ASX Announcement - Update On Unauthorised Foreign Currency Options Trading - 27 January 2004

Following a detailed assessment, the National Australia Bank has announced a total pre-tax loss of A$360 million arising from unauthorised foreign currency options trading.

The total pre-tax loss includes A$185 million announced last week and an additional A$175 million from revaluation of the trading book. This will result in a post-tax loss of A$252 million.

The Chief Executive of the National, Mr Frank Cicutto, said a detailed internal revaluation, and a review of that revaluation by the National's external auditor, had confirmed the losses arising from the unauthorised foreign currency options trading.

"We have worked as quickly as possible to identify all of the losses arising from the foreign currency options trading accurately," he said. "We will ensure that our ongoing position will be managed in a prudent and conservative manner.

"The foreign currency traders exploited weaknesses in our internal procedures. We have identified those weaknesses and closed them. We are conducting a comprehensive investigation into the matter and we will take whatever other action is necessary."

Mr Cicutto also said the National expects to pay a full year dividend in line with market expectations and that the dividend will be fully franked in the first half.

The Chairman of the National, Mr Charles Allen, said the Board of Directors are closely monitoring the investigations into the unauthorised foreign currency options trading and will ensure a comprehensive and transparent assessment.

"We will provide the fullest possible account of the outcomes of the internal investigations when they are completed towards the end of February and ensure full responsibility is identified for the unauthorised foreign currency options trading," he said.

For further information:

Robert Hadler      
General Manager 
Group Corporate Affairs
03 8641 3876 work  
0404 805 675 mobile 

Brandon Phillips
Group Manager 
Group Corporate Relations
03 8641 3857 work
0419 369 058 mobile