National Bank expects a $365 million ABCP net charge in the Q4 2007 results

Montreal, 19 November 2007 - 

National Bank announces today that it expects to record a charge of approximately $365 million, after tax and compensation adjustments, related to its holdings of non-bank asset-backed commercial paper (ABCP)  in the fourth quarter ended October 31, 2007. The charge amounts to approximately $575 million on a pre-tax basis and before compensation adjustments.

During the fourth quarter of 2007, National Bank purchased $2.1 billion of ABCP, principally from its own sponsored mutual funds and pooled funds as well as ABCP held by its retail clients, in addition to approximately $150 million of ABCP the Bank already had on balance sheet.

National Bank’s ABCP charge is based upon its valuation estimate of its ABCP holdings which considers the current market conditions affecting the underlying assets of the trusts and National Bank’s expectation that it may be a long term owner of this ABCP or the instruments which could replace these notes following the proposed restructuring contemplated by the Montreal Accord.

National Bank expects its Tier 1 capital ratio to be above its 8.5% target as at October 31, 2007.

National Bank is currently preparing its fourth quarter and year-end results which will be issued on November 29, 2007. The financial information provided in this announcement is based on current estimates and is subject to change.

Caution Regarding Forward-Looking Statements
National Bank of Canada makes from time to time written forward-looking statements such as in this press release. Such statements are made pursuant to Canadian securities regulations and the 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, and the achievement of strategic objectives, certain risks as well as statements with respect to our beliefs, plans, expectations, 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, the management of credit, market and liquidity risks; the strength of the Canadian and United States economies and the economies of other countries in which the Bank conducts business; the impact of the movement of the Canadian dollar relative to other currencies, particularly the U.S. dollar; the effects of changes in monetary policy, including changes in interest rate policies of the Bank of Canada; the effects of competition in the markets in which the Bank operates; the impact of changes in the laws and regulations regulating financial services and enforcement thereof (including banking, insurance and securities); judicial judgments and legal proceedings; developments with respect to the restructuring proposal relating to asset-backed commercial paper (ABCP) and liquidity in the ABCP market; the Bank’s ability to obtain accurate and complete information from or on behalf of its clients or counterparties; the Bank’s ability to successfully realign its organization, resources and processes; its ability to complete strategic acquisitions and integrate them successfully; changes in the accounting policies and methods the Bank uses to report its financial condition, including uncertainties associated with critical accounting assumptions and estimates; operational and infrastructure risks; other factors that may affect future results, including changes in trade policies, timely development of new products and services, changes in estimates relating to reserves, changes in tax laws, technological changes, unexpected changes in consumer spending and saving habits; natural disasters; the possible impact on the business from public health emergencies, conflicts, other international events and other developments, including those relating to the war on terrorism; and the Bank’s success in anticipating and managing the foregoing risks. Additional information about these factors can be found under “Risk Management” and “Factors That Could Affect Future Results” in the 2006 Annual Report. 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 also cautions readers not to place undue reliance on these forward-looking statements.

About 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. 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. National Bank has more than $124 billion in assets and, together with its subsidiaries, employs 17,169 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA). For more information, visit the Bank’s website at www.nbc.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives):

Denis Dubé
Director– Public Relations
National Bank of Canada
Tel.: 514-394-8644