IBM and National Bank Financial sign IT services deal

IBM and National Bank Financial sign $200-million, eight-year deal to transform brokerage services

Montreal, March 3, 2003 � IBM Canada and National Bank Financial, a wholly-owned subsidiary of National Bank of Canada (BNC), have signed a $200-million, eight year agreement designed to transform the bank’s brokerage services through IBM’s technology and financial services expertise for greater productivity and increased business value. This deal builds on the existing contract between BNC and IBM.

This new agreement expands upon a relationship that has existed for more than a quarter of a century between National Bank Financial and IBM�s brokerage services division, Securities Industry Services. This agreement calls for IBM to design, build and operate new processes in the application and IT operations service area that enable National Bank Financial to focus on their core business while driving growth in key areas. It will also strengthen National Bank Financial�s industry leading position in correspondent services. The company provides trading and custody services to some 80 independent financial services firms with assets under administration of over $26 billion.

The new services being provided include: managing National Bank Financial�s application suite, improving response times at customer service centers, managing their IT operations and introducing new Web-based offerings and workflow tools. Combining these services will enable their brokerage business to quickly respond to market changes and better meet their customer needs. It will also position National Bank Financial as a leader in the brokerage business prepared for the industry-wide move to straight-through processing of brokerage transactions.

�We have developed a solid partnership with IBM over the years and this new step demonstrates our desire to improve our operational efficiency and expand our functional capabilities,� explains David Wood, EVP and CAO, National Bank Financial. �We want to be ready to respond to new market trends and enhance the quality of our services. We appreciate IBM�s expertise and wish to invest in our business relationship to improve our processes.�

�We are committed to helping National Bank Financial transform its business as it drives toward greater organizational efficiency,� said Martin Landry, Managing Director, Financial Services sector, at IBM Canada Limited. �This agreement will enable National Bank Financial to further improve its IT environment by taking advantage of IBM�s industry knowledge and leading edge capabilities. We will mix these strengths to offer National Bank Financial application and IT services on demand to better equip its brokerage business to adapt to market opportunities.�

As a result of this agreement, 115 National Bank Financial employees will join IBM�s teams in Montreal and Toronto.

About National Bank Financial

National Bank Financial is one of the largest investment dealers in Canada, with over 3,100 employees active in more than 100 offices across Canada, the United States and Europe. Created through a merger between First Marathon and L�vesque Beaubien Geoffrion in 1999, National Bank Financial is a wholly owned subsidiary of National Bank of Canada. The firm offers an extensive array of financial services to individual investors, private and publicly owned corporations, and government agencies. It is also a leading provider of correspondent brokerage services to third parties.

About IBM

IBM Global Services is the world�s largest information technology services provider, with professionals serving customers in 160 countries and annual revenue of more than $36 billion (2002), or 45 percent of IBM’s total annual revenue. IBM Global Services offers a broad range of capabilities — consulting, IT services, hardware, software, research and financing — to help companies of all sizes realize the full value of information technology. For more information, visit: