Exercise of the Over-Allotment option in the IPO of Íslandsbanki and end of Stabilisation Period

Reykjavík, 2 July 2021, Iceland. Citigroup Global Markets Europe AG, Íslandsbanki hf. and J.P. Morgan AG (together the "Joint Global Coordinators") have today notified Bankasýsla ríkisins (Icelandic State Financial Investments, “ISFI”), that the over-allotment option has been exercised in full. The stabilisation period, initially scheduled to end on 22 July 2021, was ended today. The market making agreement with Arion Bank will therefore become effective as of 5 July 2021.

In connection with the initial public offering of Íslandsbanki hf., and the listing of Íslandsbanki’s shares on Nasdaq Iceland on 22 June 2021 (the "Offering"), ISFI granted the Joint Global Coordinators an option to purchase up to 63,636,363 additional existing shares in Íslandsbanki to cover any over-allotment in connection with the Offering (the "Over-Allotment Option"), exercisable in whole or in part within 30 days after the date on which Íslandsbanki's shares commenced trading on Nasdaq Iceland. The Over-Allotment Option has now been exercised in full.

No price stabilisation activities have been carried out since the Offering. The purchase price of the option shares is ISK 79 per share, equal to the offer price of the shares in the IPO, for an aggregate consideration to ISFI of approximately ISK 5,027 million. Settlement of the over-allotment option has been concluded. The stabilisation period in respect of the IPO has now ended and no further stabilisation transactions will be carried out.