================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 40-F
[ ] Registration statement pursuant to Section 12 of the Securities Exchange
Act of 1934
or
[ X ] Annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended: OCTOBER 31, 2002
Commission file number: 333-49153
----------------------
NATIONAL BANK OF CANADA
(Exact name of registrant as specified in its charter)
CANADA 6021 13-2957778
(Province or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Organization) Industrial Identification No.)
Classification Code)
NATIONAL BANK OF CANADA NATIONAL BANK TOWER
125 WEST 55TH STREET 600 DE LA GAUCHETIERE WEST
NEW YORK, NEW YORK 10019 MONTREAL, QUEBEC H3B 4L2
ATTN: SERGE LACROIX (514) 394-6081
(212) 632-8580 (Address and telephone number of
(Name, address (including zip code) and registrant's
telephone number (including area code) of principal executive offices)
agent for service in the United States)
----------------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:
Title of Each Class: Name of Each Exchange On Which Registered:
- -------------------- ------------------------------------------
NONE NONE
For annual reports, indicate by check mark the information filed with this form:
[x] Annual Information Form [x] Audited Annual Financial Statements
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.
Title of Each Class: Outstanding at October 31, 2002:
- ------------------- -------------------------------
COMMON 182,596,351
FIRST PREFERRED, SERIES 12 5,000,000
FIRST PREFERRED, SERIES 13 7,000,000
Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to
the Registrant in connection with such Rule. [ X ] Yes 82-03764 [ ] No
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days. [ ] Yes [ x ] No
================================================================================
ANNUAL INFORMATION FORM
DATED NOVEMBER 29, 2002
2002 ANNUAL REPORT
[NATIONAL BANK OF CANADA LOGO]
ANNUAL INFORMATION FORM
Portions of the Annual Information Form are disclosed in the following documents
and are incorporated herein by reference:
o the annual report to shareholders for the fiscal year ended October 31, 2002
("Annual Report"); and
o the Management Proxy Circular dated as at January 21, 2003 ("Circular").
PAGE REFERENCE
---------------
INCORPORATED BY
REFERENCE FROM
---------------
ANNUAL
TABLE OF CONTENTS REPORT CIRCULAR
- ----------------- ------ --------
CORPORATE STRUCTURE
o Name and Incorporation P 122
o Subsidiaries of the Bank
(Intercorporate Relationships) P 114, 120
o Real Estate N 7, P 91, P 122
o Number of Employees P 113
o Designated Countries T 12, P 63
------------------------- ----------------
GENERAL DEVELOPMENT OF THE BUSINESS
o Five-Year History P 66-69, P 122
o Significant Acquisitions and Dispositions N 26, P 106, N 27, P 107
o Trends P 31, N 18, P 98-99
------------------------- ----------------
DESCRIPTION OF BUSINESS
o Description of Business P 20-30
- Main Products and Services P 20-30
- Competition P 16-19
- Environmental Risk P 122
- Risks Linked to Operations Abroad T 12, P 63
o Results by Segment N 25, P 105-106
o Assets Under Administration/Management T 9, P 62
o Earning Assets Abroad N 20, P 102
o Loans by Borrower Category T 10, P 62
o Personal, Business and Mortgage Loans P 78
o Impaired Loans N 5, P 90, T 13, P 64
o Interest on Impaired Loans T 14, P 65
o Provision for Credit Losses T 4, P 58
------------------------- ----------------
MAIN CONSOLIDATED FINANCIAL INFORMATION
o Quarterly Results P 66-69
o Cash P 124
o Dividend Policy P 124
------------------------- ----------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF P 34-53
FINANCIAL CONDITION AND RESULTS
------------------------- ----------------
MARKET FOR TRADING NATIONAL BANK P 124
SECURITIES
------------------------- ----------------
DIRECTORS AND OFFICERS
o Board of Directors, Members of the Board
and Committees of the Board P 116 Schedule: b, c
o Executive Officers P 118
o Shareholdings of Directors
and Executive Officers P 123
------------------------- ----------------
ADDITIONAL INFORMATION P 123
------------------------- ----------------
FORWARD-LOOKING STATEMENTS P 31, 35
Legend
P: Page
N: Note
T: Table
Page 121
NATIONAL BANK OF CANADA 2001-2002
SUPPLEMENTARY INFORMATION
ANNUAL INFORMATION FORM
CORPORATE STRUCTURE
NAME AND INCORPORATION National Bank of Canada (the "Bank") is a chartered bank
governed by the Bank Act (Canada). The Bank's roots date back to 1859 with the
founding of the Banque Nationale in Quebec City. Its current charter is the
result of a series of amalgamations, notably with The Provincial Bank of Canada
in 1979, with the Mercantile Bank of Canada in 1985, and with National Bank
Leasing Inc., its wholly-owned subsidiary in 1992. Although no change was made
to its statutes, in March 2001 the Bank amended section 4.1 of By-Law I of the
General By-Law to reduce the minimum and maximum number of directors and, in
March 2002, it amended section 4.6 of By-Law I to increase the aggregate
remuneration which may be paid to its directors.
GENERAL DEVELOPMENT OF THE BUSINESS
FIVE-YEAR HISTORY
FISCAL 1997-1998 The Bank diversified its revenue streams while remaining true
to its primary mission as a commercial bank. One of the year's highlights was
the strong performance of National Bank shares. In fact, the total return to
common shareholders of the Bank (share appreciation plus dividends) exceeded
that of other banks and trust companies, which were harder hit by the downturn
on world financial markets.
FISCAL 1998-1999 The Bank acquired First Marathon which it integrated with
Levesque Beaubien Geoffrion, its securities brokerage subsidiary, to form
National Bank Financial, a Canada-wide brokerage and investment bank.
FISCAL 1999-2000 Committed to improving the quality of services offered to its
various client groups and better positioning itself with respect to the growth
in electronic commerce and services, the Bank signed a partnership agreement
with a preferred supplier of information technology services.
FISCAL 2000-2001 In keeping with its business model of being a super-regional
bank offering such value added services as investment banking and wealth
management to its individual and business clients, the Bank sold its asset-based
lending operations in the United States as well as its merchant payment
solutions.
FISCAL 2001-2002 The Bank strengthened its position in potentially lucrative
markets through major partnership agreements and acquisitions, particularly that
of Altamira, a Canadian mutual fund manager and distributor. In addition, the
Bank significantly improved the quality of its lending portfolio as evidenced by
the level of gross private impaired loans outstanding which amounted to $479
million as at October 31, 2002 compared to $932 million as at October 31, 2001.
DESCRIPTION OF BUSINESS
ENVIRONMENTAL RISK In order to minimize environmental risk, several years ago
the Bank notably implemented a procedure setting out its environmental
responsibilities when granting credit and taking possession of assets. To date,
the risks involved have not had a material impact on the Bank's operations.
REAL ESTATE With respect to real estate holdings, as at October 31, 2002 the
Bank owned, for its operations, 114 buildings in Canada, and leased 450
premises, including six abroad. It also held two other buildings through the
intermediary of its wholly-owned subsidiary, National Bank Realty Inc. With
respect to the premises of its head office located in Montreal, the Bank held a
long-term lease of 20 years, ending on February 9, 2020. The Bank's consolidated
fixed assets at cost, less accumulated amortization, and excluding furniture,
equipment and leasehold improvements, amounted to $65 million as at October 31,
2002. Information concerning the Bank's fixed assets is provided in Note 7 to
the consolidated financial statements (page 91).
Page 122
DIRECTORS AND OFFICERS
EXECUTIVE OFFICERS The members of senior management mentioned on page 118 have
held various management, executive or senior executive positions with the Bank
during the past five years, with the exception of: G.F. Kym Anthony who, from
1993 to 1998, was employed by TD Securities Inc. as Chair and Chief Executive
Officer and, from 1998 to 1999, was employed by First Marathon Securities Ltd.
as Chief Operating Officer and Executive Vice-President; Olivier Lecat who, from
1992 to 1997, was employed by Royal Bank as Vice-President -- Treasury and
Investment Banking, Internal Audit Services and, from 1997 to 2001, as
Vice-President -- Corporate and Investment Banking, Internal Audit Services;
Michel Lozeau who, from 1995 to 2001, was employed by Oracle Corporation Canada
as Senior Manager -- Consulting, Central Region, Regional Vice-President --
Consulting, Canada and Group Vice-President -- Consulting, Canada, respectively;
Luc Papineau who, from 1994 to 1997, was employed by Levesque Beaubien Geoffrion
Inc. as Vice-President and Branch Manager and, from 1997 to 1998, was employed
by Merrill Lynch Canada Inc. as Vice-President and Branch Manager; Jean-Charles
Petitclerc who, from 1994 to 2000, was employed by Bank of Nova Scotia as Senior
Vice-President -- Systems Operations and Technical Services; Michel Tremblay
who, from 1993 to 1998, was employed by ING Canada as Senior Vice-President --
Investments, and by ING Investment Management as Senior Vice-President and
Managing Director; and W. David Wood who, from 1993 to 1999, was employed by
Correspondent Network as President.
SHAREHOLDINGS OF DIRECTORS AND EXECUTIVE OFFICERS To the best of the Bank's
knowledge, the directors and executive officers of the Bank as a group
beneficially own less than 1% of the outstanding common shares of the Bank.
ADDITIONAL INFORMATION The Bank undertakes to provide to any person, upon
request, a copy of the Annual Information Form of the Bank, together with a copy
of any document incorporated therein by reference, a copy of the annual
consolidated financial statements for the year ended October 31, 2002 with the
accompanying auditors' report, a copy of any subsequent quarterly financial
statements, a copy of the Circular in respect of its most recent Annual Meeting
of Shareholders that involved the election of directors, and a copy of any other
document that is incorporated by reference into a preliminary short form
prospectus or a short form prospectus whenever the securities of the Bank are
part of a distribution. The Circular enclosed with the Notice, dated January 21,
2003, of the Annual Meeting of Shareholders scheduled for March 12, 2003,
contains additional information such as the remuneration and indebtedness of
directors and executive officers, the principal holders of Bank shares, the
stock options awarded and the interests of insiders in material transactions.
Copies of these documents may be obtained upon request from the Corporate
Secretary's Office of the Bank, 600 de La Gauchetiere West, 4th Floor, Montreal,
Quebec, Canada H3B 4L2.
DISTRIBUTION NOTICE The Annual Information Form must be accompanied by copies of
all the documents incorporated into it by reference when it is provided to
security holders or other interested parties.
Notice dated November 29, 2002
Page 123
UNDERTAKINGS
The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or to transactions in said securities.
CONTROLS AND PROCEDURES
Based on their evaluations as of a date within 90 days of the filing
date of this report, the Registrant's President and Chief Executive Officer and
Senior Vice President, Finance and Technology have concluded that the
Registrant's disclosure controls and procedures (as defined in Rule 13a-14(c)
under the Exchange Act of 1934, as amended (the "Exchange Act")) are effective
to ensure that information required to be disclosed by the Registrant in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms.
There were no significant changes in the Registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation including any corrective actions with regard to
significant deficiencies and material weaknesses.
The Registrant believes that it is not required to file this report
pursuant to the provisions of the Securities Exchange Act of 1934, as amended,
but is doing so on a voluntary basis.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NATIONAL BANK OF CANADA
/s/ Real Raymond
------------------------------------
Real Raymond
President and Chief Executive Officer
Date: March 19, 2003
CERTIFICATIONS
I, Real Raymond, President and Chief Executive Officer of National Bank
of Canada, certify that:
1. I have reviewed this annual report on Form 40-F of National Bank of
Canada;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (and persons
performing the equivalent functions):
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
/s/ Real Raymond
-------------------------------------
Real Raymond
President and Chief Executive Officer
Date: March 19, 2003
I, Michel Labonte, Senior Vice President, Finance and Technology, of
National Bank of Canada, certify that:
1. I have reviewed this annual report on Form 40-F of National Bank of
Canada;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (and persons
performing the equivalent functions):
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
/s/ Michel Labonte
---------------------------------------------
Michel Labonte
Senior Vice President, Finance and Technology
Date: March 19, 2003
EXHIBIT INDEX
The following exhibits have been filed as part of the Annual Report:
Exhibit Description
------- -----------
1 National Bank of Canada's 2002 Annual Report which includes:
o Audited consolidated financial statements and the notes
thereto, together with the Auditors' report (pages 73 to 111);
o Management's Discussion and Analysis for the year ended
October 31, 2002 (pages 33 to 72);
2 Management Proxy Circular of National Bank of Canada, dated
January 23, 2003 issued in connection with the March 12, 2003
Annual Meeting of Shareholders
3 Consent of PricewaterhouseCoopers LLP and Samson Belair/Deloitte &
Touche, General Partnership
4 Comments by Auditors for U.S. Readers on Canada-U.S. Reporting
Differences
5 Certificates