Smart Card Boon

The recent terrorist attacks will most likely raise awareness and accelerate the adoption of smart card and biometric-based security systems. A government committee is gearing up to recommend the use of facial recognition technology next week, and some manufacturers of high capacity smart cards have been contacted by U.S. government officials. The government committee indicated Friday it will be presenting its report to the U.S. Department of Transportation on October 1, recommending the use of facial recognition technology at U.S. airports, especially Reagan National Airport and Logan International Airport. The facial recognition technology is being currently being piloted in check cashing machines and ATMs. Meanwhile Seattle-based UltraCard, Inc. says it has been contacted by government officials concerning security uses of the ‘UltraCard’ technology which has 600 times the data storage capacity of current 32kb capacity smart cards. The Smart Card Alliance said Friday it will hold its annual meeting from October 9-11, in McLean, Virginia to explore the critical role smart card technology can play in a new era of increased security. The conference program is entitled “A Future Built on Trust”.

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GCA Signs The Palms

The Palms Casino Resort, scheduled to open in Las Vegas in December 2001, and nine other properties recently signed contracts to utilize the technologically advanced products and services of Global Cash Access, a supplier of cash access, financial management and customer relationship marketing technologies to the gaming industry.

Under the agreement, Palms Casino Resort will take advantage of GCA’s Casino Cash Plus 3-in-1 ATM and QuikCash Plus Web (QCP Web) products as well as Central Credit and Western Union. The casino will also utilize GCA’s new Guest Development Marketing service, QuikMarketing.

“As a new, state-of-the-art casino, we want to provide the best gaming experience to our customers,” said Al Zayas, director of cage operations at Palms Casino Resort. “GCA provides the most technologically advanced cash access services to the gaming industry, so it made perfect sense to install their products at our casino.”

Statistics show that approximately 30 percent of standard ATM cash request transactions at gaming properties are denied because of bad PIN numbers, exceeded limits or insufficient funds. GCA’s Casino Cash Plus 3-in-1 ATMs eliminate such denials through a patented roll-over feature, which gives patrons the option of obtaining funds via a POS debit transaction or a pinless credit card cash advance. The Casino Cash Plus 3-in-1 ATM has become widely accepted due to its convenience to casino patrons and proven profitability to casino operators.

QCP Web, a Web-based, full-service transaction processing system for cage operations, consolidates the products of GCA cash advances, Telecheck, Central Credit, Western Union, ACM enrollment and QuikCredit. It also tracks gaming patron marketing information across all product lines and reduces the need for multiple pieces of hardware in the cage.

GCA’s QuikMarketing service will aid Palms Casino Resort in promoting its grand opening with special offers, programs and events by using the gaming industry’s largest patron database to distribute marketing materials with pinpoint precision to targeted gaming customers.

Palms Casino Resort, located on a 32-acre site just west of the strip on Flamingo Road, in Las Vegas, embraces the pleasures of a resort get-away to provide a comfortable gaming experience. The casino will feature 2,400 slot machines, 55 table games, keno, poker and a race and sports book in 95,000 square feet of space.

In addition to Palms Hotel Casino, properties that recently signed agreements with GCA are:

— Casablanca Resort and Casino – Mesquite, Nev.

— Casino Rouge – Baton Rouge, La.

— Grand Victoria Rising Sun – Rising Sun, Ind.

— Kla-Mo-Ya Casino – Chiloquin, Ore.

— Oasis Resort and Casino – Mesquite, Nev.

— Pompano Park – Pompano, Fla.

— Riverside Resort and Casino – Laughlin, Nev.

— Royal Club Casino – Seattle, Wash.

— Virgin River Hotel and Casino – Mesquite, Nev.

About Global Cash Access

Global Cash Access was formed in 1998 and is a joint venture of First Data Corp. (NYSE:FDC) and M&C International, Inc. Providing access to the gaming industry’s largest patron database, Global Cash Access uses Internet technologies to deliver funds transfer, financial management and customer relationship marketing services to more than 1,000 gaming properties nationwide. More information on the company is available at [www.globalcashaccess.com][1].

[1]: http://www.globalcashaccess.com

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Diebold ADMs

Diebold, Incorporated announced it has finalized the sale of the assets of its MedSelect and SupplySource Plus product lines to Medecorx, Inc. The agreement also includes a multi-million dollar maintenance outsourcing agreement for Diebold, covering automated dispensing machines (ADMs) for drugs and medical supplies.

MedSelect systems facilitate the accurate and efficient distribution of pharmaceuticals and medical supplies in health care facilities through an automated point-of-care dispensing system. Industry leading MedSelect hardware and software enables improved security and control of medications and supplies to streamline processes and assist in reducing costs and medication errors. More than 100 facilities have installed more than 4,500 units of MedSelect equipment.

Medecorx, Inc. is a private, closely held health care corporation based in Atlanta, with offices in Cranberry Township, Pa., and Dallas. For more information, visit the company’s Web site at .

Diebold, Incorporated is a global leader in providing integrated self- service delivery systems and services. Diebold employs more than 11,000 associates with representation in more than 80 countries worldwide and headquarters in Canton, Ohio, USA. Diebold reported revenue of $1.7 billion in 2000 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at .

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Charity Fee Waiver

In just 72 hours, the eBay community has responded enthusiastically to “Auction for America,” eBay’s online charity effort to raise funds for those affected by the horrific events of September 11. There are already more than 30,000 items listed on the site and more are added every minute.

The majority of the items in “Auction for America” come from private citizens throughout the country and represent almost every popular category on the site. Items currently up for bid include: an 1835 US gold coin; a 1958 Mickey Mantle trading card; a 25th anniversary basket from Longaberger; an American flag raised by Senator John Glenn that flew over the US Capitol; a black saltwater pearl necklace; a 1997 Superman comic book signed by the character’s co-creator Jerry Siegel; and six tickets to the February 12 Lakers vs. Wizards basketball game. Perhaps the most inventive idea to date is from an 8-year old Houston girl and her mother who have set up a “virtual soft drink stand” to sell “virtual beverages” and the girl’s own artwork to aid the effort.

New York Governor George E. Pataki and New York City Mayor Rudolph Giuliani both announced that they would sell items on eBay as part of “Auction for America.” Pataki is offering a photograph of himself and Joe DiMaggio riding together in a convertible during the 1999 ticker tape parade honoring the New York Yankees. Giuliani is providing from his own collection a baseball autographed by Yogi Berra and given to the Mayor at Yankee Stadium on “Yogi Berra Day.”

In addition, organizations across the country are also beginning to participate in “Auction for America”:

— Premiere Props and Universal Studios are listing key hero props and wardrobe used in the filming of the movies “American Pie 2,” “The Mummy Returns” and “Josie & the Pussycats.”

— Club Med is listing 50 travel packages at its Club Med Villages Turkoise, in Turks and Caicos, and Columbus Isle in the Bahamas.

— Palm is offering 100 handheld computers including 50 of the newly unveiled Palm m125 Handhelds.

— Professional women’s tennis Sanex WTA Tour is providing authorized memorabilia including Jennifer Capriati’s autographed shirt and baseball cap, and the ATP, the governing body of men’s professional tennis, is offering a tennis racquet autographed by Andre Agassi among other items.

— Tiger Woods Foundation is offering a 2001 US Open flag autographed by Tiger Woods.

In addition to eBay’s customer support available online, the company has set up a toll-free number to help new users who may not be familiar with the site to participate in “Auction for America.” Beginners will be paired with experienced eBay community members who have volunteered to help the effort. The number, 866-272-1053, is staffed from 5 a.m. to 11 p.m. Pacific Time, seven days a week.

Announced by Governor Pataki and Mayor Giuliani on September 17, “Auction for America” is eBay’s online charity effort that allows people around the world to buy and sell goods online to raise money for the victims, their families and communities affected by the horrific events of September 11. The company has challenged itself, through its community of 34 million registered users, to raise $100 million in 100 days.

One hundred percent of the proceeds will go to charity, including the September 11th Fund and the Twin Towers Fund. Billpoint, eBay’s online payment solution, and its partners, Visa USA, MasterCard International, Wells Fargo Bank and Discover Financial Services Inc. are waiving their customary fees for “Auction for America.”

The eBay Foundation has donated the first $1 million.

About eBay

eBay is the world’s online marketplace(TM). Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay, as well as on Half.com, eBay’s site dedicated to fixed price trading. eBay enables trade on a local, national and international basis with customized sites in markets around the world.

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Card Bonds

Fitch says it does not anticipate any rating actions on credit card-backed securities in the next several weeks, however, the recent terrorist attacks will have both immediate and long term effects on the sector. Near term, the events and circumstances that followed will cause additional variance in September collections that will negatively impact credit card performance statistics for the month. Specifically, the curtailment of air service and resulting FAA restrictions on commercial airlines carrying mail is expected to cause payment disruptions industry-wide for the month. Fitch also says it anticipates performance results will show higher delinquencies and slower payment rates for the September collection period. Ancillary effects on portfolio yields will hinge upon whether issuers decide to waive late and other penalty fees, an action that is being encouraged by banking regulators. If such fees are waived for the period, the resulting decline in portfolio yields could temporarily pressure excess spread. Longer term, U.S. consumers and card performance trends could come under pressure if recent events spawn a more severe and prolonged recession than previously anticipated. Further slowdowns in consumer spending and, in turn, borrowing will compound the effects of a downturn, posing growth and credit quality challenges for even the largest industry players. The retail/private label card sectors are particularly vulnerable to such scenarios whereby declining retail sales force store closings and card portfolios begin liquidating. Also, travel rewards type cards could fall out of favor if business and leisure travel cutbacks persist, potentially resulting in slower payment rates industry-wide.

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AmEx Pulls Emails

This past week has been very difficult for all of us due to the tragic events that took place last Tuesday. On behalf of the Affiliate Team here at American Express, we want to express our deepest sympathies to the families of the countless victims, as well as to all of our clients, customers and friends who have been affected by this terrible event.

Though this devastating event has had an impact on all businesses worldwide, the Affiliate Team is still committed and determined to serve our partners during this difficult time while maintaining the usual high standards of service. Our program has been and will be running as usual and all necessary contingency plans have been put in place to further serve our customers and partners.

We want to let all of our partners know that the Affiliate Program did not experience any disruption of service, all transactions have been and are being tracked and affiliates will continue to be paid in a timely manner.

Because of the sensitive nature of these events, we are asking our partners to refrain from email marketing through September 30th.

If you have questions or concerns regarding the American Express Affiliate Program, please contact americanexpress@linkshare.com or call 1-888-SHARE89 ext. 286.

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Delinquency Soars

Further evidence of the current recession was produced Friday with the release of the American Bankers Association’s ‘Consumer Credit Delinquency Bulletin’. Based on the number of credit card accounts, 3.93% were overdue during the second quarter, the highest level tabulated since 1980. In the previous quarter and in the same quarter one year ago, overdue credit card accounts were 2.99%. Based on total dollars outstanding, second quarter credit card delinquencies were 4.13%, the same as the previous quarter but significantly higher than the 3.54% figure for 2Q/00. The ABA says the stagnant economy and increased layoffs are impacting consumer finances. The ABA also says banks will continue to review their lending standards in light of the economic slowdown.

2Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1999: 4.10% 1995: 3.58% 1991: 4.48% 1987: 3.28% 1983: 2.81%
1998: 4.57% 1994: 3.06% 1990: 3.46% 1986: 3.83% 1982: 3.03%
1997: 5.24% 1993: 3.86% 1989: 3.06% 1985: 2.88% 1981: 2.86%
1996: 4.61% 1992: 4.19% 1988: 3.44% 1984: 2.80% 1980: 3.25%
Source: American Bankers Association Delinquency Bulletin

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PDA BANKING

Blueice Research, Compaq, Infovention and Intel have jointly created the
world’s first complete solution for mobile bank services. The solution that
goes under the name, “Bank in your hand” is secure, user friendly and fast.
No one else on the market can offer a similar total solution proving how
simple it can be to conduct secure wireless payments and transfers using a
handheld computer.

“With ‘Bank In Your Hand’ we want to show that there is a solution on
the market today that really makes it possible for banks to be available
wherever, whenever,” said Anna Hane, CEO at Blueice Research.
“Bank in your Hand” enables mobile services that require a high level
of security, thus primarily within the banking and finance sectors. Leading
vendors from their respective areas are contributing with products,
technical know-how, experience and knowledge. Blueice Research contributes
with its security product Multipass, combining high security and user
friendliness and offering the service provider independence from network
operators and other third parties. It is also compatible with the most
popular certificate authorities. Infovention has, with their vast
experience within the financial applications sector, created an intuitive
and functional bank application. Compaq contributes with their latest
handheld computer, the Compaq iPAQ Pocket PC, that comes equipped with a
W/LAN- and GPRS module and Intel’s StrongARM processor. The capabilities
provided by Intel Personal Internet Client Architecture (PCA) greatly
expand the opportunities for creating high-performance mobile Internet
products and services, both now and in the future.

“Blueice Research and Infovention have made the best mobile banking
service on the market. They are at the forefront of secure digital
transactions and realize the importance of combining security and
user-friendliness. Our joint ‘Bank in your hand’ project that will be
demonstrated at Networks Telecom shows the huge possibilities and areas of
usage there are for a Compaq iPAQ Pocket PC,” said Rikard Kindlund, Senior
Product Manager, Handhelds & Wireless, with Compaq.
“As a leader in Internet and wireless technologies, Intel is
committed to enable the evolution of mobile business solutions, based on
the next generation mobile client architecture, Intel PCA. This solution
emphasizes the need for powerful and scalable devices in order to conduct
secure end-to-end mobile banking transactions over a wireless media,” said
Ms. Michelle Pineda, M-commerce Business Development Manager at Intel
Wireless Competence Center (IWCC).

“It is very exciting to be able to present this complete solution.
Banks as well as other companies that have a need for secure communication
with their customers now can deploy this solution which is both cost
effective and user-friendly,” said Claes Puebla Smith, Director of Wireless
Solutions at Infovention.

“Bank in your hand” will be demonstrated at the Intel and Compaq
booths respectively at the Networks Telecom trade show in Alvso, Stockholm,
September 24-26.

About Blueice Research (blueiceresearch.com)
Founded in February 2000, Blueice Research develops security
solutions for all types of situations demanding digital identification,
signatures and receipts. The financial sector is currently the primary
target for these solutions. Blueice Research’s flagship product, the
Multipass, allows users of mobile phones and handheld computers to very
easily conduct secure transactions on the digital marketplace. The
Multipass is used to confirm the identity of the user and to create digital
signatures that cannot be later repudiated by any of the involved parties.
The Multipass runs on the most common operating systems that are used on
handheld computers today.

About Compaq

Founded in 1982, Compaq Computer Corporation (“Compaq”) is a leading
global provider of enterprise technology and solutions. Compaq designs,
develops, manufactures and markets hardware, software, solutions and
services, including industry-leading enterprise storage and computing
solutions, fault-tolerant business-critical solutions, communication
products, and desktop and portable personal computers that are sold in more
than 200 countries. Information on Compaq and its products and services is
available at .

About Infovention

Infovention is a Swedish IT consultant company that was started in
1997. The company works with all parts of the solution process, including
strategy development, process and organisational change activities, system
development, implementation and roll out. Infovention has a very strong
competence in managing larger projects on a fixed price basis, where also
advanced integration of underlying systems is critical. Important projects
are the development of Internet banks for Swedish Foreningssparbanken,
Norwegian SpareBank 1 Group and Firstviewbank in Denmark. Infovention is a
part of EDB Fellesdata AS, a leading IT systems and services supplier
within the financial services sector in Scandinavia.

About Intel

For more than three decades, Intel Corporation has developed
technology enabling the computer and Internet revolution that has changed
the world. Founded in 1968 to build semiconductor memory products, Intel
introduced the world’s first microprocessor in 1971. Today, Intel supplies
chips, boards, systems, software, networking and communications equipment,
and services that comprise the “ingredients” of computer architecture and
the Internet.

Intel’s mission is to be the preeminent building block supplier to
the worldwide Internet economy.

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Elan Signs Cal Fed

Cal Fed, the second-largest bank headquartered in California, has partnered with Elan Financial Services to expand the products and services that it offers to small business and middle market commercial customers.

Cal Fed’s commercial credit card suite of products now includes business credit cards, business credit cards with an airline mileage program, corporate cards, and purchasing cards.

“This new product line makes us extremely competitive in the marketplace,” said Kenneth Coopman, executive vice president and director of Cal Fed’s commercial banking division, “and we’re happy to be teaming with Elan to bring these products to business customers. Elan is very well respected in the banking industry.”

Business cards, offered to small business owners, work much like a consumer credit card, enabling the business owner to pay for purchases and travel expenses with a single card. Corporate cards, also known as T&E cards, are used by large- and mid-sized businesses to pay for and report on travel expenses. Purchasing cards are similar, but are used for non-travel expenses such as supplies and materials.

“Cal Fed clients will find the cards to be an excellent source of information that will enable them to control expenses, identify frequently used vendors and negotiate better pricing with them,” said Dan Roads, first vice president of Elan Financial Services.

For more information, Cal Fed customers can call Cal Fed toll-free at 1-800-CALFED4 (1-800-225-3334), or visit any Cal Fed branch.

San Francisco-based Cal Fed has approximately $61 billion in assets, 355 branches in California and Nevada, and $23 billion in deposits. Cal Fed, the principal operating subsidiary of Golden State Bancorp (NYSE:GSB), is a full-service community-oriented bank offering consumers and businesses the products and experience to help them achieve their financial goals. For more on the companies, see our Web sites at [www.calfed.com][1] and [www.goldenstate.com][2].

Elan Financial Services provides consumer, business, corporate and purchasing cards through a network of over 1,100 community banks and other financial service providers throughout the United States. Elan products enable small and mid-size financial service providers to remain competitive by matching the products offered at larger institutions. For more information go to [www.elancard.com][3].

[1]: http://www.calfed.com/
[2]: http://www.goldenstate.com
[3]: http://www.elancard.com/

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MULTI-BANK ATMS

Euronet Worldwide, Inc., a leading provider of secure electronic financial
transaction solutions, announced the launch of an ATM outsourcing program
with MultiBank, a retail banking initiative of BRE Bank S.A. in Warsaw, Poland.
Under the multiyear agreement, both parties will benefit from
increased revenue and transaction volume. Euronet will install and manage
approximately 50 ATMs located at the premises of MultiBank.
“The co-operation with Euronet enabled us to limit the necessary
investment costs and introduce a solution considered indispensable to the
Bank’s strategy in a very short time,” said Vice-President of BRE Bank
S.A., Slawomir Lachowski. “Apart from costs resulting from procurement of
the equipment and creation of the necessary infrastructure, we have also
avoided having to develop our organization background.”

In November 2000, BRE Bank S.A. launched the first Internet Banking
program in Poland, called mBank, which has gained more than 100,000
customers. mBank has participated in Euronet’s independent ATM network,
enabling mBank customers to use Euronet-branded ATMs for electronic
transactions free of charge.

Euronet’s ATM network consists of 669 ATMs in Poland and 2,400 ATMs
across nine countries in Europe. Additional software and/or network clients
in Poland include banks such as: Bank Slaski S.A., Millennium, Citibank,
Fortis, Deutsche Bank 24, Inteligo, LG Petro Bank S.A. and mobile phone
operators ERA, Centertel and PLUS GSM.

“It’s exciting to partner with clients like BRE Bank S.A. that
recognize the advantages of outsourcing to Euronet,” said Michael Brown,
Chairman and CEO of Euronet Worldwide. “I am convinced that MultiBank will
be as successful for BRE Bank as mBank was. We are proud that we can help
dynamic financial institutions such as BRE Bank achieve the leading
position in their markets.”

About Euronet Worldwide

Euronet Worldwide is an industry leader in providing secure
electronic financial transaction solutions. The company offers financial
payment middleware, financial network gateways, outsourcing and consulting
services to financial institutions and mobile operators. These solutions
enable their customers to access personal financial information and perform
secure financial transactions — any time, any place. The company has
processing centers located in the United States, Europe and Asia, and owns
and operates the largest independent ATM network in Europe. Euronet was
recently ranked number two on the Deloitte & Touche Technical Fast 500, a
ranking of the fastest-growing technology companies in North America. With
corporate headquarters in Leawood, Kansas, USA, and European headquarters
in Budapest, Hungary, Euronet serves more than 200 clients in 60 countries.
Visit our web site at www.euronetworldwide.com.

About MultiBank

MultiBank, a project implemented within Retail Banking of BRE Bank
S.A., will start servicing individual customers as early as September 2001.
The Bank’s offer is mainly addressed to demanding, active and ambitious
people with high professional and private aspirations. Apart from standard
bank products, such as savings-and-clearing accounts, a range of deposits
and credits, and payment cards, MultiBank will also offer consultancy and
services of companies belonging to the BRE Bank Capital Group, including
participation units of investment funds or the possibility to join a
pension fund.

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Recession?

Nearly half of all Americans believe the terrorist attacks on September 11 will push the U.S. into recession. According to a special survey released Friday by The Conference Board, 47% of consumers believe the recent tragedy will send the U.S. into recession while 53% do not believe these events will trigger recession. Slightly more than 30% said they or a member of their household would be postponing or canceling plans to travel by airplane because of the September 11 tragedy, but nearly 70% said they were not postponing or canceling air travel plans. Interestingly, 90% of consumers say they will not cut back on their buying plans. Meanwhile, DRI-WEFA said Friday that the resultant impacts from the attack now makes a U.S. and a global recession inevitable. Even before the attacks, economic prospects across the globe were deteriorating. Consumer confidence is likely to fall sharply, as it has in similar episodes in the past. At the same time, some service sectors-especially travel, tourism, and financial services-will be hit hard. DRI-WEFA says the good news for the USA and the rest of the world is that the stage is being set for a strong recovery by mid-2002.

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AGRIBUSINESS MASTERCARD

Alberta Treasury Branches reported
improved first quarter earnings with net income of $41.0 million for the
period ending June 30, 2001, compared to $38.6 million reported for the same
period last year. This quarter’s results increased ATB’s equity to $475.1
million, as at June 30, 2001.
“ATB has reached yet another milestone, surpassing $12 billion in assets
during its first quarter,” said Paul G. Haggis, President and CEO of ATB. “The
success of the organization over the past five years is clearly attributable
to our dedicated staff and loyal customers. ATB continues to have a bright
future in servicing the financial needs of Albertans.”

Financial Highlights

– Net interest income of $92.6 million is an increase of 6.18% from
$87.2 million for the same quarter last year.

– Non-interest expenses of $68.8 million is an increase of 5.88% from
$65.0 million for the same quarter last year.

– ATB’s efficiency ratio, non-interest expenses as a percentage of
operating revenues, is 59.37% compared to 59.26% for the same
three-month period last year.

– The allowance for credit losses, including specific and general loan
loss allowance, exceed gross impaired loans by $67.5 million. Net
impaired loans represent a negative 0.69% of total loans at June 30,
2001, compared to a negative 0.62% at June 30, 2000.

– Total assets of $12.1 billion is an increase of 11.04% over last year.

– Total loans at $9.7 billion is an increase of 5.60% over last year.

– Customer deposits of $11.3 billion is an increase of 9.24% over last
year.

Products and Services
An agreement was reached with Bank of America to provide international
banking services to ATB clients who conduct business regularly in the United
States and abroad. These services include: US dollar chequing accounts as well
as US dollar and other currently drafts and wires. In addition, Bank of
America will provide ATB with US dollar, Pound Sterling and Euro corespondent
banking services. By leveraging Bank of America’s capabilities and global
reach, we are able to streamline our international banking services through
one provider. Even more important, our customers have access to the breadth of
international banking capabilities they require when dealing south of the
border and abroad.
A five-year agreement was entered into with Can-Act Payment Services (a
wholly-owned subsidiary of BCE Emergis Inc.) for on-line tax filing and
remittance services for ATB business customers. This service allows ATB Online
business banking customers to file federal and provincial taxes around the
clock, seven days a week, with the choice of scheduled remittances for future
processing. ATB customers can now improve their business processes by
electronically filing and paying their federal and provincial corporate income
taxes, employee source deductions and federal GST through this service.
The ATB AgriBusinessCard MasterCard(R) now provides Alberta farmers with
instant access to as much as $100,000 credit. The previous credit limit on
this popular financial product was $50,000. The AgriBusinessCard is designed
especially for Alberta farm businesses. It can be used to replace an operating
loan, as a low-cost credit card, or to cover purchases of products and
services required for the operation of a farm or agribusiness.
The interest rate is based on the prime rate and is set according to the
unique circumstances of each operation. A low minimum monthly payment can
accommodate those customers that carry a balance, making it the ideal
replacement for an operating loan. This unique product provides the financial
flexibility that today’s agricultural operations require.
ATB continues to show solid growth in retail investment products. This
has been achieved through targeted products that meet the specific needs of
our customers while providing quality returns with limited risk at a time when
market volatility is front and center. Through a range of GIC and
equity-linked products, ATB’s investment products provide a combination of
security, choice, and value that is second to none.

A 30-month mortgage promotion was introduced, and proved to be a popular
choice among customers. A new product package designed for the first-time
homebuyer was also added. The First Home Package allows customers to begin
their retirement investing as ATB contributes up to $2,500 to their RSPs.
These two great options, along with our regular line-up of mortgage products
(Cashback, Lower than Prime, Best of Both, and Half Your Rate), clearly
demonstrate that ATB has the Best Mortgage Options in Alberta.

Access

ATB’s investment in the branch network continues with five new branches
under construction and eight newly constructed branches recently opening in
Cold Lake Tri-City Mall, Calgary Chinook, Calgary Crowfoot, Edmonton
Millwoods, Edmonton Oliver Village, Edmonton Rabbit Hill, Fort Saskatchewan
and Red Deer Bower Place Mall. In addition, renovations were completed at the
Banff, Beaverlodge, Calgary Brentwood, Fort MacLeod, Innisfail and First Red
Deer Place branches.

People

In April 2001, changes were made in the organizational structure to
ensure a better allocation of resources and alignment to our business plan
objectives. Larry Kaumeyer moved to Sales as Vice-President Direct Sales.
Included in his responsibilities are the Customer Contact Centre, Card Sales,
Conditional Sales, the Virtual Staff Branch, Mortgage Development and the
Investment Specialists. Sheldon Dyck moved to Sales as Vice-President Business
and Retail Sales, Urban. Sheldon is responsible for business and retail
banking in the Calgary and Edmonton markets. Ken Casey also moved to the Sales
group as Vice-President Branch Operations. He is responsible for branch
policy, support and performance, corporate services, facilities and
operational efficiency.

On the Credit side, three new appointments were made: Gord Mooney,
Vice-President Credit; Cathy Lane, Vice-President Credit Policy and Enterprise
Risk Management; and Shelly Miciak, Vice-President Credit Risk and Portfolio
Management. In addition, Erv Krawchuk was appointed Acting Vice-President
Internal Audit.

The 2nd Annual Teddy for a Toonie fundraising campaign took place at all
ATB branches and agencies throughout the province from April 16 to May 12,
2001. Customers and staff donated $2 to enter a draw for a Gund(R) teddy bear
at each ATB location. More than $135,000 was raised for the Alberta Children’s
Hospital Foundation and the Children’s Health Foundation. Both foundations are
non-profit organizations that provide funds for specialized medical services
to children throughout Alberta.

Outlook

In June, the Parliament of Canada passed Bill C-8, an Act establishing
the new Financial Consumers Agency and amending federal financial sector laws,
including the Bank Act. We expect the new law will be proclaimed later this
year. While that Act does not apply to ATB, we believe this new legislation
will accelerate the changes to Canada’s financial services sector, as
medium-sized banks and insurers may be takeover candidates. The sector has
also witnessed a number of portfolio transactions where financial institutions
sell branches and assets to competitors. The legislation will enable banks to
establish holding companies that may allow ownership interests to be sold in
certain subsidiaries or joint ventures to be created with foreign players or
direct competitors. To the extent that transactions require divestiture of
assets, ATB believes it is positioned to play a role in obtaining new business
or being on the shopping list of customers affected by branch closure or
portfolio sales. Additional changes will facilitate Canadian financial
institutions’ entry into the e-commerce arena.

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