MELBOURNE (Standard&Poor's) March 24, 2004--Standard&Poor's Ratings Services said today that the sanctions imposed on National Australia Bank Ltd. (NAB) by Australian Prudential Regulation Authority (APRA) will have no immediate detrimental effect on the bank's credit profile. Accordingly, the ratings on NAB (AA-/Stable/A-1+) remain unchanged. The sanctions, however, will restrain the operational and strategic flexibility of the bank, as evidenced by NAB terminating its share buyback. Details of APRA's response reinforces the seriousness of the lapses in NAB's risk controls, highlighted in a recent independent report on its unauthorized foreign exchange trades. Standard&Poor's downgraded NAB to 'AA-' on March 12, 2004, and, despite the seriousness of the risk management weaknesses, does not currently envisage further
