NPC Completes BPO sale

National Processing Company a leading provider of merchant credit card processing and a wholly owned subsidiary of National Processing, Inc., announced it has completed the sale of its Business Process Outsourcing (BPO) services unit to Affiliated Computer Services, Inc. for $43 million cash. This transaction completes the transition that NPC began over two years ago to re-focus on its merchant processing business.

NPC’s BPO services unit generated approximately $60 million in annual revenue from processing healthcare claims, credit card applications and airline lift tickets. As part of the transaction, ACS will acquire all of NPC’s offshore operations in Jamaica, the Dominican Republic and Barbados and approximately 75 percent of NPC’s Mexican operations.

About National Processing, Inc.

National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company (NPC(R)) is a leading provider of merchant credit card processing. National Processing is 86 percent owned by National City Corporation (NYSE: NCC) (), a Cleveland based $94 billion financial holding company. NPC supports over 600,000 merchant locations, representing nearly one out of every five Visa(R) and MasterCard(R) transactions processed nationally. NPC’s card processing solutions offer superior levels of service and performance and assist merchants in lowering their total cost of card acceptance through our world-class people, technology and service. Additional information regarding National Processing can be obtained at .


Citibank Fees

Citibank has joined the ranks of issuers pushing up late payment fees above the $29 level. In solicitations for its 0% intro APR ‘Platinum MasterCards’, Citibank is now charging a $35 late fee on balances of $1,000 or more. According to CardWatch (, Citibank formerly assessed a $29 late fee across-the-board. The new policy charges a $15 late fee on past due balances under $100, a $25 late fee for balances between $100 and $1,000, and a $35 fee for past due balances over $1,000. Citibank also recently boosted its punitive rates to a maximum of 24.99%. Fleet, CompuCredit, and Direct Merchants have also crossed the $29 late fee level. CompuCredit now charges a $35 late fee and a $35 over-limit fee on its lineup of ‘Aspire VISA’ cards. Direct Merchants Bank charges a $34 late fee on its new ‘Titanium MasterCard’. Last November, Fleet Credit Card Services began charging a $35 late fee on all its card products including the new ‘Fusion smart VISA’. Advanta was the first card issuer to institute $35 fees for holders of its business card products.


Triton Sales

Triton Systems Inc., a wholly owned operating company of Dover Corporation and the leading manufacturer of off-premise ATMs, shipped more ATM units in the first six months of 2001 than in any comparable period in the company’s history. According to Dr. Ernest L. Burdette, president and CEO of Triton, the company’s record overall unit sales increased by 21% over last year’s levels. Sales to U.S. customers rose by 10% over the same period last year, while Canadian sales rose 7%.

“Despite a global economic slowdown, demand for Triton ATMs continued to strengthen both at home and abroad,” Dr. Burdette said. “While the industry in general is reporting flat or declining sales to American customers, Triton is experiencing double-digit growth in the domestic market, the largest single segment of our business.”

This fall, Triton will introduce two major new product lines that are expected to reinforce the company’s already burgeoning sales. Making their U.S. debut October 4-5 at Thomson Financial’s Sixth Annual ATM Conference in New Orleans and in the U.K. September 18-19 at ATMIA Europe in Hyde Park, London, the new products will be strong additions to Triton’s best-selling Mako and 9600 Series product lines. The new product lineup will include a high-end PC-based model for locations with specialized needs and future application add-on capabilities, a model for retailers with low foot traffic, and an add-on advertising option that can create entirely new revenue streams for ATM operators. These new products will be available for sale through authorized Triton distributors later this year.

Triton’s record sales figures suggest that off-premise ATMs offer retailers an effective hedge against economic downturns. When small business owners see sales on conventional products slowing, many readily turn to new ATM products and services to boost revenues and restore profits.

“The key to continuing growth in this industry lies in giving retail operators and financial institutions the technological and economic choices they need to optimize ATM profitability at their particular locations,” Dr. Burdette noted. “Both our existing products and our fall product initiatives offer operators a remarkable set of profit-enhancing alternatives they can adapt to suit their individual needs.”

About Triton Systems, Inc.

As the leading provider of cash-dispensing ATMs for off-premise locations, Triton is committed to redefining and leading the retail market for cash delivery systems. Triton is the largest provider of off-premise ATMs and ATM management software in North America and has more than 55,000 installations in over 15 countries worldwide. Triton is headquartered in Long Beach, MS and is an operating company of Dover Industries, Inc., a subsidiary of Dover Corporation. For more information about Triton, please visit .



Logica PLC has been selected to assist the government to formulate a policy for the future use of smart cards, including the use of digital signatures and smart cards in the public and private sectors and by individual citizens. The government will publish consultation papers by the end of this year which will detail digital signatures for citizens and businesses, as well as the role smart cards will play. The British government will also establish policy working groups to address privacy concerns.


Diethelm on Hypercom Board

Hypercom Corp. announced that its board of directors has elected Daniel D. Diethelm, 38, as a director of the company, effective immediately.

His election expands the number of directors on the Hypercom board to seven, four of whom are outside directors.

“We are pleased to welcome Daniel to Hypercom’s board of directors,” said George Wallner, chairman of the board and chief strategist, Hypercom. “His extensive financial expertise will continue to add depth to our board. His experience will be well utilized as we move forward with our strategic plans to solidify our leadership position in the point-of-sale marketplace.”

Since 1998, Diethelm has served as co-manager and managing director of Sudan Funding LLC, which acts as a manager, investor and consultant primarily in turnaround situations. From January 2000 to January 2001, he was the president and chief executive officer of Aeropower Resources Inc., a Rolls-Royce model 250 gas turbine Authorized Maintenance Center and FAA repair station.

From 1991 to 2000, he served as chief executive officer of Sebec Corp., a management, investment and consulting firm. From 1984 to 1991, Diethelm served as chief operating officer and senior analyst at Gould Research Inc., an investment management software and database development company.

He was a member of the Gould board of directors from 1986 to 1991. He currently serves on the board of directors of Western International University and is president and a board member of the Arizona State Board for Charter Schools.

Diethelm has been a chartered financial analyst since 1986 and obtained a Bachelors of Science degree in Business Administration from the University of Arizona.

About Hypercom ([][1])

Hypercom is the leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers, and yield increased profitability for its customers.

Hypercom’s products include secure Web-enabled transaction terminals that work seamlessly with its networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications.

The company’s widely accepted ePOS-infocommerce(TM) (ePic) framework of consumer-activated, EMV-certified, touch-screen ICE (Interactive Consumer Environment) terminals enable acquirers and merchants to decrease costs, increase revenues and improve customer retention.

With headquarters in Phoenix, Hypercom is independently acknowledged as the leading provider of point-of-sale card payment terminals worldwide. Demand for Hypercom’s terminals surpassed 1 million units last year alone. Hypercom today maintains an installed base of more than 4 million terminals in more than 100 countries, which conduct more than 10 billion transactions annually.

Hypercom is a registered trademark of Hypercom Corp. ePOS-infocommerce and ICE are trademarks of Hypercom Corp. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners.



Euro Boost

Research conducted recently by VISA in the UK shows that most travellers to Europe this winter are planning to rely on their payment cards when the new single European currency euro notes and coins are introduced in Austria, Belgium, France, Finland, Germany, Greece, Italy, Ireland, Luxembourg, The Netherlands, Portugal, and Spain on January 1. Although euro was introduced in January 1999, no physical notes or coins have yet to be issued. Effective January 1, 2002, all non-cash payments within the euro zone have to be in euro. However national currency notes can still be dispensed from a limited number of ATMs. It is anticipated that within the first week of January, 90% of the euro zone ATMs will dispense only euro notes, and the remaining will be modified to dispense euro notes by February 28, 2002. After that date, the euro will be required for all purchases and the national currencies will cease to be legal tender. At that point, the 12 countries will operate only in euro. Since the euro’s introduction in 1999, VISA has processed over 16.7 million euro transactions across the European Union amounting to nearly E 920 million (US$802million). In the first quarter of 2001, approximately 1.6% of the total number of Visa transactions acquired in the European Monetary Union (EMU) region were in euro.


False Face Test

Viisage Technology, Inc., the leader in face-recognition technology and identification systems and solutions that improve security and conveniently protect personal privacy, announced its exceptional performance in Round Three of “Comparative Biometric Testing for IT Security and E-Commerce” tests conducted in 2001 by the International Biometric Group.

In the key measurement, ‘False Acceptance Rate’, which determines the ability to correctly identify the right person and reject impostors, Viisage scored an impressive 0.22% during the “Primary Visit”. This means that 99.78% of impostors attempting to break into the system were stopped. In the important “False Rejection Rate” test, the measure of how often the technology incorrectly rejects a valid user, Viisage achieved an equally impressive score of 2.69%.

Tom Colatosti, Viisage President and CEO, said, “We are delighted with the outstanding absolute results we achieved and we are especially pleased with our performance relative to other face recognition and biometric vendors. Our performance clearly demonstrates the efficacy of our MIT developed technology and our nearly 100 person years of additional R&D investments in our face recognition technology and applications.”

IBG is the leading biometric integration and consulting firm and works on behalf of both private sector and government clients to evaluate, design, and integrate biometric solutions. Other biometrics tested, in addition to the face recognition, included fingerprints, signature, iris and voice. Visit for details on testing methodology and information on obtaining complete results.

Colatosti went on to say, “IBG has a worldwide reputation for biometric expertise and objectivity. The IBG Round Two and Round Three tests are the most comprehensive current performance evaluation of biometric technologies available. Viisage’s performance in the IBG evaluation clearly demonstrates the robustness of our technology to achieve outstanding results in real world applications and certainly increases our credibility as the industry leader in providing face recognition solutions that improve security and personal privacy.”

Viisage Technology is the world leader in biometric face-recognition technology and identification systems and solutions that enhance consumer convenience, improve security and protect personal privacy. Originally developed at MIT, Viisage’s patented, accurate, non-intrusive and cost-effective face-recognition technology is widely acknowledged for its unmatched performance including speed in real-time applications, scalability for managing large image databases, and systems integration for complete customer solutions.

Viisage provides a full family of face recognition products. FaceEXPLORER(TM) is a powerful and scalable image retrieval and analysis database product, used to combat identity fraud — it is implemented in the world’s largest face recognition system with more than eight million enrolled images. FaceFINDER(TM), acclaimed for its processing speed, is the industry’s most widely implemented surveillance and identification system — it is installed in more than 80 casinos worldwide and has been deployed to improve security at premier sporting events. FaceNET(TM) provides secure authentication for PC, Internet and e-commerce connections. FacePIN(TM) offers consumers convenient and private verification for point-of-sale transactions such as ATMs. FacePASS(TM) is a practical security solution for keyless entry to secure facilities, such as offices, dormitories and government facilities. FaceTOOLS(TM) is a leadership Software Developers Kit that enables application providers the ability to develop and customize unique customer and market applications.

Additionally, Viisage’s systems annually deliver, through 1,500 U.S. systems in 1,200 locations in 15 states, more than 25 million high-quality and high-security digital-identification documents for government agencies responsible for issuing drivers’ licenses, social services cards and law enforcement credentials.



Trintech Group Plc, a global provider of
secure payment infrastructure solutions for real world, Internet and wireless
environments, announced that Barclaycard, a subsidiary of Barclays Plc, has selected Trintech’s PayWare eIssuer as one of the key
initiatives it will look to deploy in its increasingly forceful entry into the
eCommerce payments arena. The deal will enable Barclaycard to offer eWallet
functionality and will provide a more convenient shopping experience for
consumers at a wide range of leading online websites.

The wallet will also be available through Shopsmart, the UK’s leading
comparison shopping website for use at all of its retail partners.
“Partnering with Trintech and utilizing their flexible yet powerful
payment technology has enabled us to extend our reach into this arena,
allowing us the opportunity to expand into the mobile and set-top markets in
the future,” said Sonja Roberts, Director of eCommerce at Barclaycard.
“Barclaycard considers the Internet an essential medium for the delivery of
goods and services to consumers and merchants.”

Commenting on the deal with Europe’s leading issuer of credit cards, John
McGuire, CEO of Trintech was delighted to announce, “Trintech will work
closely with Barclaycard to provide the PayWare eIssuer infrastructure that
will speed up transaction times and lead to a more satisfactory and secure
payment experience for consumers and merchants.”

About Barclaycard

Barclaycard is Europe’s leading issuer of credit cards with 7.9m customers
in the UK alone. Operations abroad include Germany, France, Spain and Greece.
Barclaycard was the first and is the UK’s leading card services provider
on the Internet. 500,000 customers regularly use Barclaycard’s online account

About Shopsmart

Shopsmart Ltd is the UK’s leading Internet comparison shopping site.
Formed in 1999, Shopsmart was acquired in April 2001 by Indigosquare Ltd (a
joint venture between Barclays Bank and Nomura International PLC). The deal
combined two of the foremost players in the market to create the UK’s number
one comparison shopping site.

About Trintech

Founded in 1987, Trintech is a leading provider of secure electronic
payment infrastructure solutions for card-based transactions for physical
world commerce, eCommerce and mobile commerce. The company offers a complete
range of payment software products for credit, debit, commercial and
procurement card applications, as well as being a world leader in the
deployment of payment solutions for Internet commerce that are fully SSL and
SET(TM) compliant. Trintech’s range of scalable open systems architecture
solutions for UNIX(R) and Windows NT(TM) platforms covers consumer, merchant
and financial institution requirements for physical payments and the emerging
world of electronic commerce. Trintech can be contacted in the U.S. at 2755
Campus Drive, San Mateo, CA 94403 (Tel: 650-227-7000) and in Ireland at
Trintech Building, South County Business Park, Leopardstown, Dublin 18
(Tel: 353-1-207-4000). Trintech can be reached on the Web at

About PayWare eIssuer

Trintech’s PayWare eIssuer is an online virtual credit card purchase and
payment solution, which simplifies and secures online purchasing over the
Internet and wireless networks. It is a powerful marketing and risk reduction
tool that develops and strengthens customer relationships.
This press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, relating to, among
other things, future applications, functionality and performance of PayWare
eIssuer. Any “forward-looking statements” in this press release are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those stated. Factors that could cause or contribute to such
differences include the availability of financial resources to continue
investment in research and development, and Trintech’s ability to effectively
respond to future changes in the ePayment software market. Actual performance
may also be affected by other factors more fully discussed in Trintech’s Form
6-K for the quarter ended April 30, 2001 filed with the U.S. Securities and
Exchange Commission.


Concord Pricing

Concord EFS is mailing out letters this week to its 6,200 financial institution clients detailing a uniform pricing schedule for the ‘STAR’, ‘Cash Station’, and ‘MAC’ debit networks. At the same time, Bank of America advised Concord that although it will continue to use Concord’s processing services, it does not plan to continue its participation in the ‘STAR’ network. BofA was the only sizeable owner of Star Systems that did not sign a long-term network participation contract with Concord when STAR was acquired by Concord in February. Concord will continue to provide ATM processing services to approximately 1,100 Bank of America ATMs, plus point of sale debit gateway processing to selected Bank of America merchants. Concord says the uniform pricing structure for ‘STAR’, ‘Cash Station’, and ‘MAC’, is designed to create consistency across the networks, and to remain competitive with the PIN-secured and signature debit offerings of other national payment networks. Consolidation of Concord’s network created a coast-to-coast network of 180,000 ATMs and the nation’s largest PIN-secured debit payment network with 800,000 merchant locations. There are over 124 million ATM/debit cards that carry the ‘STAR’, ‘MAC’, or ‘Cash Station’ brands. (CF Library 2/2/01; 3/29/01)



Scotiabank delivered record earnings in the
third quarter with net income of $554 million and diluted earnings per share
of $1.04. In comparison to last year (excluding the one-time gains), both net
income and diluted earnings per share rose by 12%.
Including last year’s one-time gains on the sale of the Bank’s stock
transfer business and Solidbank, totaling 11 cents per share, net income
increased by $6 million or 1% and diluted earnings per share were unchanged at

For the nine-month period ended July 31, 2001, net income was $1,603
million or 16% higher than the same period a year ago, excluding the one-time
gains. On the same basis, diluted earnings per share were $3.00, an increase
of 41 cents, while return on equity was 17.4%, compared to 17.1%.
“Solid earnings and revenue growth continued across all business lines in
the third quarter, keeping us on track to meet or exceed our performance
targets for 2001,” said Peter Godsoe, Chairman and CEO. “Our broad-based
revenue streams and a consistent focus on cost control have enabled us to
maintain our strong earnings momentum.

“We continued to proactively manage our credit portfolios, resulting in a
significant reduction in net impaired loans,” said Mr. Godsoe. “We
strengthened our general provision by another $75 million this quarter. Our
strong corrective action is keeping us on track to meet our credit quality
targets for the end of the year.”

(1) Reported in other liabilities in the Condensed Consolidated Balance
Sheet. See Prospectus dated March 28, 2000, for convertibility

Further details are available in Notes 12 and/or 13 of the October 31,
2000, Consolidated Financial Statements presented in the 2000 Annual Report.
On April 26, 2001, the Bank redeemed all of the Series 10 preferred
shares at their stated outstanding value of ten dollars per share for a total
of seventy one thousand dollars.

Direct deposit service

Shareholders may have dividends deposited directly into accounts held at
financial institutions which are members of the Canadian Payments Association.
To arrange direct deposit service, please write to the Transfer Agent.

Dividend and Share Purchase Plan

Scotiabank’s dividend reinvestment and share purchase plan allows common
and preferred shareholders to purchase additional common shares by reinvesting
their cash dividend without incurring brokerage or administrative fees.
As well, eligible shareholders may invest up to $20,000 each fiscal year
to purchase additional common shares of the Bank. Debenture holders may apply
interest on fully registered Bank subordinated debentures to purchase
additional common shares. All administrative costs of the Plan are paid by the

For more information on participation in the Plan, please contact the
Transfer Agent.

Dividend dates for 2001

Record and payment dates for common and preferred shares, subject to
approval by the Board of Directors.

Record Date Payment Date

Jan. 2 Jan. 29

April 3 April 26

July 3 July 27

Oct. 2 Oct. 29

Duplicated communication

If your shareholdings are registered under more than one name or address,
multiple mailings will result. To eliminate this duplication, please write to
the Transfer Agent to combine the accounts.


NetBank Sells TravelMoney

NetBank, the country’s largest independent Internet bank, began selling foreign currency, travelers cheques and Visa TravelMoney over its Web site through an agreement with Thomas Cook Currency Services, a division of the Travelex Group. The bank introduced a link on its homepage to a co-branded site, powered by Travelex’s My Travel Wallet application, where NetBank customers and the general public can order the foreign currency products. The bank has branded the new service NetBank Travel Cash.

“This is an exciting offering for us,” said Michael R. Fitzgerald, NetBank president. “Over the past year, we have introduced a number of new services, including account aggregation and insurance products, to further establish NetBank as a financial services destination site for consumers. Our new currency service continues this effort. The service is available to NetBank account holders as well as visitors to our site. It gives us a great opportunity to expand our business and start new customer relationships.”

“We are thrilled to launch this service with NetBank,” said Anthony Horne, managing director of Travelex America. “NetBank is well-known for introducing secure, innovative services. The bank has a high-traffic Web site and a large number of loyal, technology-savvy customers. The deal puts our services in front of a targeted group of consumers and provides the bank with the potential for significant new revenue.”

Consumers may order foreign currency or travelers cheques in a specific currency and receive them overnight or by two-day delivery. There is a $200 minimum and $1,500 maximum per order and no service fee assessed. Orders over $500 are sent via two-day delivery at no cost. Currently, there are more than 75 different currencies and 7 foreign currency travelers cheques available for purchase. Orders can be paid for using a Visa or MasterCard(R) credit or debit card, including NetBank’s Visa Check Card.

Visa TravelMoney, a pre-paid debit card that is accepted at more than 627,000 ATMs worldwide, represents a good alternative for consumers who do not have a bank ATM or debit card or prefer not to use their bank cards abroad. The Visa TravelMoney card is loaded in U.S. dollars, up to a maximum amount of $1,500. Consumers can use the card to withdraw cash in local currencies at ATMs on the Visa or Plus(R) networks. The card is PIN-protected and can be replaced overnight if lost or stolen. There is a $300 minimum purchase amount and a $15 activation fee per card, which includes three free withdrawals.

About NetBank(R)

NETBANK, Inc., (Nasdaq: NTBK), is a financial services company that has recorded 13 consecutive quarters of profitability to date. Its wholly owned subsidiary, NetBank, Member FDIC, currently has $2.2 billion in assets and serves customers in all 50 states and 20 foreign countries. NetBank shares the operational cost savings of its branchless business model with customers through high interest rates on deposit accounts and reduced- or no-fee banking services. The bank offers a comprehensive line of banking, brokerage and lending products along with innovative services. Customers enjoy free interest-bearing checking with an ATM or Visa(R) Check Card, free unlimited online bill payment and presentment, wireless account access and an account consolidation service that allows them to manage their online accounts at other institutions through the NetBank Web site. Readers of Worth honored NetBank as a top online bank in the magazine’s 2000 and 2001 “Readers’ Choice Awards.” For more information, visit NetBank at .

About Travelex

Travelex, founded in 1976, is a diversified money business offering retail, corporate and commercial currency services to consumers, corporations and institutions throughout the world. The Travelex Group acquired Thomas Cook Global & Financial Services, the financial services division of Thomas Cook, on March 27, 2001, solidifying the company’s position as the world’s largest foreign currency specialist. Headquartered in London, Travelex is privately owned and employs approximately 6,000 staff around the world. 3i, Europe’s largest venture capital company, is a 33% shareholder. For more information about the company, please visit . For further details on My Travel Wallet, visit .



Laurentian Bank reported net income before goodwill of $23.6 million for
the quarter ended July 31, 2001, compared to $19.6 million for the same period
in 2000, an increase of 20%. Diluted earnings per share where $ 0.88 for the
third quarter of 2001, compared to $ 0.80 in 2000. Return on common
shareholders’ equity before goodwill was 13.4% for the quarter, compared to
13.6% in 2000, reflecting the impact of the increase in the Bank’s book value
from $23.83 to $26.53 over the past year.

The third quarter results include the following special items:

– A dilution gain of $12.4 million ($12.4 million after income taxes)
arising from the initial public offering (IPO) of 6.4 million treasury
common shares of B2B Trust.

– The constitution of a provision of $17.5 million ($11.4 million after
income taxes) related to the restructuring of certain Retail Banking
operations aimed at further improving efficiency, for the repositioning
of the group’s Wealth Management activities and for certain corporate

– A net income tax charge of $1.1 million principally reflecting the
impact of the recent Ontario corporate income tax rate reduction on B2B
Trust’s future income tax asset.

The impact of these special items on net income is ($0.1) million
resulting in diluted earnings per share excluding special items of $0.88 for
the third quarter of 2001, an increase of 10% over the same period last year
which had no special items.

For the first nine months of the current fiscal year, net income before
goodwill totalled $70.3 million or $2.63 diluted earnings per share, compared
to $53.0 million or $2.11 diluted earnings per share in 2000, an increase of
25%. Return on shareholders’ equity before goodwill was 13.8% for the first
nine months of 2001, while it was 12.3% in 2000.

Commenting on third quarter activities, Henri-Paul Rousseau, President
and Chief Executive Officer said: “The Bank is pleased with these results and
its stronger capital position. The Bank’s lines of business have continued to
generate growth while the Quebec Scotiabank branches acquisition has generated
the expected synergies.” He added that, “We are also proud to have completed
the outsourcing of our technology development activities to CGI in June as
well as the B2B Trust IPO in July that provides, among other benefits,
additional capital to the Bank and B2B Trust. Over the last twelve months, the
Bank has increased its capital base by $265 million, an increase of 27%. On
the other hand, the Bank has decided to take important measures for which a
special provision has been established to stimulate two strategic areas of the
Bank, namely Retail Banking and Wealth Management, areas which need to improve
efficiency. We remain prudent given the prevailing economic context and
confident that our banking operations will continue to perform well,
generating improved efficiency, growth and returns.”


The improvement of the Bank’s core profitability during the third quarter
of 2001, when compared to the third quarter of 2000, is largely explained
by the following factors:

– Excluding the $12.4 million dilution gain, total revenue grew 21% to
$153.7 million in 2001 from $127.2 million in 2000 due to the
acquisition of the Scotiabank branches, which took effect in fiscal
2001, asset growth in the lines of business and improved loan and
deposit mix. Net interest income reached 2.13% of average assets in
2001 compared to 2.05% in 2000. Core non-interest income grew from
$51.1 million in 2000 to $60.0 million in 2001 due to higher loan and
deposit fee income in retail and commercial operations.

– Excluding the $17.5 million provision, non-interest expenses increased
from $89.7 million to $107.0 million, representing an increase of 19%
over 2000. The efficiency ratio (expenses including goodwill divided by
revenues), excluding special items, improved from 70.9% in 2000 to
70.4% in 2001.

– The provision for credit losses was $9.5 million for the third quarter
of 2001 compared to $6.7 million for the same period in 2000 and $8.0
million in the previous quarter. The estimate of loan losses for the
year was revised to $35.0 million from the previous estimate of $32.0

– Excluding the effect of special items, the effective tax rate was 34.7%
compared to 36.4% last year.

TOTAL REVENUE was $166.1 million in the third quarter of 2001 compared to
$127.2 million in the same quarter in 2000, for an increase of 31%, reflecting
the Quebec Scotiabank branches acquisition, the dilution gain resulting from
the B2B Trust IPO, improved loan and deposit margins and internal growth. The
Bank’s net interest income increased 23% from $76.1 million to $93.7 million
as a result of 16% growth in average loan volumes and an improvement from
2.05% to 2.13% in interest margins due to continued improvement in the loan
and deposit mix. The net interest margin for the nine-month period improved
from 1.91% in 2000 to 2.16% in 2001. Non-interest income was $72.4 million
during the quarter compared to $51.1 million in the third quarter of 2000. The
increase is attributable to the $12.4 million dilution gain and higher lending
and deposit fee income associated with additional volumes.

NON-INTEREST EXPENSES were $124.5 million during the third quarter of
2001 compared to $89.7 million in the same period in 2000. During the quarter,
the Bank constituted a provision of $17.5 million for restructuring two
important sectors of the Bank: Retail Banking, which will take measures to
further improve its efficiency and generate increased growth and Wealth
Management, a sector which will be given increased strategic emphasis. The
provision also includes charges for certain corporate activities associated
with changes in the Bank Act and corporate structures. Without this provision,
expenses increased by 19% year over year, essentially as a result of the
Scotiabank branches acquisition, increases in performance incentives and the
cost of post-employment benefits; on the same basis, the efficiency ratio
improved from 70.9% in the third quarter of 2000 to 70.4% in the third quarter
of 2001. The number of employees (full time equivalent basis) was 3,968 at
July 31, 2001 compared to 3,608 a year ago, essentially due to the acquired
Scotiabank branches offset by the outsourcing of technology operations.

The PROVISION FOR CREDIT LOSSES was $9.5 million in the third quarter of
2001 or 0.22% of average assets versus $6.7 million or 0.18% in the third
quarter of 2000. The 2001 credit loss estimate has been increased to
$35.0 million from the previous estimate of $32.0 million and actual losses of
$25.0 million in 2000. The increase is due to growth in the loan portfolios
resulting from acquisitions, volume increases in the personal and commercial
loan portfolios and a slight increase in the level of impaired Commercial
loans. Gross impaired loans totalled $139.6 million or 1.00% of total loans at
July 31, 2001, and represents an increase of $25.2 million from July 31, 2000.
Over the last three years, the level of gross impaired loans as a percentage
of total loans has fluctuated between 0.96% and 1.01% of total loans. The
level of gross impaired loans at July 31, 2001 at 1.00% is within the three-
year historical range. Total provisions increased by $17.6 million from
$112.2 million in July 2000 to $129.8 million at July 31, 2001. Net impaired
loans were $9.9 million or 0.1% of total loans and bankers’ acceptances at the
end of the quarter compared to $2.3 million and 0.0% at July 31, 2000. The
Bank’s general provision was $85.0 million at July 31, 2001 compared to
$80.0 million at October 31 and July 31, 2000.

INCOME TAX EXPENSE for the third quarter of 2001 was $7.9 million.
Excluding the impact of special items, the charge was $12.9 million and this
represented an effective tax rate of 34.7% during the third quarter of 2001
compared to 36.4% for the same period last year.

BALANCE SHEET ASSETS stood at $17.3 billion at July 31, 2001 compared to
$15.2 billion at the same date last year, for an increase of $2.1 billion or
14%, after securitization of over $0.7 billion of mortgage loans during the
period. Balance sheet assets stood at $14.7 billion at October 31, 2000.
During the quarter, the Bank completed the securitization of residential
mortgages in the amount of $55.0 million using a new CMHC investment pool for
the first time along with several large Canadian banks. Total loans, excluding
treasury loans and before securitization, increased by $2.5 billion, of which
$1.8 billion is the result of the Scotiabank branches acquisition. The growth
generated by the Bank’s lines of business during the period amounts to
$0.7 billion, $182.0 million of which are personal loans, $238.0 million are
commercial loans and $321.0 million are residential mortgages. Total personal
deposits grew by $1.2 billion during the period, including the deposits that
were part of the acquired Scotiabank branches, increasing from $10.0 billion
in 2000 to $11.2 billion in 2001. Personal deposits represent 79% of total
deposits of $14.2 billion at July 31, 2001 compared to 82% at July 31, 2000.

ASSETS UNDER ADMINISTRATION stood at $12.75 billion at July 31, 2001 and
2000. There was a slight increase in mutual fund assets and mortgage loans
under management resulting from securitization activities offset by a slight
decrease in trust assets and the market value of self-directed plans.

TOTAL CAPITAL of the Bank, comprised of common shareholders’ equity,
preferred shares, non-controlling interest and debentures, reached
$1,260 million at July 31, 2001 compared to $995 million at July 31, 2000, an
increase of $265 million over the year. The BIS Tier 1 and Total capital
ratios were 8.1% and 12.2%, respectively, compared to 7.3% and 10.7% a year
ago. The total asset to BIS capital leverage ratio was 15.4 compared to 16.8
at July 31, 2000. During the quarter, the Bank redeemed its 10.25% Series 1
debentures in the amount of $42.2 million and issued an additional tranche of
$50 million of 6.50% Series 9 debentures. In July 2001, B2B Trust completed
its IPO and issued 6,394,000 treasury shares at $9 per share for total net
proceeds of $53.1 million; as a result, a dilution gain of $12.4 million and a
non-controlling interest of $41.3 million have been recorded by the Bank. The
Bank now holds a 74.3% interest in B2B Trust .


Significant events in the Information Technology sector of the Bank
during the quarter:

– In June 2001, the Bank completed the outsourcing of its technology
development activities to CGI. Under the ten-year agreement involving
150 employees and valued at $300 million, the Bank will continue to
oversee all aspects of systems architecture, technological
orientations, information security as well as service agreement

– In June 2001, the Bank received the 2001 Octas award from the
Fédération de l’informatique du Québec (FIQ) in the Business Solutions
category for B2B Trust and its unique technology infrastructure that
allows independent financial advisors, non-banking financial
institutions and retailers to market products and services
traditionally offered by banks.

– In August 2001, following a reference from the FIQ, the Bank received
the Award for Excellence for the same project, namely the technological
development of B2B Trust, from the Canadian Information Productivity
Awards (CIPA). The CIPA is the largest business awards program in
Canada in the field of information management.

– In August 2001, the Bank was ranked second of fourteen financial
institution Websites evaluated in Canada survey by Gomez, a North
American firm that ranks Internet sites in all sectors, for overall
customer usability in its annual Internet Banking survey. The Bank
received high marks for its on-site resources for customer service over
the telephone and through e-mail. It also was lauded for top-notch
services and information for savers and borrowers. The Bank’s Website
had been ranked third overall in the previous survey.


For the third quarter of 2001, net income contributions were 41% from
Retail Banking, 26% from B2B Trust & Agency Banking and 33% from Commercial
and Corporate Banking. The net income contributions were 22%, 42% and 36%
respectively during the third quarter of 2000.


– Net income was $8.6 million in the third quarter of 2001 versus $5.3
million in the second quarter of 2001 and $4.6 million in the third
quarter of 2000 and its efficiency ratio was 78.6%, 83.9% and 83.7%
respectively. The completed integration of the 43 Quebec Scotiabank
branches in May 2001 has generated the expected synergies.

– The Retail Banking average residential mortgage portfolio grew by $1.1
billion or 18% during the year, while the average personal loan
portfolio grew by $593 million or 38% including loans acquired from
Scotiabank and due to increases in point-of-sale financing associated
with the increase in the number of retailers including those resulting
from the Bombardier Capital alliance. We observe that growth has slowed
over the year and is associated with more consumer prudence in spending
and investments.

– The Retail Banking Sector continued to implement its SAVA (Services
Sales Added, Value Added) program.


– This line of business is composed of B2B Trust, a federally chartered
regulated financial institution, subsidiary of the Bank, that supplies
generic and complementary banking and financial products to independent
financial advisors, non-bank financial institutions and retailers
across Canada; and the Agency Banking division, which distributes
residential mortgages, term deposits, Visa cards, banking packages and
other products.

– The contribution to net income of this sector decreased to $5.5 million
in the third quarter of 2001 from $7.0 million in the second quarter of
2001 and $8.7 million in 2000. This decrease is mainly attributable to
two factors: the $1.1 million impact resulting principally from the
recent Ontario corporate income tax rate reduction and $0.7 million of
B2B Trust net income attributable to non-controlling interest.

– Excluding special items, B2B Trust maintained its profitability and its
net income was $5.7 million or $0.28 per share, return on shareholders’
equity was 16.6% and its efficiency ratio was 45.7% in the third
quarter of 2001. Including special items, B2B Trust reported net income
of $4.6 million or $0.22 per common share during the third quarter of
2001 compared to $5.3 million or $0.29 per common share in the second
quarter. B2B Trust completed its IPO of common shares during the third
quarter. A total of 6.4 million common shares were issued at $9 per
share for net proceeds of $53.1 million. These funds will be used to
support the future expansion of B2B Trust. Its Tier I and Total capital
ratios reached 13.3% and 18.3% respectively as at July 31, 2001.

– Partnership agreements announced during the quarter:

– On May 30, 2001, B2B Trust announced that it had been selected by
AIC Limited (AIC) as the exclusive supplier of a private-branded
investment loan program involving a variety of loan products
distributed through AIC’s network of registered representatives to
complement their mutual funds offering. On June 14, 2001, the
investment loan program was launched throughout Canada through AIC’s
registered representatives.

– On June 19, 2001, B2B Trust announced the signing of an letter of
intent with Cartier Partners Financial Group Inc., the largest
independent financial planning network in Canada with over 4,500
advisors, representatives and brokers. The letter provides that B2B
Trust will offer a chequing account under Cartier Partners’ brand
name to individuals with assets in the Cartier Money Market Fund. It
also calls for B2B Trust to develop and supply investment loans and
RRSP loans to Cartier Partners.

– On June 21, 2001, B2B Trust launched the Advisor’s Choice, a line of
banking products and services for independent financial advisors,
longstanding partners of the Agency Banking division of the Bank
since 1995. The line features a high-yield savings account, chequing
account with banking package, line of credit, debit card, Internet
transactional site and telebanking service.

– On August 9, 2001, B2B Trust announced the signing of an agreement
with Charles Schwab Canada regarding the development and supply of
banking and financial products. The integrated online brokerage,
advisory and portfolio management firm will market the products to
its Canadian customers under the SchwabOne brand name. The signing
of the agreement follows the agreement in principle announced by the
two companies in June 2001.


– Net income was $7.0 million in the third quarter of 2001 versus $7.3
million in 2000 and the efficiency ratio was 35.1% in 2001 versus 31.1%
in 2000.

– The average loan portfolio grew by 5.6%, before the securitization of
$200.0 million during 2001 and fee income grew by 47.0% during the
year. The Commercial and Corporate Banking sector maintained its
profitability. There was strong growth in fee income offset by an
increase in the provision for credit losses.

– On June 28, 2001, the Bank and Textron Financial Canada entered into an
alliance whereby Textron Financial Canada will offer its financial
products and services to the Bank’s customers across Canada. In turn,
the Bank will offer its complete range of Commercial banking products
and services to customers of Textron Financial Canada.


– The net contribution of other activities increased to $1.4 million in
the third quarter of 2001 from a loss of ($1.5) million in 2000. These
results reflect the dilution gain, the restructuring provision and
increased contributions from brokerage operations and Treasury and
Financial Markets in 2001.

– The Brokerage subsidiary, Laurentian Bank Securities (LBS), contributed
$0.1 million to the Bank’s net income during the quarter compared to a
loss of $(0.3) million in 2000. It presently manages total assets of
$2.1 billion, including its own assets of $1.1 billion and its
customers’ portfolios of $1.0 billion.

– On July 10, 2001, LBS, E(*)TRADE Canada and CollectiveBid Systems Inc.
entered into an agreement whereby LBS will provide quotes of its bond
inventory to the E(*)TRADE Canada bond center in online transactions
and orders of related securities.

– In 2000, BLC-Edmond de Rothschild Asset Management Inc. launched a new
family of load mutual funds in Canada with an international focus and
entered into portfolio management activities. At the end of the third
quarter of 2001, total assets under administration of this subsidiary
were approximately $1.1 billion.


This press release and related communications may contain forward-looking
statements, including statements regarding the business and anticipated
financial performance of Laurentian Bank. These statements are subject to a
number of risks and uncertainties. Actual results may differ materially from
results contemplated by the forward looking statements, principally related to
global capital market activity, changes in government monetary and economic
policies, changes in interest rates, inflation levels and general economic
conditions, legislative and regulatory developments, competition and
technological change.