ASX Announcement - National's Response To Unauthorised Foreign Currency Trading - 15 January 2004

The Chief Executive Officer of the National Australia Bank, Mr Frank Cicutto, in conjunction with the Risk Committee of the Board, has initiated a full investigation into unauthorised foreign currency trading and appointed independent experts from PricewaterhouseCoopers to assist the National in this investigation.

"Since this issue came to light on Tuesday, a structured process to review and resolve all issues arising from the unauthorised foreign currency trading has been in place," Mr Cicutto said.

"We immediately advised the Australian Securities Exchange and fulfilled our continuous disclosure obligations when we became aware of the unauthorised trading and the losses arising from this trading.

"We advised all relevant regulatory authorities and sent a formal reference to the Australian Federal Police so that they can evaluate whether any criminal charges should be brought.

"We suspended the four members of the foreign currency options trading desk involved in this matter pending the outcomes of the internal investigation and external inquiries and we took appropriate steps to manage the position.

"We have subsequently commissioned a comprehensive investigation of what happened and how it occurred so that we can review and enhance our processes to ensure that this does not happen again."

The Chairman of the National Australia Bank, Mr Charles Allen, said the Board of Directors were fully supportive of the actions taken by the management team.

"The Board of Directors will closely monitor the investigation, and the Risk Committee, chaired by Mr Graham Kraehe, will receive regular management updates and reports from PricewaterhouseCoopers," Mr Allen said.

"We will continue to keep the market informed as appropriate and, at this early stage, we expect to release the outcomes of the investigation by the end of February."

For further information:

Robert Hadler
Group Corporate Affairs
03 8641 3876
0404 805 675