South Korean Legal Action - 8 October 2003

On 19 August 2003 National Australia Bank reported filing a complaint with the Seoul District Prosecutor's Office against a former employee in relation to forged certificates of deposit and promissory notes for an amount of 60 billion won (approximately A$76 million).

The employee had previously been indicted by the Seoul District Prosecutor's Office.

Subsequent bank investigations found a number of suspicious and irregular activities between alleged victims and the former employee.

The National filed an additional criminal complaint with the Seoul District Prosecutor's Office on 15 September 2003 requesting the Prosecutor's Office to investigate these suspicious and irregular activities.

These matters are being thoroughly investigated by the authorities and the National is fully cooperating with the Seoul District Prosecutor's Office.

On 6 October 2003 a civil claim for the repayment of 52.3 billion won (approximately A$66 million) was lodged with the Seoul District Court against the former National employee and the National in relation to the forged certificates.

The National had no involvement in the forgery and did not issue the forged documents. The National will vigorously defend the claim.

None of the holders of the forged certificates and promissory notes is, or has ever been, a customer of the National.

None of the funds allegedly represented by the forged certificates or promissory notes were deposited with, or paid out by, the National.

The National does not anticipate this civil action being resolved until late 2004 at the earliest.