News

Icelandic State Financial Investments (ISFI) has published a status report regarding the proposed sale of the
state´s holdings in Landsbankinn hf.

The Minister of Finance and Economic Affairs (the Minister) is authorized under law to sell the state´s
holdings in financial undertakings, having received such an authorization in the general budget and having
received a formal proposal from ISFI regarding the intention to sell.

According to the general budget of 2016 the government intends to sell up to 30% of its holdings in
Landsbankinn hf. in the second half of 2016. Act no. 155/2012 on the sales process of the state‘s holdings
in financial undertakings states that the Minister is authorized to sell shares in Landsbankinn hf. in excess
of 70%. The government of Iceland holds 98,2% of the shares in Landsbankinn hf. and the Minister is
therefore allowed to sell up to 28,2% of the shares.

ISFI intends to submit a proposal regarding the sale in accordance to law in the first quarter of 2016. It is
most likely that the main proposal submitted will be for the sale of as much as 28,2% of the shares through
an initial public offering (IPO) followed by a listing on a stock exchange.

ISFI has put forward four financial criteria regarding the commencement of the sales process of the state‘s
holdings. These criteria emphazise the importance of maximizing the recovery of the government‘s capital
contributions to the banks and related financing costs.

The criteria are as follows:

•  Strength and stability in the Icelandic economy.
•  Acceptable valuation of shares in financial undertakings.
•  Sufficient interest and capacity by markets to invest in the holdings.
•  Readiness of Landsbankinn hf.

According to ISFI these criteria have now been met and it is therefore appropriate to launch the sales
process of shares in Landsbankinn hf.

Following the publication of the status report, ISFI will publish an expression of interest were parties can
inform ISFI about their interest to act as an advisor to ISFI in the proposed sales process.

The status report is available on the website of ISFI, www.bankasysla.is, in Icelandic and an English version
will be available shortly. For further information contact Jón G. Jónsson Director General of ISFI, phone
number +354 550 1700.

Role of ISFI:

Icelandic State Financial Investments (ISFI) is a state body with an independent board of directors which
reports to the Minister of Finance and Economic Affairs. ISFI was established with Act no. 88/2009. ISFI
manages the state‘s holdings in financial undertakings as well as the sales process in accordance to Act. no.
155/2012 on the sales process of the state‘s holdings in financial undertakings.