CLS Group Meeting Joseph De Feo CEO, CLS Group President & CEO, CLS Bank International 3 October 2003 Istanbul

2 CLS Bank: a unique achievement First global banking settlement system Unprecedented co-operation across the industry Creating a global industry standard 67 shareholders, 27 vendors, eleven central banks Major business & technical achievement Extends finality of domestic RTGS settlement globally Growing number of providers of third party services Level playing field – target of one price for all

3 Australia - Australia & New Zealand Banking Group * Commonwealth Bank of Australia * National Australia Bank * Westpac Banking Corporation * Belgium - Fortis Bank * KBC Bank * Canada - Bank of Montreal * The Bank of Nova Scotia * CIBC * Royal Bank of Canada * The Toronto-Dominion Bank * Denmark - Danske Bank * Nordea * France - BNP Paribas * Caisse Nationale De Credit Agricole * Credit Lyonnais * Société Générale * Germany - Bayerische Landesbank * Commerzbank * Deutsche Bank * DZ Bank * Dresdner Bank * Hypo Vereinsbank * Westdeutsche Landesbank * Italy – Banca Intesa * UniCredito * Japan - The Bank of Tokyo-Mitsubishi, Ltd * Mizuho Corporate Bank* Norinchukin Bank * Sumitomo Mitsui Banking Corporation * The Sumitomo Trust & Banking Co., Ltd. * UFJ Bank * Luxembourg – Dexia Banque Internationale a Luxembourg * Netherlands - ABN AMRO Bank * ING Bank * Rabobank Nederland * Norway - Den norske Bank * Singapore - Development Bank Of Singapore * Oversea-Chinese Banking Corporation * United Overseas Bank * Spain - BBVA * Banco Popular Espanol * Banco Santander Central Hispano* Sweden - Skandinaviska Enskilda Banken * Svenska Handelsbanken * Switzerland - Credit Suisse * UBS * Zurcher Kantonalbank * United Kingdom - Barclays Bank * HSBC Holdings * Royal Bank of Scotland * Standard Chartered Bank * United States - American International Group * Bank of America * The Bank of New York * Bank One * Bear Stearns Securities * Citibank * The Goldman Sachs Group * JPMorgan Chase * Lehman Brothers * Mellon Bank * Merrill Lynch * Morgan Stanley & Co. * Northern Trust Corporation * State Street Bank and Trust Co. Australia - Australia & New Zealand Banking Group * Commonwealth Bank of Australia * National Australia Bank * Westpac Banking Corporation * Belgium - Fortis Bank * KBC Bank * Canada - Bank of Montreal * The Bank of Nova Scotia * CIBC * Royal Bank of Canada * The Toronto-Dominion Bank * Denmark - Danske Bank * Nordea * France - BNP Paribas * Caisse Nationale De Credit Agricole * Credit Lyonnais * Société Générale * Germany - Bayerische Landesbank * Commerzbank * Deutsche Bank * DZ Bank * Dresdner Bank * Hypo Vereinsbank * Westdeutsche Landesbank * Italy – Banca Intesa * UniCredito * Japan - The Bank of Tokyo-Mitsubishi, Ltd * Mizuho Corporate Bank * Norinchukin Bank * Sumitomo Mitsui Banking Corporation * The Sumitomo Trust & Banking Co., Ltd. * UFJ Bank * Luxembourg – Dexia Banque Internationale a Luxembourg * Netherlands - ABN AMRO Bank * ING Bank * Rabobank Nederland * Norway - Den norske Bank * Singapore - Development Bank Of Singapore * Oversea-Chinese Banking Corporation * United Overseas Bank * Spain - BBVA * Banco Popular Espanol * Banco Santander Central Hispano* Sweden - Skandinaviska Enskilda Banken * Svenska Handelsbanken * Switzerland - Credit Suisse * UBS * Zurcher Kantonalbank * United Kingdom - Barclays Bank * HSBC Holdings * Royal Bank of Scotland * Standard Chartered Bank * United States - American International Group * Bank of America * The Bank of New York * Bank One * Bear Stearns Securities * Citibank * The Goldman Sachs Group * JPMorgan Chase * Lehman Brothers * Mellon Bank * Merrill Lynch * Morgan Stanley & Co. * Northern Trust Corporation * State Street Bank and Trust Co. CLS Shareholders

4 CLS has changed market practice 1 day funding Normal - 2 day risk Historical information Possible same day settlement Normal - 2 day contract CLS eliminates Settlement risk (temporal risk) Real-time information Intraday - Timed payments Extends domestic settlement finality globally

5 CLS Bank is unique Bankers’ Bank for FX Settlement Corporate structure and governance model Legal governance and regulation Real-time links to Central Banks

6 CLS now Settling over 80,000 sides a day, around $1 trillion value Over 80 Third party customers of Member banks 54 banks settling live transactions in 11 currencies 27 Registered Vendors using CLS  brand 14 million sides settled in 1 year with a gross value of $160 trillion

7 Moving 20 Day Average of Volume

8 CLS Bank values & Net Funding

9 CLS Market Potential (Sides per day) Intra-Shareholder Transactions 100 Financial Institutions as 3 rd Party 260 Other Currencies 290 Matching Field for Custody Other 3 rd Party - Future potential plans - Very early days - Good progress Planned CLS Market Share after 5 Years 20% 50% 90%

10 CLS Benefits Major Reduction in Intra-Day Credit Usage Multilateral Netting Benefit > 90% Real Time Information on Settlement and Funds Flows Improved Funds Flow and Availability Consistent Legal Framework Operational Resilience & Reduction of Operational Risk Business Opportunities – Increased trading, Nostro Services & Third Party Services STP Settlement Risk Elimination

11 Additional benefits for Members In / Out swaps Information delivery / control Enhanced credit profile Participation in setting future direction: Strategy, Rules, Prioritisation of product development & market development plus Industry leadership & transformation Involvement in CLS Group Governance

12 Opportunities for new Settlement Members Industry transformation –Settlement finality –Leadership role in local & global market –Board & working group participation –Access to I/O Swap to further improve currency cash management –Access to Member experience and knowledge base –Settlement Member web site Risk & Operational Benefits –Risk reduction –Improved cash management –Increased trading revenues –Improved operational efficiency and cost reduction –Real time information

13 Revenue Opportunities Increased Trading Nostro Services for other CLS participating banks Potential third party service revenues Improved cash management

14 Cost reduction Reduced payment expense (MT202) –Payment processing –SWIFT costs –Reconciliation costs Potential elimination of confirmations –Nine Members have eliminated confirmations 100% settlement success –Reduced error correction expense STP benefits

15 CLS Benefits – what our members say Post-Settlement Reporting Pre-Settlement Information Eliminates Settlement Risk Reduces error rates Reduction or elimination of credit (settlement) limits Source: TowerGroup Increased trading

16 New products and services – short term 1.14 Application and infrastructure conversion - achieved 1.15 Currency expansion, NKR, DKR, SEK and SGD – now live 1.16 Matching field for Custody & CLS capacity up-grade 2003 Up-grades 2003/04 plan to add five and four new shareholders respectively. HK and New Zealand dollar, Korean won Further Currencies New Shareholders SSI Database

17 Future New Product Plans Global Liquidity Management Currency / Member Expansion  Currency/Member Expansion  New "member" category for Central Banks  Capabilities for non-CLS currencies STP for FX  e-platforms links  Enhanced STP efficiencies  SSIs database/directory  Additional Settlement Sessions  In/In Swaps  High value liquidity payments Information Services  Identify products and services consequent to the significant data, historical and real time, available to CLS Global Liquidity Management Category Product Proposals

18 CLS tomorrow New currencies New products and services New shareholders Custody enhancement Leverage the infrastructure To make CLS Bank the premier means by which financial institutions settle foreign exchange “To make CLS Bank the premier means by which financial institutions settle foreign exchange”

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