of MiFID II . Reference in this Prospectus to Notes being "listed" (and all related references) shall mean that the Notes have been admitted to the Official List and to trading o n the Main Securities Market. The Notes are unrated. The Issuer has senior unsecured debt rating s of BBB + (long term debt) and A - 2 ( short term debt ) from Standard & Poor’s Credit Market Services Europe Limited ( S&P ) as at the date of this Prospectus. The Issuer also has senior unsecured debt ratings of BBB (long term debt) and F3 (short term debt) from Fitch Ratings Limited ( Fitch ) as at the date of this Prospectus. S &P and Fitch are established in the EU and are registered under the Regulation (EC) No. 10 60/2009 (as amended) (the CRA Regulation ). As such S&P and Fitch are included in the list of credit rating agencies published by the European Securities and Markets Authority ( ESMA ) on its website (at http://www.esma.europa.eu/page/List - registered - and - certified - CRAs ) in accordance with the CRA Regulation. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction o r wi thdrawal at any time by the assigning rating agency.

The date of this Prospectus is 25 May 201 8 .

This Prospectus comprises a prospectus for the purposes of Article 5. 3 of the Prospectus Directive . For the purposes of this Prospectus, Prospectus Direct ive means Directive 2003/71/EC ( as amended , includ ing by Directive 2010/73/EU ), and includes any relevant implementing measure in a relevant Member State of the European Economic Area.

The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

The information in the section entitled “ Book - Entry Clearance Systems ” on pages 1 33 to 136 of the Current Base Prospectus (which section is incorporated by reference in this Prospectus ) has been extracted from information provided by t he clearing systems referred to therein. In addition, certain information in the sections entitled “ The Republic of Iceland ” and “ Financial Markets in Iceland ” on pages 1 28 to 1 32 of the Current Base Prospectus (which sections are incorporated by reference in this Prospectus ) has been extracted from publications by the National Economic Institute, the Ministry of Finance and the Central Bank of Iceland, where indicated as such. The Issuer confirms that, in each case, such information has been accurately re produced and that, so far as it is aware, and is able to ascertain from information published by those sources, no facts have been omitted which would render the reproduced information inaccurate or misleading.

This Prospectus is to be read in conjunction with all documents (or, as applicable, sections thereof) which are deemed to be incorporated herein by reference (see “ Documents Incorporated by Reference ”). This Prospectus shall be read and construed on the basis that such documents (or, as applicable, sections thereof) are incorporated and form part of this Prospectus.

The Joint Lead Managers (being Nordea Bank AB (publ), Skandianaviska Enskilda Banken AB (publ) and Swedbank AB (publ)) have not independently verified the information contained herein. A ccordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Joint Lead Managers as to the accuracy or completeness of the information contained or incorporated by reference in th is Prospectus or any other information provided by the Issuer in connection with the offering of the Notes . No Joint Lead Manager accepts any liability in relation to the information contained or incorporated by reference in this Prospectus or any other i nformation provided by the Issuer in connection with the offering of the Notes .

No person is or has been authorised by the Issuer to give any information or to make any representation not contained in or not consistent with this Prospectus or any other inf ormation supplied in connection with the offering of the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or any of the Joint Lead Managers .

Neither this Prospectus nor any othe r information supplied in connection with the offering of the Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as a recommendation by the Issuer or any of the Joint Lead Managers that any recipient o f this Prospectus or any other information supplied in connection with the offering of the Notes should purchase the Notes. Each investor contemplating purchasing the Notes should make its own independent investigation of the financial condition and affai rs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Prospectus nor any other information supplied in connection with the offering of the Notes constitutes an offer or invitation by or on behalf of the Issuer or any of the Joint Lead Managers to any person to subscribe for or to purchase any Notes.

Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall in any circumstances imply that the information contained herein concerning the Issuer is c orrect at any time subsequent to the date hereof or that any other information supplied in connection with the offering of

2

the Notes is correct as of any time subsequent to the date indicated in the document containing the same. The Joint Lead Managers ex pressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Notes or to advise any investor in the Notes of any information coming to their attention.

This Prospectus does not constitute an offer to sell or th e solicitation of an offer to buy the Notes in any jurisdiction and has been produced solely for the purposes of listing the Notes on the Official List and the Main Securities Market . The distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. The Issuer and the Joint Lead Managers do not represent that this Prospectus may be lawfully distributed, or that the Notes may be lawfully offered, in compliance with any applicable registration or other req uirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer or the Joint Lead Managers which i s intended to permit a public offering of the Notes or distribution of this Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Prospectus nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus or any Notes m ay come must inform themselves about, and observe, any such restrictions on the distribution of this Prospectus and the offering and sale of the Notes. In particular, there are restrictions on the distribution of this Prospectus and the offer or sale of t he Notes in the United States, the European Economic Area (including the United Kingdom , Iceland and Norway ) , the People’s Republic of China, Hong Kong, Singapore, Switzerland and Japan , see the sections entitled “ Subscription and Sale and Transfer and Sel ling Restrictions ” in the Current Base Prospectus, which section is incorporated by reference in this Prospectus .

The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determine the suitability of that inv estment in light of its own circumstances. In particular, each potential investor should consider, either on its own or with the help of its financial and other professional advisers, whether it:

(a) has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Prospectus;

(b) has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its partic ular financial situation, an investment in the Notes and the impact such investment will have on its overall investment portfolio;

(c) has sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes where the currency fo r principal or interest payments is different from the currency in which such investor’s financial activities are principally denominated;

(d) understands thoroughly the terms of the Notes and is familiar with the behaviour of financial markets; and

(e) is able to evaluate possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Legal investment considerations may restrict certain investments. The investment activities of certain investors are subject to investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (i) the Notes are legal investments for it, (ii) th e Notes can be used as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of the Notes. Financial

3

institutions should consult their legal advisors or the appropriate regulators to determine the appropria te treatment of Notes under any applicable risk - based capital or similar rules.

In making an investment decision, investors must rely on their own examination of the Issuer and the terms of the Notes being offered, including the merits and risks involved. The Notes have not been approved or disapproved by the United States Securities and Exchange Commission or any other securities commission or other regulatory authority in the United States, nor have the foregoing authorities approved this Prospectus or c onfirmed the accuracy or determined the adequacy of the information contained in this Prospectus. Any representation to the contrary is unlawful.

None of the Joint Lead Managers and the Issuer makes any representation to any investor in the Notes regardin g the legality of its investment under any applicable laws. Any investor in the Notes should be able to bear the economic risk of an investment in the Notes for an indefinite period of time.

MIFID II PRODUCT GOVERNANCE/TARGET MARKET

Solely for the purpose s of each manufacturer’s product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients only, each as defined in MiFID I I; and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a distributor) should take into consideration the manufacturer’ s target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appr opriate distribution channels. N either the Arranger nor the Dealers (in each case, named in the Current Base Prospectus) nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID Product Governance Rules.

BENCHMARKS REGULAT ION

Interest payable under the Notes will be calculated by reference to STIBOR . As at the date of this Prospectus, the administrator of STIBOR (being the Swedish Bankers’ Association) is not included in the register of administrators and benchmarks establi shed and maintained by ESMA pursuant to Article 36 ( Register of administrators and benchmarks ) of Regulation (EU) 2016/1011 ( the Benchmarks Regulation ) . As far as the Issuer is aware, the transitional provisions in Article 51 of the Benchmark Regulation ap ply, such that the Swedish Bankers’ Association is not currently required to obtain authorisation or registration.

U.S. INFORMATION

The Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to United States persons, except in certain transactions permitted by United States Treasury Department regulations. Terms used in this paragraph have the meanings given to them by the United States Internal Revenue Code of 1986 , as ame nded (the Code) and the United States Treasury Department regulations promulgated thereunder.

Unless otherwise stated, terms used in this paragraph have the meanings given to them in “ Form of the Notes ” in the Current Base Prospectus , which section is inco rporated by reference in this Prospectus .

4

TABLE OF CONTENTS

Page

Documents Incorporated by Reference ...... 6 Issue Terms ...... 8

5

DOCUMENTS INCORPORAT ED BY REFERENCE

The following docum ents (or , as applicable, sections thereof) which have previously been published or are published simultaneously with this Prospectus and have been filed with the Central Bank of Ireland shall be incorporated in, and form part of, this Prospectus:

(i) the sect ions of the Current B ase P rospectus (available on the website of Euronext Dublin at http://www.ise.ie/debt_documents/Final%20Base% 20Prospectus%2030.04.18_de44c87a - c0a3 - 4e06 - 8064 - d7ee4f00f082.PDF ) as set out in the table below:

Page references (inclusive) Presentation of Financial and Other Information 7 to 8 Cautionary statement regarding forward looking statements 8 to 9 Risk Factors 11 to 28 Overview of the Programme 31 to 36 Form of the Notes 37 to 41 Use of Proceeds 116 Description of the Issuer 117 to 127 The Republic of Iceland 128 to 129 Financial Markets in Iceland 130 to 132 Book - Entry Clearance Systems 133 to 1 36 Taxation 137 to 139 The first two paragraphs of the section ‘ Subscription and 140 Sale and Transfer and Selling Restrictions ’ Selling Restrictions, a subsection of the section ‘ Subscription 143 to 148 and Sale and Transfer and Selling Restrictions ’ (on the bas is that, so far as the context permits, references to “Base Prospectus” shall be construed as references to this Prospectus) General Information 149 to 153

(ii) the audited consolidated financial statements of the Issuer for the financial year ende d 31 December 201 5 (including the auditors’ report thereon) (the 2015 Financial Statements ) which can be viewed online at https://www.i slandsbanki.is/library/Skrar/IR/Afkoma/ISB_Annual_Consolidated_Financial_Stateme nts_2015.pdf ;

(iii) the audited consolidated financial statements of the Issuer for the financial year ended 31 December 2016 (including the auditors’ report thereon) (the 2016 Fi nancial Statements ) which can be viewed online at https://www.islandsbanki.is/library/Skrar/IR/Afkoma/ISB_Consolidated_Financial_Statements_20 16 .pdf ;

(iv) the audited consolidated financial statements of the Issuer for the financial year ended 31 December 2017 (including the auditors’ report thereon) (the 2017 Financial Statements ) which can be viewed online at https://www.islandsbanki.is/library/Skrar/IR/arsskyrsla - 2017/Íslandsbanki%20hf.%20Consolidated%20Financial%20Statements%202017.pdf ;

(v) section 6 “Liqu idity Risk” of the Issuer’s Pillar 3 Report: Risk and Capital Management 201 7 which can be viewed online at https://www.islandsbanki.is/library/Sk rar/IR/arsskyrsla - 2017/IslandsbankiPillar3Report2017.pdf ; and

(vi) the section “Terms and Conditions of the Notes” (pages 61 to 104 inclusive) set out in the 2017 B ase P rospectus (available on the website of Euronext Dublin at

6

http://www.ise.ie/debt_documents/F%20Prospectus_eb98ea21 - f651 - 4a5c - 8553 - 35249aad2e75.PDF ) .

Following the publication of this Prospectus, a supplement may be prepared by the Issuer and approved by the Central Bank of Ireland in accordance with Article 16 of the Prospectus Directive. Statements contained in any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable (whether expre ssly, by implication or otherwise), be deemed to modify or supersede statements contained in this Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Prospectus.

Copies of documents incorporated by reference in this Prospectus can also be obtained from the registered office of the Issuer and from the specified office of the Principal Paying Agent in London.

Any documents themselves incorporated by reference in the documents incorpora ted by reference in this Prospectus shall not form part of this Prospectus.

Any non - incorporated parts of a document referred to herein are either deemed not relevant for an investor or are otherwise covered elsewhere in this Prospectus.

7

ISSUE TERMS

The t erms and c onditions of the Notes shall consist of the terms and conditions set out in the 2017 Base Prospectus (the Base Conditions ) as amended or supplemented by the issue - specific terms set out below in this section. References in the Base Conditions to a Pricing Supplement shall , for the purposes of this Prospectus, be deemed to refer to the issue - specific terms of the Notes substantially in the form set out below.

MiFID II Product Governance / Professional investors and eligible counterparties only ta rget market - Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clie nts only, each as defined in Directive 2014/65/EU (as amended, MiFID II ); and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a distributor ) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or ref ining the manufacturers’ target market assessment) and determining appropriate distribution channels.

ÍSLANDSBANKI HF. ( incorporated with limited liability in Iceland )

Legal entity identifier (LEI): 549300PZMFIQR79Q0T97

Issue of SEK 1,000,000,000 Floatin g Rate Notes due April 2022 under the U.S.$ 2,00 0,000,000 Global Medium Term Note Programme

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Base Conditions.

1 . Issuer: Íslandsbanki hf.

2 . (a) Series Number: 17

(b) Tranche Number: 1

(c) Date on which the Notes will Not Applicable be consolidated and form a single Series:

3 . Specified Currency or Currencies: Swedish Kronor ( SEK )

4 . Aggregate Nominal Amount:

(a) Series: SEK 1,000,000,000

(b) Tranche: SEK 1,0 00,000,000

5 . Issue Price: 100.00 per cent. of the Aggregate Nominal Amount

6 . (a) Specified Denominations: SEK 2,000,000 and integral multiples of SEK 1,000,000 in

8

excess thereof up to and including SEK 3,000,000. No Notes in definitive form wi ll be issued with a denomination above SEK 3,000,000

(b) Calculation Amount: SEK 1,000,000

7 . (a) Issue Date: 26 April 2018

(b) Interest Commencement 26 April 2018 Date:

8 . Maturity Date: Interest Payment Date falling in or nearest to April 2022

9 . In terest Basis: 3 - month STIBOR + 0.80 per cent. Floating Rate (see paragraph 15 below)

10 . Redemption/Payment Basis: Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at 100 .00 per cent. of their nomi nal amount

11 . Change of Interest Basis: Not Applicable

12 . Put/Call Options: Issuer Call (see paragraph 1 8 below)

13 . (a) Status of the Notes: Unsubordinated

(b) Set - off: Not Applicable

(c) Date Board approval for 21 March 2018 issuance of Notes obtained:

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

14 . Fixed Rate Note Provisions Not Applicable

15 . Floating Rate Note Provisions Applicable

(a) Specified Period(s)/Specified Interest Payment Dates will be quarterly in arrear on 26 Interest Payment Dates: January, 26 April, 26 July and 26 October in each year, from and including 26 July 2018, to and including 26 April 2022, subject to adjustment in accordance with the Business Day Convention.

(b) Business Day Convention: Modified Following Business Day Convention

(c) Addi tional Business Not Applicable Centre(s):

(d) Manner in which the Rate of Screen Rate Determination Interest and Interest Amount is to be determined:

9

(e) Party responsible for Not Applicable calculating the Rate of Interest and Interest Amount (if not the Principal Paying Agen t or, as the case may be, the VPS Calculation Agent):

(f) Screen Rate Determination:

 Reference Rate, Reference Rate: 3 - month STIBOR Relevant Time and Relevant Time: 11.00 am in the Relevant Financial Centre Relevant Financial Relevan t Financial Centre: Stockholm Centre:

 Interest Second Stockholm business day prior to the start of each Determination Interest Period Date(s):

 Relevant Screen Reuters Page SIDE Page:

(g) ISDA Determination:

 Floating Rate Not Applicable Option:

 Designated Matu rity: Not Applicable

 Reset Date: Not Applicable

(h) Linear Interpolation: Not Applicable

(i) Margin(s): + 0.80 per cent. per annum

(j) Minimum Rate of Interest: Not Applicable

(k) Maximum Rate of Interest: Not Applicable

(l) Day Count Fraction: Actual/360

(m) Fall back pr ovisions, Not Applicable rounding provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions:

16 . Reset Note Provisions: Not Applicable

17 . Zero Coupon Note Provisions Not Applicable

10

PROVISIONS RELATING TO REDEMPTION

18 . Issuer Call: Applicable

(a) Optional Redemption Interest Payment Date falling in or nearest to April 2021 Date(s): and on every Interest Payment Date thereafter

(b) Optional Redemption SEK 1, 000,000 per Calculation Amount Amount:

(c) If redeemable in part:

(i) Minimum Not Applicable Redemption Amount:

(ii) Maximum Not Applicable Redemption Amount:

(d) Notice period (if other than Not Applicable as set out in the Conditions):

19 . Investor Put: Not Applicable

20 . Final Redemption Amount: SEK 1,000,000 per Calculation Amount

21 . Early Redemption Amount payable SEK 1,000,000 per Calculation Amount on redemption for taxation reasons , upon the occurrence of a Capital Event or on event of default:

GENERAL PROVISIONS A PPLICABLE TO THE NOTES

22 . Form of Notes:

(a) Form: Temporary Bearer Global Note exchangeable for a Permanent Bearer Global Note which is exchangeable for Definitive Notes only upon an Exchange Event

(b) New Global Note: No

23 . Additional Financial Centre(s): Not Applicable

24 . Talons for future Coupons to be No attached to Definitive Bearer Notes:

25 . Other terms or special conditions: Not Applicable

Signed on behalf of Íslandsbanki hf.:

11

By: ...... Duly authorised

12

PART B – OTHER INFORMATION

1 . LISTING AND ADMISSIO N TO TRADING

(i) Li sting: None at issue. Application has been made to the Irish Stock Exchange plc trading as Euronext Dublin ( Euronext Dublin ) for t he Notes to be admitted to the Official List of Euronext Dublin and to trading on the Main Securities Market of Euronext Dubli n on 25 May 2018 .

(ii) Admission to trading: Not a pplicable at issue. See above

(iii) Estimate of total expenses € 5,000 related to admission to trading:

2 . OPERATIONAL INFORMAT ION

(i) ISIN: XS1813048128

(ii) Common Code: 181304812

(iii) CUSIP: Not Applicable

(iv) CINS: Not Applicabl e

(v) CFI: DTVXFB

(vi) FISN: ISLANDSBANKI HF/VAREMTN 20220400

(vii) Any clearing system(s) other Not Applicable than DTC, Euroclear and Clearstream, Luxembourg and the relevant identification number(s):

(viii) Delivery: Delivery against payment

(ix) Names and addresses of Not Applicable addi tional Paying Agent(s) and/or Transfer Agent(s) (if any) or alternative VPS Account Manager (if applicable):

(x) VPS Calculation Agent: Not Applicable

(xi) Intended to be held in a manner No. Whilst the de signation is specified as "no" at the which would allow Eurosystem date of this Pricing Supplement, should the Eurosystem eligibility: eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safek eeper. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit

13

operations by the Eurosystem at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.

3 . DISTRIBUTION

(i) Method of distribution: Syndicated

(ii) If syndicated, names of Nordea Bank AB (publ) Managers: Skandinaviska Enskilda Banken AB (publ)

Swedbank AB (p ubl)

(iii) Date of Subscription Agreement: 24 April 2018

(iv) Stabilising Manager(s) (if any): Not Applicable

(v) If non - syndicated, name of Not Applicable Dealer:

(vi) TEFRA applicability: TEFRA D

(vii) Prohibition of Sales to EEA Not Applicable Retail Investors:

14

ISSUER

Íslandsbanki hf. Hagasmári 3 201 Kópavogur Iceland

PRINCIPAL PAYING AGENT, TRANSFER AGENT AND EXCHANGE AGENT

Citibank, N.A., London Branch Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom

JOINT LEAD MANAGERS

Nordea Bank AB (pu bl) Skandinaviska Enskilda Banken AB (publ) Smålandsgatan 17 Kungsträdgårdsgatan 8 SE - 105 71 Stockholm SE - 106 40 Stockholm Sweden Sweden

Swedbank AB (publ) SE - 105 34 Stockholm Sweden

LEGAL ADVISERS

To the Joint Lead Managers as to Icelandic law To t he Joint Lead Managers as to English law

LOGOS Allen & Overy LLP Efstaleiti 5 One Bishops Square 103 Reykjavík London E1 6AD Iceland United Kingdom

INDEPENDENT AUDITORS

Ernst & Young ehf. Borgartùni 30 105 Reykjavik Iceland

IRISH LISTING AGENT

Arthur Cox Listing Services Limited Ten Earlsfort Terrace Dublin 2 Ireland

Printed by Allen & Overy LLP ICM:30002648.7