ASX Announcement - Governance Processes For the PricewaterhouseCoopers Investigation - 29 January 2004

The National is issuing the following statement to the Australian Securities Exchange to clarify issues raised at an open analyst briefing on 28 January 2004.

The Chairman of the National, Mr Charles Allen, said PricewaterhouseCoopers has been commissioned by the Chief Executive of the National, Mr Frank Cicutto, to conduct an independent investigation into unauthorised foreign currency options trading.

"The PwC investigation is considering the sequence of events and trading activities that lead to losses from unauthorised foreign currency options trading; a complete analysis of the losses and how they occurred; identification of key policies, procedures, systems and control issues in the National's foreign currency options trading; any third party issues; and further improvements in the control framework," Mr Allen said.

"PwC are presenting updates to the Risk Committee of the Board, chaired by Mr Graham Kraehe. As part of the governance process, PwC is presenting to non-Executive Directors of the Risk Committee 'in camera'. The findings will be presented to the Board and used as a basis to determine accountability.

"PwC will also present its findings to the Australian Prudential Regulation Authority on a similar basis. These governance processes will ensure that the PwC investigation is independent. The processes will also ensure that APRA will have access to the PwC investigation. It is expected that the PwC investigation will be completed by the end of February and that the findings will then be made public."

For further information:

Robert Hadler
General Manager Group 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