ASX Announcement - Update On Unauthorised Foreign Currency Trading Investigation - 19 January 2004

Since its initial announcement on 13 January 2004, the National Australia Bank has progressed its internal investigations into unauthorised foreign currency options trading.

Our detailed work on the unauthorised trading has confirmed that the pre-tax loss arising from the removal of fictitious trades from the foreign currency options portfolio is A$185 million - slightly above our original estimate of A$180 million.

The Chief Executive of the National, Mr Frank Cicutto, said foreign currency options will continue to be a part of our Markets business.

"In view of the unauthorised activity that has occurred in this portfolio, the National is undertaking a market revaluation of the remaining portfolio to ensure it conforms with our policies," Mr Cicutto said.

"Our initial view indicates that this revaluation will lead to additional losses. Based on our work to date, there is a very low probability that the total losses will be as high as market speculation of A$600 million. We expect to provide a further update on this matter by the end of the week."

The Chairman of the National, Mr Charles Allen, said the Board of Directors had been updated on the investigations.

"Following the outcomes of the investigations we will take whatever action is necessary to ensure that investors, customers and staff have full confidence in the National," Mr Allen said.

For further information:

Robert Hadler
Group Corporate Affairs
03 8641 3876
0404 805 675