National Bank of Canada expects to manage transition to Basel III capital rules without use of regulatory event redemption clause

Montreal, 7 February 2011 - 

National Bank of Canada (the « Bank ») (NA:TSX) announces that it expects to manage its transition to Basel III capital rules without making use of the regulatory event redemption clause to redeem capital instruments  The Bank does not intend to publish a regulatory event redemption calendar.

However, the Bank maintains the right to redeem capital instruments based on other existing terms and conditions not linked to regulatory event redemption clauses. The Bank also retains the right to invoke if needed any applicable regulatory event redemption clause in accordance with its terms should circumstances change. 

On February 4, 2011, the Office of the Superintendent of Financial Instrument published an advisory entitled “Treatment of non-qualifying capital instruments” which clarifies the phase-out of non-qualifying capital instruments under Basel III.  Non-common capital instruments include outstanding preferred shares, subordinated debentures and tier 1 capital innovative instruments.

Forward-Looking Statements
The Bank's expectations are based on a number of factors and assumptions, including, but not limited to, the Bank's current and expected future capital position. Given the uncertainty related to the financial, economic, legislative and regulatory environments, the expectations expressed in this press release could change materially over time.

About National Bank of Canada
National Bank of Canada is an integrated group that 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 over $145 billion in assets and, together with its subsidiaries, employs 18,322 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. To access National Bank Financial Group’s financial education portal, visit www.clearfacts.ca.

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

Claude Breton
Senior Manager, Public Affairs
National Bank Financial Group
Tel.: 514-394-8644