National Bank announces record net income for 2004 and meets all of its financial objectives

Montreal, 2 December 2004 - 

National Bank announces record net income for 2004 and meets all of its financial objectives

Record net income of $192 million for the fourth quarter of 2004 versus $158 million for the same period of 2003;
Earnings per share up 28% to $1.11 per share;
Net income of $725 million or $4.10 per share for fiscal 2004;
Return on common shareholders' equity of 19.7% for the fourth quarter and 18.8% for fiscal 2004;
An 11% increase in the quarterly dividend 

 

For the quarter  ended
October 31

 

Net income

2004

2003

%

Personal and Commercial

              97

              93

+   4

Wealth Management

              25

              22

+  14

Financial Markets

              65

              65

 

Other

               5

              (22)

 

Total

             192

            158

+  22

Earnings per share

$1.11

$0.87

+  28

Return on common shareholders' equity

19.7%

16.4%

 



             

For the fiscal year ended October 31

 

Net income

2004

2003

%

Personal and Commercial

            388

           358

+   8

Wealth Management

            105

             82

+ 28

Financial Markets

            250

           219

+  14

Other

              (18)

             (35)

 

Total

            725

            624

+  16

Earnings per share

$4.10

$3.37

+  22

Return on common shareholders' equity

18.8%

16.5%

 

For the fourth quarter ended October 31, 2004, National Bank reported record net income of $192 million, compared to $158 million for the corresponding quarter one year earlier. Earnings per share for the quarter stood at $1.11, up 28% from $0.87 per share in the fourth quarter of 2003.

Return on common shareholders' equity reached 19.7% for the quarter, as against 16.4% for the year-earlier period.

As a result of excellent credit quality, the Bank reduced its general allowance for credit risk by $35 million ($23 million dollars net of income taxes), which increased earnings per share for the quarter by $0.13. This adjustment is included in the “Other” heading in Segment Disclosures. Aside from the reversal of the general allowance, the growth in net income for the fourth quarter of 2004 compared to the same period of 2003 was attributable to the Personal and Commercial and Wealth Management segments.

In fact, the Personal and Commercial segment generated net income of $97 million, up $4 million, or 4%, from the same period one year earlier. Revenues climbed nearly 5% while operating expenses rose 4%.

Net income for the Wealth Management segment amounted to $25 million for the quarter, 14% higher than the $22 million recorded in the fourth quarter of 2003. Most of this increase derived from trust services.

The Financial Markets segment earned net income of $65 million, the same as in the fourth quarter of 2003. The decline in trading revenues was largely offset by gains on securities and lower credit losses at Corporate and Investment Banking.

“National Bank had another strong quarter, as expected,” said Réal Raymond, President and Chief Executive Officer. “We're very satisfied with the way each segment has progressed. We are determined to capitalize on our expanding distribution network and product line and still deliver high-quality customer service,” he continued, adding, “Our strategy, defined by our resolve to continue to be the leading bank in Quebec and to adopt a selective approach by choosing specialized niches elsewhere in Canada, is clearly driving this growth.”

The Board of Directors today approved an 11% increase in the quarterly dividend, bringing the amount paid to $0.42 per share.

For fiscal 2004, the Bank posted record net income of $725 million, as against $624 million for the previous year, for an increase of 16%. Earnings per share were up 22%, from $3.37 for fiscal 2003 to $4.10 for fiscal 2004. Return on common shareholders' equity stood at 18.8% for fiscal 2004 compared to 16.5% for fiscal 2003. For fiscal 2004, the general allowance for credit risk was reduced by a total of $55 million ($36 million net of income taxes), adding $0.20 to earnings per share.

The Personal and Commercial segment generated net income of $388 million in 2004, up $30 million, or 8%, from the preceding year, due to revenue growth of 4% resulting from a 5% increase in the volume of loans and acceptances and a decrease in credit losses.

Net income for the Wealth Management segment rose $23 million, or 28%, to $105 million in 2004. This growth was partly due to substantial activity by individuals on financial markets during the first half of the fiscal year.

For the Financial Markets segment, net income totalled $250 million in 2004, an increase of $31 million, or 14%, compared to one year earlier. For fiscal 2004, gains on securities, corporate financing transactions and lower credit losses largely offset lower trading activities.

As at October 31, 2004, specific allowances and the general allowance for credit risk exceeded gross impaired loans by $190 million, as against $154 million as at October 31, 2003. Taking into account the $55 million reduction in the general allowance for credit risk, which amounted to $350 million as at October 31, 2004, net impaired loans fell by $91 million, or nearly 60%, with Corporate and Investment Banking accounting for two-thirds of the decrease.

Tier 1 and total capital ratios were respectively 9.6% and 13.0% as at October 31, 2004 versus 9.6% and 13.4% as at October 31, 2003. During the year, the Bank repurchased 8.7 million common shares for cancellation under the normal course bid for an amount of $382 million.

“Our 2004 results reveal an efficient, financially solid business that is seriously committed to its customers,” said Réal Raymond, President and Chief Executive Officer. “As we turn the page on fiscal 2004, all of our attention will be focused on steering our resources and people towards growth. Our financial performance is proof that the strategy we implemented will ensure long-term growth for our shareholders. And on that note, I would like to thank our employees for delivering a fantastic year.”

Results


Objectives

Q4 2004

Fiscal year ended October 31 2004

Growth in earnings per share

5% - 10%

28%

22%

Return on commonshareholders' equity

15% - 17%

19.7%

18.8%

Tier 1 capital ratio

8.75% - 9.50%

9.6%

9.6%

Dividend payout ratio

35% - 45%

35%

  35%

MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION AND OPERATING RESULTS

The following text presents Management's analysis of the Bank's financial condition and operating results as presented in the unaudited consolidated financial statements for the fourth quarter of 2004 and for the fiscal year ended October 31, 2004.

Analysis of Results

Operating Results

National Bank reported net income of $192 million for the fourth quarter ended October 31, 2004, as against $158 million for the corresponding quarter one year earlier. Earnings per share for the quarter amounted to $1.11, as against $0.87 for the same period of 2003, for an increase of 28%. Return on common shareholders' equity stood at 19.7% for the quarter, up from 16.4% for the quarter ended October 31, 2003.

For fiscal 2004, net income was $725 million, an increase of 16% from the $624 million reported at the end of fiscal 2003. Earnings per share for 2004 totalled $4.10, up 22% from $3.37 per share in fiscal 2003. Finally, return on common shareholders' equity was 18.8%, as against 16.5% one year earlier.

Results by Segment

Since the beginning of fiscal 2004, the Bank has measured the results of its operating segments in terms of actual losses rather than expected losses. Prior year figures have been reclassified to comply with the current year presentation.

Personal and Commercial

Net income for the Personal and Commercial segment amounted to $97 million for the fourth quarter of 2004, up 4% from $93 million in the corresponding quarter of 2003. Growth in the volume of loans and acceptances, partly offset by narrower spreads, helped push up revenues by approximately 5%, while operating expenses increased 4%.

At $326 million, net interest income for the quarter was $5 million or 2% higher than for the same period of 2003. The average volume of loans and acceptances grew by 7% to $40.9 billion in the fourth quarter of 2004, while the spread narrowed 14 basis points compared to the corresponding quarter of 2003. Other income for the quarter totalled $179 million, up $17 million or 10% from the fourth quarter of 2003. The main sources of growth were commercial lending fees, and card service and insurance revenues. Operating expenses for the quarter stood at $316 million, compared to $304 million for the same period of 2003, an increase of 4% owing primarily to compensation. The efficiency ratio improved to 62.6% for the fourth quarter of 2004 from 62.9% for the fourth quarter of 2003.

For fiscal 2004, net income for the Personal and Commercial segment was $388 million, an 8% increase from the $358 million recorded in 2003. Net interest income climbed $41 million or 3%, primarily due to a $1.9 billion or 5% increase in the volume of loans and acceptances. The impact on net interest income was partly offset by a change in the spread, which narrowed to 3.18% in 2004 from 3.23% in 2003. Other income reached $666 million in 2004 versus $629 million one year earlier. This growth stemmed mainly from transaction fees, card service revenues, insurance revenues and commissions paid by Wealth Management on sales of mutual funds and trust services. Operating expenses for fiscal 2004 totalled $1,216 million, as against $1,162 million in 2003. Nearly half of the $54 million increase was attributable to compensation, with IT development costs and product promotion expenses making up the balance.

Wealth Management

Net income for Wealth Management in the fourth quarter of 2004 was $25 million compared to $22 million for the same period in 2003, representing an increase of $3 million or 14%. Total revenues amounted to $180 million for the quarter, up 3% from $174 million in the corresponding period of 2003. Most of the increase was derived from higher mutual fund revenues, portfolio management and trust services. Operating expenses were $139 million for the fourth quarter of 2004, up 1% from $138 million for the same period one year earlier. The efficiency ratio improved from 79.3% in the fourth quarter of 2003 to 77.2% this quarter.

Net income for the Wealth Management segment in fiscal 2004 reached $105 million as against $82 million for fiscal 2003, for an increase of $23 million or 28%. At $743 million, revenues increased 13% from $658 million in 2003. More than half this growth stemmed from brokerage activities, one quarter from portfolio management and the balance mainly from mutual funds. Operating expenses were $576 million in 2004 versus $526 million in 2003. Nearly two-thirds of the increase was attributable to variable compensation resulting from the higher volume of brokerage transactions. Moreover, the efficiency ratio improved from 79.9% in 2003 to 77.5% in 2004.

Financial Markets

Net income for the Financial Markets segment stood at $65 million for the fourth quarter of 2004, unchanged from the year-earlier period. Trading revenues were particularly impressive in the final quarter of 2003. Their decline in the fourth quarter of 2004 was offset by gains on investment account securities and lower credit losses.

The segment posted revenues of $246 million for the quarter, compared to $274 million for the fourth quarter of 2003. Trading revenues were down $55 million, while gains on investment account securities rose $37 million.       

Trading Revenues
(millions of dollars)

  Q4 2004

Q4 2003

2004

2003

 

 

 

 

Financial Markets

 

 

 

 

Interest rate

(2)

19

43

86

Equity

58

42

190

145

Commodities and foreign exchange

8

58

30

96

 

64

119

263

327

Other segments

3

3

8

13

Total

67

122

271

340

Net interest income

61

(33)

37

(41)

Other income

(13)

136

198

335

Taxable equivalent

19

19

36

46

Total

67

122

271

340

Totalling $146 million, operating expenses for the quarter were down $7 million from $153 million in the fourth quarter of 2003 because of lower variable compensation related to trading activities. For the fourth quarter of 2004, the segment recovered $1 million of the allowance for credit losses compared to a $19 million charge for the same period in 2003.

The Financial Markets segment generated net income of $250 million in fiscal 2004 for a 14% increase over the previous year. Segment revenues advanced 6%, or $56 million, in 2004, to $987 million. Approximately $30 million of the increase was attributable to the loss on credit derivatives recorded in 2003, while the balance of the increase was derived from gains on securities and corporate financing revenues, which were partly offset by the decline in trading revenues. The segment's operating expenses in 2004 were $541 million compared to $527 million in 2003. Variable compensation expenses increased $19 million. Moreover, savings were realized by streamlining certain non-profitable activities. The efficiency ratio improved from 56.6% in 2003 to 54.8% in 2004.

Other

Net income for the “Other” heading in Segment Disclosures totalled $5 million in the fourth quarter of 2004 compared to a loss of $22 million for the same period last year. The variance was due primarily to the reduction in the general allowance for credit risk this quarter, representing a net-tax amount of $23 million.

For fiscal 2004, the net loss for the “Other” heading in Segment Disclosures was $18 million versus $35 million in 2003. The reduction in the general allowance for credit risk added $36 million, net of income taxes, to the results under the “Other” heading in fiscal 2004.

Consolidated Results

Total revenues

Total revenues in the fourth quarter stood at $894 million, compared to $903 million posted in the corresponding quarter of 2003.

Net interest income totalled $387 million for the period, as against $321 million for the year-earlier period, an increase of $66 million or 21%. Net interest income for the Financial Markets segment rose $80 million owing to lower interest paid on indexed deposits linked to a trading portfolio as a result of slimmer trading revenues in the portfolio and less need to resort to financing trading activities through sales of securities sold under repurchase agreements. Moreover, net interest income at Personal and Commercial grew by $5 million, or 2%, to $326 million for the fourth quarter of 2004. This improvement was fuelled primarily by a greater volume of loans and acceptances, offset, in part, by a narrower spread. Furthermore, net interest income under the “Other” heading was down $19 million mainly due to the lower amount of capital allocated to the business segments further to the share repurchase programs.

Other income for the fourth quarter of 2004 amounted to $507 million compared to $582 million recorded for the corresponding quarter of 2003.

At $139 million, financial market fees were down $11 million from the same period a year earlier mainly because of corporate financing activities and retail brokerage activities as investors retreated from financial markets, generating fewer fees this quarter than in the year-earlier period.

The portion of trading revenues recorded as other income fell $149 million from the fourth quarter of 2003. However, since less interest was paid on trading activities recorded as net interest income, total trading revenues for the quarter declined $55 million. Moreover, gains on investment account securities advanced $50 million to $51 million in the fourth quarter of 2004.

Lending fees combined with revenues on acceptances, letters of credit and letters of guarantee increased $7 million, or 10%, to $74 million. This growth was due to commercial lending activities and corporate financing.

Securitization revenues for the quarter declined $14 million to $41 million as a result of the recent interest rate hikes, which reduced the gain on the sale of the underlying assets.

Lastly, revenues from trust services and mutual funds rose $10 million, or 19%, in the quarter to $63 million. This growth was attributable to the correspondent network, investment management, trust services and the increase in mutual fund assets under management.

For fiscal 2004, total revenues increased 6% to reach $3,549 million compared to $3,362 million in 2003. Excluding the “Other” heading, slightly more than half of total revenues in 2004 were derived from Personal and Commercial Banking, approximately 20% from Wealth Management and the remaining 27%, from Financial Markets. These proportions are similar to those recorded last year.

At $1,383 million, net interest income in 2004 rose $59 million, or 4%, from $1,324 million in 2003. Net interest income for the Personal and Commercial segment accounted for $41 million of the increase principally due to the $1.9 billion, or 5%, growth in loan and acceptance volumes, which was partly offset by the narrower spread. Net interest income at Financial Markets jumped $70 million from 2003.

This increase was attributable to trading activities, which are explained later in this report. Lastly, net interest income for the “Other” heading decreased $54 million from 2003 because of share repurchase programs, which reduced capital and securitization activities.

Other income totalled $2,166 million in 2004, up $128 million, or 6%, from $2,038 million in 2003.

Financial market fees rose $89 million, or 16%, in 2004 to $633 million. Just over 40% of the increase was derived from individual investor brokerage activities, while the balance stemmed from the Financial Markets segment, primarily corporate financing.

Trading revenues recorded as other income totalling $198 million in 2004 were down $137 million from 2003. Due to lower interest paid on trading activities recorded as net interest income, trading revenues on the whole were down $59 million in 2004. However, gains on investment account securities shot up $90 million to $91 million in fiscal 2004.

Lending fees and other credit activities reached $303 million dollars in 2004 compared to $267 million in the previous year. An unamortized balance of certain mortgage loan prepayment fees, amounting to $25 million, was included in “Lending fees” following the application of a new accounting standard that came into effect this year. Insurance revenues and consumer and corporate lending activities accounted for the remainder of the increase.

Securitization revenues decreased $24 million, or 12%, owing to the termination of certain programs and smaller gains on the sale of the underlying assets.

At $72 million, foreign exchange revenues in fiscal 2004 surpassed 2003 results by $6 million, or 9%.

Revenues from trust services and mutual funds stood at $244 million in 2004, up $34 million, or 16%, from the previous year.

Approximately one-third of the increase was derived from correspondent network services, another 30% from investment management, one quarter from trust services and the remainder from mutual funds.

Approximately 35% of the increase in other items in “Other income” was attributable to investment management services.

Operating Expenses

Operating expenses for the quarter totalled $625 million compared to $623 million for the same quarter of 2003. Salaries and staff benefits, which amounted to $342 million for the quarter and accounted for approximately 55% of expenses, were down $11 million year over year, primarily due to variable compensation related to trading activities. Occupancy costs, which totalled $60 million for the quarter, rose $12 million, mainly as a result of a higher allowance for vacant office space. Computer and equipment costs were up $15 million but were offset in large part by professional fees, which were down $11 million.

For fiscal 2004, operating expenses were $2,392 million as against $2,257 million in 2003. Slightly more than half of the $135 million increase was attributable to compensation, primarily variable compensation. Moreover, computer and equipment costs for the year amounted to $334 million, up $22 million as a result of various initiatives to improve systems. Almost 45% of the increase in the “Other” heading was attributable to product promotion expenses and customer loyalty programs. At 65.4%, the efficiency ratio for 2004 was stable over 2003 when it stood at 65.3%.

Risk Management

Credit Risk

The Bank recorded an $8 million recovery of credit losses for the quarter as against a $50 million provision for the year-earlier period. In addition to the $35 million decrease in the general allowance for credit risk, credit losses were down $20 million at Financial Markets.

For fiscal 2004, credit losses amounted to $86 million, a drop of $91 million, or 51%, versus the 2003 fiscal year. In 2004, the Bank reduced its general allowance for credit risk by $55 million. Moreover, the provision for credit losses declined $19 million at Personal and Commercial and $11 million at Financial Markets. The remainder of the decrease stemmed from the securitization recorded under “Other” in Segment Disclosures.

As at October 31, 2004, the allowance for credit losses exceeded impaired loans by $190 million, compared to $154 million as at year-end 2003. The $36 million improvement stemmed from a $58 million decrease in net impaired loans for Corporate and Investment Banking, $17 million for Real Estate and $12 million for Commercial Banking. These decreases were partially offset by the $55 million reversal of the general allowance for credit risk.

The ratio of gross private impaired loans to total tangible capital and allowances was excellent at 11% as at October 31, 2004 versus 13% as at October 31, 2003.

Market Risk – Trading Activities

The VaR (Value-at-Risk) method is one of the main tools used in managing trading-related market risk.  The VaR measure is based on a 99% confidence level and uses two years of historical data.  Market risk management is described in more detail on 59 of the 2003 Annual Report 2003.

The table below entitled “Trading Activities” illustrates the allocation of market risk by type of risk: interest rate, foreign exchange, equity price and commodity.

Trading Activities (1)
(millions of dollars)

Global VaR by risk category

For the quarter ended October 31, 2004

For the quarter ended July 31,
2004

 

Period end

High

Average

Low

Period end

High

Average

Low

Interest rate

(3.7)

(4.9)

(3.7)

(2.7)

(4.8)

(6.5)

(4.3)

(2.2)

Foreign exchange

(0.9)

(2.9)

(1.7)

(0.7)

(0.9)

(3.2)

(1.4)

(0.2)

Equity

(3.6)

(5.4)

(3.8)

(3.0)

(4.8)

(5.6)

(3.1)

(1.1)

Commodity

(1.0)

(1.0)

(0.8)

(0.6)

(0.9)

(1.0)

(0.7)

(0.6)

Correlation effect(2)

3.6

6.6

4.2

2.4

4.0

8.7

4.5

1.4

Global VaR

(5.6)

(7.6)

(5.8)

(4.6)

(7.4)

(7.6)

(5.0)

(2.7)

(1) Amounts are presented on a pre-tax basis and represent one-day VaR.
(2)
The correlation effect results from diversification by risk type.

Balance Sheet

As at October 31, 2004, the Bank's total assets stood at $88.8 billion, compared to $84.9 billion as at October 31, 2003. Loans and acceptances rose $2.9 billion, while cash resources, securities and securities purchased under reverse repurchase agreements were up $1.1 billion. The following table presents the main portfolios.

Average monthly volumes

October

October

(millions of dollars)

2004

2003

Loans and acceptances*

 

 

Residential mortgages

19,554

18,105

Consumer loans

6,489

5,193

Credit card receivables

1,589

1,472

Business loans

17,240

18,143

 

44,872

42,913

Deposits

 

 

Personal (balance)

23,675

23,512

Off-balance sheet personal savings (balance)

57,456

51,747

Business

10,683

10,533

*including securitized assets

As at October 31, 2004, residential mortgage loans were up $1.4 billion, or 8%, from October 31, 2003 to $19.6 billion. Consumer loans, which stood at $6.5 billion, have risen nearly 25% for the year. Excluding indirect loans, this strong growth, which was mainly due to partnership volumes, would have been 29%. Credit card receivables have increased 8% to $1.6 billion since the beginning of the fiscal year. Business loans and acceptances totalled $17.2 billion as against $18.1 billion as at the end of fiscal 2003. Corporate loans were down approximately $1 billion, while SME loans and acceptances remained stable.

Personal deposits stood at $23.7 billion as at October 31, 2004 versus $23.5 billion on the same date a year earlier. As at October 31, 2004, off-balance sheet personal savings administered by the Bank totalled $57.5 billion, for an increase of $5.8 billion, or 11%, since the end of fiscal 2003. Approximately 60% of the increase was attributable to savings administered by brokerage subsidiaries. Of the remainder, $1.2 billion stemmed from mutual funds, which were up 15%. Lastly, the savings products administered by National Bank Trust grew by $900 million, or 45%, in fiscal 2004.

Capital

Tier 1 and total capital ratios, in accordance with the rules of the Bank for International Settlements, were 9.6% and 13.0% respectively as at October 31, 2004 compared to 9.6% and 13.4% as at October 31, 2003. Since the beginning of the 2004 fiscal year, net income, net of dividends, has been offset in large part by the repurchase of common shares.

Dividends

At its meeting of December 2, 2004, the Board of Directors declared regular dividends on the various classes and series of preferred shares, and a dividend of 42 cents per common share, payable on February 1, 2005 to shareholders of record on December 27, 2004.

Caution regarding forward-looking statements

From time to time, National Bank of Canada makes written and oral forward-looking statements, included in this quarterly report, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, in reports to shareholders, in press releases and in other communications.  All such statements are made pursuant to the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements with respect to the economy, market changes, the achievement of strategic objectives, certain risks as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. These forward-looking statements are typically identified by the words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” and words and expressions of similar import.

By their very nature, such forward-looking statements require us to make assumptions and involve inherent risks and uncertainties, both general and specific. There is significant risk that express or implied projections contained in such statements will not materialize or will not be accurate. A number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.  Such differences may be caused by factors, many of which are beyond the Bank's control, which include, but are not limited to, changes in Canadian and/or global economic and financial conditions (particularly fluctuations in interest rates, currencies and other financial instruments), liquidity, market trends, regulatory developments and competition in geographic areas where the Bank operates, technological changes, consolidation in the Canadian financial services sector, the possible impact on our businesses of international conflicts and other developments including those relating to the war on terrorism and the Bank's anticipation of and success in managing the risks implied by the foregoing.

The Bank cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Bank's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Bank therefore cautions readers not to place undue reliance on these forward-looking statements. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Bank.

Investor Relations

Financial analysts and investors who want to obtain financial information on the Bank are asked to contact the Investor Relations Department.
600 de La Gauchetière West, 7th Floor
Montreal, Quebec  H3B 4L2
Telephone: (514) 394-0296
Fax: (514) 394-6196
E-mail:
investorrelations@nbc.ca
Website:
  www.nbc.ca/investorrelations

Public Relations

600 de La Gauchetière West, 10th Floor
Montreal, Quebec  H3B 4L2
Telephone: (514) 394-8644
Fax: (514) 394-6258
Website: www.nbc.ca
General information: telnat@nbc.ca

Quarterly report publication dates for fiscal 2004-2005

First quarter            February 24, 2005
Second quarter        May 26, 2005
Third quarter           August 25, 2005
Fourth quarter         December 8, 2005

DISCLOSURE OF 4th QUARTER 2004 RESULTS

Conference Call

A conference call for analysts and institutional investors will be held onDecember 2, 2004 at1:00 p.m. ET.;
Access by telephone is1-877-211-7911or (416) 405-9310;
A recording of the conference call can be heard until December 9, 2004 by calling
1-800-408-3053 or (416) 695-5800.  The access code is 3113879.

Webcast

The conference call will be webcast live at www.nbc.ca/investorrelations;
A recording of the webcast will also be available on the Internet after the call.

Financial Documents

The quarterly financial statements are available at all times on National Bank's website at www.nbc.ca/investorrelations;
The Report to Shareholders, supplementary financial information and a slide presentation will be available on the Investor Relations page of National Bank's website shortly before the start of the conference call.

Transfer agent and registrar

For information about stock transfers, address changes, dividends, lost stock certificates, tax forms and estate transfers, shareholders are requested to contact the Transfer Agent, National Bank Trust Inc., at the address and telephone numbers below.

National Bank Trust Inc.

Share Ownership Management
1100 University, 9th Floor
Montreal, Quebec  H3B 2G7
Telephone: (514) 871-7171
1-800-341-1419
Fax: (514) 871-7442
E-mail: clientele@tbn.bnc.ca

Direct deposit service for dividends

Shareholders may have their dividend payments deposited directly via electronic funds transfer to an account at any financial institution that is a member of the Canadian Payments Association. To do so, simply contact the Transfer Agent, National Bank Trust Inc., in writing.

Dividend Reinvestment Plan

National Bank offers holders of its common or preferred shares a Dividend Reinvestment and Share Purchase Plan through which they can invest in shares without paying any commissions or administration fees. Participants may reinvest all cash dividends paid on their shares held or make optional cash payments of at least $500 per payment, to a maximum of $5,000 per quarter, to purchase shares.  For more information, please contact the Registrar, National Bank Trust Inc., at 1-800-341-1419 or (514) 871-7171.

About the National Bank of Canada
National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. The National Bank has assets close to $89 billion and, together with its subsidiaries, employs close to 16,500 people. The Bank's securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank's website at www.nbc.ca.

Information:

Michel Labonté
Senior Vice-President
Finance, Technology and Corporate Affairs
(514) 394-8610

Denis Dubé
Director, Public Relations
(514) 394-8644

Fourth Quarter 2004

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