**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**





**Washington
      D.C. 20549**


**FORM
      20-F**




o
            Registration
                  Statement pursuant to Section 12(b) or 12(g) of the Securities
                  Exchange Act of 1934





or





x
            Annual
                Report pursuant to Section 13 or 15(d) or of the Securities Exchange
                Act of 1934 for the fiscal year ended December 31,
                2005




or





o
            Transition
                Report pursuant to Section 13 or 15(d) or of the Securities Exchange
                Act of 1934.





or





o
            Shell
                Company Report pursuant to Section 13 or 15(d) of the Securities
                Exchange
                Act of 1934.
              Date
                  of event requiring this shell company report
                  ____________________.
                For
                    the transition period from _______________ to
                    _______________.




Commission
      file number 333-49153.




**NB
      FINANCE, LTD.**


(Exact
      name of Registrant as specified in its charter)





**Bermuda**


(Jurisdiction
      of incorporation or organization)




**Clarendon
        House**
 **2
        Church Street**
 **Hamilton
        HM 11**
 **Bermuda**


(Addresses
      of principal executive offices)





Securities
      registered or to be registered pursuant to Section 12(b) of the Act:
      None





Securities
      registered or to be 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:
      None





Indicate
      the number of outstanding shares of each of the issuers' classes of capital
      or
      common stock as of the close of the period covered by the annual
      report:





12,000
      shares of common stock, par value $1.00 per share









Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) have been subject to such filing requirements
      for
      the past 90 days :


Yes x No
o








Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and larger accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):


Large
      accelerated filer o  Accelerated filer o  Non-accelerated filer x




Indicate
      by check mark which financial statement item the registrant has elected to
      follow:


Item
      17 x Item
      18
o





If
      this
      is an annual report, indicate by check mark whether the registrant is a shell
      company (as defined in Rule 12b-2 of the Exchange Act):


Yes
o No
x





2


FORWARD-LOOKING
      STATEMENTS





From
      time
      to time, NB Finance, Ltd. (the "Company" or "NB Finance") makes written and
      oral
      forward-looking statements, included in this annual report on form 20-F for
      filling with the U.S. Securities and Exchange Commission (“SEC”), in reports to
      shareholders, in press releases and in other communications. For all such
      statements, the Company claims the protection of the safe harbor for
      forward-looking statements contained in the United States Private Securities
      Litigation Reform Act of 1995. These forward-looking statements include, among
      others, statements with respect to the economy, market changes, the achievement
      of strategic objectives, certain risks as well as statements with respect to
      our
      beliefs, plans, expectations, anticipations, estimates and intentions. These
      forward-looking statements are typically identified by the words “may”, “could”,
“should”, “would”, “suspect”, “outlook”, “believe”, “anticipate”, “estimate”,
“expect”, “intend”, “plan”, and words and expressions of similar
      import.





Forward-looking
      statements are not guarantees of future performance. By their very nature,
      such
      forward-looking statements require us to make assumptions and involve inherent
      risks and uncertainties, both general and specific. There is significant risk
      that express or implied projections contained in such statements will not
      materialize or will not be accurate. A number of factors could cause actual
      future results, conditions, actions or events to differ materially from the
      targets, expectations, estimates or intentions expressed in the forward-looking
      statements. Such differences may be caused by factors, many of which are beyond
      the Company’s control, which include, but are not limited to, changes in North
      American and/or global economic and financial conditions (particularly
      fluctuations in interest rates, currencies and other financial instruments),
      liquidity, market trends, regulatory developments and competition in geographic
      areas where the Company operates, technological changes, the possible impact
      on
      our businesses of international conflicts and other developments including
      those
      relating to the war on terrorism and the Company’s anticipation of and success
      in managing the risks implied by the foregoing.





The
      Company cautions that the foregoing list of important factors is not exhaustive.
      Investors and others who intend to base themselves on the Company’s
      forward-looking statements should carefully consider the above factors as well
      as the uncertainties they represent and the risk they entail. The Company
      therefore cautions readers not to place undue reliance on these forward-looking
      statements. The Company does not undertake to update any forward-looking
      statements, whether written or oral, that may be made from time to time by
      or on
      behalf of the Company.





3


**PART
      I**





ITEM
      1:
      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS





Not
      Applicable.





ITEM
      2 **:** OFFER
      STATISTICS AND EXPECTED TIMETABLE





Not
      Applicable.





ITEM  3:
      KEY
      INFORMATION





**Selected
      Financial Data**




(Per
      Canadian GAAP)


**Year
                Ended**
              **December
                31, 2005**
            
            **Year
                Ended**
              **December
                31, 2004**
            
            **Year
                Ended**
              **December
                31, 2003**
            
            **Year
                Ended**
              **December
                31, 2002**
            
            **Year
                Ended**
              **December
                31, 2001****Statement
                of Income Data:**Operating
                revenues
            
            
            $69,974,957
            
            
            $95,211,882
            
            
            $44,484,134
            
            
            $43,385,203
            
            
            $41,962,693Income
                (loss) from Continuing Operations
            
            
            $4,010,926
            
            
            ($7,937,023
            )
            
            $6,915,778
            
            
            $6,117,624
            
            
            $5,136,962Net
                income (loss)
            
            
            $4,010,926
            
            
            ($7,937,023
            )
            
            $6,915,778
            
            
            $6,117,624
            
            
            $5,136,962Income
                (loss) from Continuing Operations per Common Share
            
            
            $334.24
            
            
            ($661.42
            )
            
            $576.32
            
            
            $509.80
            
            
            $428.08**Balance
                Sheet Data:**Total
                assets
            
            
            $671,047,829
            
            
            $675,579,983
            
            
            $700,113,693
            
            
            $635,586,789
            
            
            $579,818,559Total
                liabilities
            
            
            $516,823,782
            
            
            $525,366,862
            
            
            $541,963,549
            
            
            $484,352,423
            
            
            $434,701,817Shareholder’s
              Equity
            
            
            $154,224,046
            
            
            $150,213,121
            
            
            $158,150,144
            
            
            $151,234,366
            
            
            $145,116,742Capital
              Stock
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000Number
              of Shares
            
            
            12,000
            
            
            12,000
            
            
            12,000
            
            
            12,000
            
            
            12,000Cash
                Dividends Declared per Common Share
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A





4





(Per
      U.S.GAAP)




**Year
                Ended**
              **December
                31, 2005**
            
            **Year
                Ended**
              **December
                31, 2004**
            
            **Year
                Ended**
              **December
                31, 2003**
            
            **Year
                Ended**
              **December
                31, 2002**
            
            **Year
                Ended**
              **December
                31, 2001****Statement
                of Income Data:**Operating
                revenues
            
            
            $69,340,772
            
            
            $94,420,042
            
            
            $44,484,134
            
            
            $43,385,203
            
            
            $41,962,693Income
                (loss) from Continuing Operations
            
            
            $3,376,741
            
            
            ($8,728,863
            )
            
            ($3,860,503
            )
            
            $6,117,624
            
            
            $5,136,962Net
                income (loss)
            
            
            $3,376,741
            
            
            ($8,728,863
            )
            
            ($3,860,503
            )
            
            $6,117,624
            
            
            $5,136,962Income
                (loss) from Continuing Operations per Common Share
            
            
            $281.40
            
            
            ($727.41
            )
            
            ($321.71
            )
            
            $509.80
            
            
            $428.08**Balance
                Sheet Data:**Total
                assets
            
            
            $671,047,829
            
            
            $675,579,983
            
            
            $700,113,693
            
            
            $635,586,789
            
            
            $579,818,559Total
                liabilities
            
            
            $514,283,012
            
            
            $522,191,907
            
            
            $537,996,754
            
            
            $484,352,423
            
            
            $434,701,817Shareholder’s
                Equity
            
            
            $156,764,817
            
            
            $153,388,076
            
            
            $162,116,939
            
            
            $151,234,366
            
            
            $145,116,742Capital
                Stock
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000
            
            
            $12,000Number
                of Shares
            
            
            12,000
            
            
            12,000
            
            
            12,000
            
            
            12,000
            
            
            12,000Cash
                Dividends Declared per Common Share
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A




**Exchange
      Rate**




References
      to $ are to United States dollars; references to C$ are to Canadian dollars.
      As
      of December 31, 2005, the Canadian dollar exchange rate was C$1.1630 = $1.00
      and
      certain amounts stated herein reflect such exchange rate. The exchange rates
      were obtained from the Bank of Canada. All financial statements are denominated
      in United States dollars.





Exchange
                Rate in $C to $1High
            
            LowJuly
                2005
            
            
            1.2436
            
            
            1.2027August
                2005
            
            
            1.2185
            
            
            1.1871September
                2005
            
            
            1.1888
            
            
            1.1627October
                2005
            
            
            1.1882
            
            
            1.1647November
                2005
            
            
            1.1937
            
            
            1.1669December
                2005
            
            
            1.1731
            
            
            1.1518Year
                Average in $C to $1December
                2000
            
            
            1.48520240December
                2001
            
            
            1.54841633December
                2002
            
            
            1.57035976December
                2003
            
            
            1.40146175December
                2004
            
            
            1.30152024December
                2005
            
            
            1.21163240





5





**Risk
      Factors**





There
      are
      no risk factors relevant to the Company other than those associated with
      servicing and administering Mortgage Loans insured by Canada Mortgage and
      Housing Corporation, an agency of the Government of Canada ("CMHC").





ITEM  4:
      INFORMATION ON THE COMPANY





**History
      and Development of the Company**





NB
      Finance is a wholly owned subsidiary of National Bank of Canada (the " Bank " ).
      There
      are no securities of the Company currently registered or expected to be
      registered pursuant to the Securities Act of 1933, as amended, or traded
      publicly on any exchange. The Bank owns and, pursuant to the OSFI Order (as
      defined below), will continue to own, all 12,000 issued and outstanding shares
      of common stock, par value $1.00 per share (the " Common
      Stock " )
      of the
      Company. The Common Stock is the only outstanding class of securities of the
      Company. The Company has issued no other securities.





The
      Company was incorporated on September 3, 1997 under the *Bermuda*  *Companies
      Act 1981* .
      The
      Company does not have any subsidiaries. The Company's business objective is
      to
      acquire residential first mortgages insured by CMHC, that are secured by real
      property located in Canada and to issue obligations secured by such real
      property (the "Promissory notes") and other similar obligations to NB Capital
      Corporation ( " NB
      Capital " ),
      an
      affiliated company. The Promissory notes currently consist of sixty-five
      hypothecation loans issued to NB Capital by the Company that have recourse
      only
      to the Mortgage Loans. Hypothecation loans are loans secured by the pledge
      of
      mortgages as security therefor. The Mortgage Loans consist of sixty-five pools
      of, at December 31, 2005, an aggregate of 12,244  CMHC-insured
      residential first mortgages. Pursuant to an order (the "OSFI Order"), dated
      September 2, 1997, of the Office of the Superintendent of Financial Institutions
      Canada, the Company is not permitted to incur any indebtedness or engage in
      any
      business activities other than ownership of Mortgage Loans and activities
      incidental thereto. The Company’s registered offices are located at Clarenton
      House, 2 Church Street, Hamilton HM11, Bermuda.





As
      of
      December 31, 2005, the Company has issued Promissory notes to NB Capital in
      the
      aggregate principal amount of approximately $410 million. The proceeds from
      the
      issuance of the Promissory notes, in addition to a capital contribution from
      the
      Bank, have been used to acquire the Mortgage Loans from the Bank for
      approximately C$682 million ($587 million). Accordingly, as of December 31,
      2005, the Promissory notes were overcollateralized by $177 million. The Company
      has acquired all or substantially all of such Mortgage Loans from the Bank
      and/or affiliates of the Bank on terms comparable to those that could be
      obtained by the Company if such Mortgage Loans were purchased from unrelated
      parties. As of the date of this Form 20-F, the Company has not entered into
      any
      agreements with any third parties with respect to the purchase of Mortgage
      Loans.





The
      Company and NB Capital have entered into separate Mortgage Loan Assignment
      Agreements (together, the "Mortgage Loan Assignment Agreements") (See Item
      19,
      Exhibits 10.41 to 10.44) pursuant to which the Company assigned its entire
      right, title and interest in, to and under the Mortgage Loans to NB Capital
      and
      permitted NB Capital to administer, perform and enforce the Mortgage Loans.
      Accordingly, no interest or principal payments with respect to the Mortgage
      Loans are made directly to the Company. Pursuant to a Servicing Agreement
      originally dated September 3, 1997 and all subsequent amendments, between NB
      Capital and the Bank (the "Servicing Agreement"), the Mortgage Loans are
      serviced by the Bank.





For
          information regarding the Company's revenue and operating profit, see the
          Company's financial statements, beginning on page F-1.
 
 6





**Business
      Overview**





Description
      of the Mortgage Loans





All
      of
      the Mortgage Loans were originated in accordance with underwriting policies
      customarily employed by the Bank, or with underwriting policies acceptable
      to
      the Bank. With respect to its underwriting policies, the Bank will not make
      any
      residential mortgage loans that exceed a loan to value ratio of 75% unless
      such
      loan is insured. If the residential mortgage loan is CMHC-insured (i) a cash
      down payment of between 5% and 24.9% is required, (ii) the monthly payment
      for
      capital, interest, taxes and heating must not exceed 32% of the gross monthly
      revenue of the borrower and (iii) the monthly payment for capital, interest,
      taxes, heating and all other monthly payments (including, without limitation,
      personal loans, lease payments and credit card debt service) must not exceed
      40%
      of the net monthly revenue of the borrower. Additionally, for all Mortgage
      Loans, an external credit check must be positive. When a loan is insured, an
      additional amount may be added to the principal amount of the mortgage loan
      representing the premium related thereto. The premium rates vary in accordance
      with the principal amount of the loan. Generally, the greater the loan to value
      ratio, the greater the premium rate. As is generally the case in the Canadian
      residential mortgage business, such underwriting policies are derived from
      CMHC-approved underwriting criteria.





As
      a
      CMHC-approved lender, the Bank has access to the Canadian National Housing
      Act
      mortgage insurance program. All of the Mortgage Loans are insured by CMHC
      pursuant to that program. The bulk of those loans were insured at origination.
      Whether a loan is insured through the CMHC portfolio insurance program, at
      origination or during the term of the loan, the insurance is valid until the
      expiration of the loan.





All
      of
      the Mortgage Loans are balloon mortgages. Accordingly, the Mortgage Loans do
      not
      provide for the full amortization of the principal balance thereof equally
      over
      their term to maturity and a principal payment equal to the original balance
      less any principal amount paid will be due on each Mortgage Loan at maturity.
      Balloon mortgages are the most prevalent type of mortgage offered by Canadian
      mortgage lenders. At the expiration of the term, the mortgage is generally
      renewed, based on then current market conditions, for a new term. Although
      the
      Bank offers terms varying from 3 months to 10 years, terms exceeding 5 years
      are
      relatively rare. Moreover, although the Bank offers monthly, semi-monthly and
      weekly pay mortgages, most of the Mortgage Loans are monthly pay mortgages.
      In
      general, loans are amortized over a period not exceeding 25 years.





The
      Mortgage Loans provide for limited prepayment rights. For example, typically
      up
      to 10% of the original principal amount of a Mortgage Loan may be prepaid once
      annually without penalty. Moreover, a Mortgage Loan may also be prepaid without
      penalty if the mortgaged property is sold and the mortgagor enters into a new
      mortgage with the same terms and conditions as the Mortgage Loan. In most other
      circumstances, prepayments or renegotiations of either the interest rate or
      the
      term of a Mortgage Loan will be subjected to prepayment penalties. During the
      first five years following the most recent interest adjustment date, such
      penalties are a resultant of a yield maintenance clause. After five years,
      such
      penalties will be limited to three months of interest.





Description
      of the Promissory notes





The
      Promissory notes issued by the Company to NB Capital are comprised of sixty-five
      hypothecation loans. As of December 31, 2005, the principal amount of the
      Promissory notes liability was approximately $410 million. Each of the
      sixty-five hypothecation loans comprising the Promissory notes issued by the
      Company is secured by a pool of Mortgage Loans. As of December 31, 2005,
      there were 12,244 Mortgage Loans in an aggregate amount of approximately C$682
      million ($587 million). The value of each pool of Mortgage Loans comprising
      the
      Mortgage Loans exceeds the principal amount of the hypothecation loan that
      it
      secures. Accordingly, the Mortgage Assets issued by the Company are
      overcollateralized by the Mortgage Loans. The aggregate amount of such
      overcollateralization is, as of December 31, 2005, approximately $177 million.
      NB Capital acquired the Promissory notes issued by the Company pursuant to
      the
      terms of certain loan agreements.





7


Each
      Promissory note issued by the Company is recourse only to the Mortgage Loans
      securing such Promissory note. Each pool of Mortgage Loans is comprised of
      entirely CMHC-insured residential first mortgages. Each Promissory note issued
      by the Company is further secured by the residential real properties underlying
      such CMHC-insured residential first mortgages. Such residential real properties
      are located primarily in Quebec, Ontario and New Brunswick. Since the Mortgage
      Loans are insured, the Company expects little or no loss of principal or
      interest. However, CMHC insurance does not guarantee timely payment of interest
      and principal. The Promissory notes have maturities ranging from January 2006
      to
      January 2015. The Promissory notes pay interest at rates ranging from 5.49%
      to
      10.21%, with an average rate of approximately 7.76% per annum.





Payments
      of interest are made monthly out of payments on the Mortgage Loans. Pursuant
      to
      the Mortgage Loan Assignment Agreements, NB Capital receives all scheduled
      payments made on the Mortgage Loans, retains a portion of any such payments
      equal to the amount due and payable on the Promissory notes issued by the
      Company and remits the balance, if any, to the Company. NB Capital also retains
      a portion of any prepayments of principal in respect of the Mortgage Loans
      equal
      to the proportion of such prepayments that the outstanding principal amount
      of
      the Mortgage Loan bears to the outstanding principal amount of the Promissory
      notes issued by the Company, which amount would be applied to reduce the
      outstanding principal amount of the Promissory notes issued by the Company.
      Repayment of the Promissory notes issued by the Company is secured by an
      assignment of the Mortgage Loans to NB Capital pursuant to the Mortgage Loan
      Assignment Agreements, which are governed by the laws of Bermuda.





The
      assignment of the Mortgage Loans by the Company to NB Capital is without
      recourse. NB Capital has a security interest in the real property securing
      the
      Mortgage Loans and, subject to fulfilling certain procedural requirements under
      applicable Canadian law, is entitled to enforce payment on the Mortgage Loans
      in
      its own name if a mortgagor should default thereon. In the event of such a
      default, NB Capital has the same rights as the Company to force a sale of the
      mortgaged property and satisfy the obligations of the Company out of the
      proceeds. In the event of a default in respect of a Mortgage Loan, the amount
      of
      the Promissory notes issued by the Company will be reduced by an amount equal
      to
      the portion thereof allocable to the defaulting mortgage.





Following
      repayment of the Promissory notes issued by the Company, NB Capital will
      reassign any outstanding Mortgage Loans (without recourse) and deliver them
      to,
      or as directed by, the Company. All payments in respect of the Mortgage Loans
      are made in Canadian dollars. The amounts due (in US$) on the Promissory notes
      issued by the Company are retained by NB Capital free and clear of and without
      withholding or deduction for or on account of any present or future taxes
      imposed by or on behalf of Bermuda or any political subdivision thereof or
      therein.





Advisory
      Agreement





The
      Company entered into the Advisory Agreement with the Bank to administer the
      day-to-day operations and affairs of the Company. The Bank shall (i) monitor
      the
      credit quality of the real estate mortgage assets acquired, managed, financed,
      held and/or disposed of by the Company and (ii) advise the Company with respect
      to the acquisition, management, financing and disposition of the Company’s real
      estate mortgage assets. The Bank may, with the approval of a majority of the
      Board of Directors, subcontract all or a portion of its obligations under the
      Advisory Agreement to one or more related or unrelated third parties. The Bank
      will not, in connection with the subcontracting of any of its obligations under
      the Advisory Agreement, be discharged or relieved in any respect from any of
      its
      obligations under the Advisory Agreement. As of the date of this Form 20-F,
      the
      Bank has not subcontracted any of its obligations under the Advisory
      Agreement.





The
      Advisory Agreement had an initial term of one year and has been renewed one
      time
      for an additional on year period. The last renewal was dated June 15, 2006
      and
      its expiration date is June 15, 2007. The Company may terminate the Advisory
      Agreement at any time upon 60 days’ prior written notice. The Bank received an
      advisory fee equal to 50,000$ for fiscal year 2005 and is entitled to receive
      50,000$ for fiscal year 2006, payable in equal quarterly installments with
      respect to the advisory and management services provided by it to the
      Company.





8


**Description
      of Property**





The
      registered offices of the Company are located at Clarendon House, 2 Church
      Street, Hamilton HM11, Bermuda. The Company neither owns nor leases any
      properties.





ITEM  5:
      OPERATING AND FINANCIAL REVIEW AND PROSPECTS





**General**





The
      Company's sole business purpose is to acquire Mortgage Loans and to issue the
      Promissory notes, and other similar obligations, to NB Capital. Pursuant to
      the
      OSFI Order, the Company is not permitted to incur any indebtedness or engage
      in
      any business activities other than ownership of the Mortgage Loans and
      activities incidental thereto.





**Operating
      Results**





Net
      income from continuing operations for the year ended December 31, 2005 was
      $4,010,926, which represents an increase of $11,947,949 or 150.53% over the
      year
      ended December 31, 2004 when the loss from continuous operations was $7,937,023
      which represented a decrease of $14,852,801 or 214.77% over the prior year
      ended
      December 31, 2003. The increase for 2005 was principally due to a reduction
      of
      the change in fair value on derivative financial instruments of $36,013,653
      which was partially compensated by a reduction of the foreign exchange gain
      on
      mortgage loans transactions of $26,471,645 which were recognized in 2005.
      Revenues for the year ended December 31, 2005, the year ended December 31,
      2004
      and the year ended December 31, 2003, were $69,974,957, $95,211,882 and
      $44,484,134, respectively.





Sixty-five
      percent of revenues were derived from the Mortgage Loans. The Promissory notes
      issued by the Company are collateralized by the Mortgage Loans that consist
      of
      sixty-five pools of CMHC-insured residential first mortgages and which are
      secured by real property located in Canada. The remaining balance of the
      revenues for the year ended December 31, 2005 and the year ended December 31,
      2004, resulted from a foreign exchange gain on mortgage loans transactions
      of
      $23,001,482 and $49,473,127 respectively and bank interest.





Expenses
      for the year ended December 31, 2005, the year ended December 31, 2004 and
      the
      year ended December 31, 2003 totaled $65,964,031, $103,148,905 and $37,568,356,
      respectively, of which $33,995,506, $35,811,136 and $37,529,935, respectively,
      represent interest on Promissory notes. As well, during the year ended December
      31, 2005 and December 31, 2004, losses of $31,273,510 and $67,287,163
      respectively were recorded related to the valuation of derivative financial
      instruments at their fair value.





During
      the year ended December 31, 2005, no dividend was authorized on the Company’s
      Common Stock.





**Liquidity
      and Capital Resources**





The
      Company's revenues are primarily derived from its Mortgage Loans. The Company's
      principal short-term liquidity needs are, with respect to the Promissory notes,
      to pay principal when due (maturity dates range between January 2006 to January
      2015) and monthly interest payments. Pursuant to the OSFI Order, the Company
      is
      not permitted to incur any indebtedness or engage in any business activities
      other than ownership of Mortgage Loans and activities incidental thereto.





9


As
      of
      December 31, 2005, approximately $410 million of Promissory notes issued by
      the
      Company were overcollateralized by approximately C$682 million ($587 million)
      of
      Mortgage Loans. The Company believes that the amounts generated from the payment
      of interest and principal on such Mortgage Loans will provide more than
      sufficient funds to make full payments with respect to the Promissory notes
      issued by the Company and sufficient funds to meet its operating expenses.
      Pursuant to the Mortgage Loan Assignment Agreements, all payments made in
      respect of the Mortgage Loans are made to NB Capital (through the Bank as
      servicer under the Servicing Agreement). Any such amount in excess of the amount
      due and payable on the Promissory notes is remitted to the Company and used
      to
      fund the acquisition of additional Mortgage Loans.





The
      Company does not require any capital resources for its operations and,
      therefore, it is not expected to acquire any capital assets in the foreseeable
      future.





**Critical
      Accounting Policies**





In
      December 2001, the SEC requested that all registrants discuss their most
      "critical accounting policies" in management's discussion and analysis of
      financial condition and results of operations. The SEC indicated that a
      "critical accounting policy" is one which is both important to the portrayal
      of
      the Company's financial condition and results and requires management's most
      difficult, subjective or complex judgments, often as a result of the need to
      make estimates about the effect of matters that are inherently uncertain. We
      believe, based on our current business, that there are no critical accounting
      policies in connection with the preparation of the financial statements of
      NB
      Finance.





**Off-Balance
      Sheet Arrangements**





Notes
      2,
      8 and 9 to the financial statements included in this form 20-F on pages F-1
      through F-9 discuss the Company’s off-balance sheet arrangements.





**Tabular
      Disclosure of Contractual Obligations**





The
      Promissory notes are issued to NB Capital, a wholly-owned subsidiary of the
      Bank.


Payments
                  due by periodLess
              
              
              
              
              
              Morethan
                  1
              
              1-3
              
              3-5
              
              than
                  5Total
              
              year
              
              years
              
              years
              
              yearsPromissory
                  notes
              
              
              $409,978,987
              
              
              $79,840,304
              
              
              $134,130,050
              
              
              $73,667,216
              
              
              $122,341,417




10





ITEM  6:
      DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





**Directors
      and Executive Officers**





The
      Board
      of Directors of the Company consists of the individuals set forth below. The
      Company currently has five executive officers, five officers and no employees.
      The Company does not anticipate that it will require any employees.





As
      of
      December 31, 2005, the persons who are directors and executive officers of
      the
      Company are as follows:





**Name**
            
            **Age**
            
            **Position
                and Offices Held**
            
            **Director
                Since**Donna
                Goral
            
            48
            
            Director,
                Vice-President
            
            May
                2001Martin
                Ouellet
            
            52
            
            Director,
                President
            
            November
                1997Monique
                Baillergeau
            
            47
            
            Director
            
            May
                2003Serge
                Lacroix
            
            47
            
            Director
            
            July
                2002





The
      only
      other executive officer of the Company is Jean Dagenais (Chief Financial
      Officer). Allison L. Smith (Secretary), Michael Ashford (Assistant Secretary),
      Martin-Pierre Boulianne (Assistant Secretary), Valérie Pelletier (Assistant
      Secretary) and Vanessa Fontana (Assistant Secretary) are officers of the
      Company.





Donna
      Goral was appointed President and Chairman of the Board of NB Capital on March
      21, 2006 and has also been Vice-President - Taxation, USA Operations for the
      Bank since 1992. Ms. Goral’s tax experience also includes positions with KPMG
      Peat Marwick and Ernst & Whinney. She is a member of the American Institute
      of Certified Public Accountants and the New York State Society of
      CPAs.





Serge
      Lacroix resigned as Chairman of the Board and President of NB Capital and
      Director of NB Finance on February 1, 2006. He was Chairman of the Board and
      President of NB Capital since June 2002 and Director of NB Finance since July
      2002. He has been with National Bank of Canada or one of its subsidiaries since
      1993 in various positions, most recently as Managing Director and Senior
      Vice-President of the New York Branch. Mr. Lacroix was also General Manager,
      President and CEO of NBC Financial (UK) Ltd. and Senior Vice-President at
      National Bank Financial. From 1982 until 1993, he held various positions at
      Wood
      Gundy in London, Montreal and Vancouver. Prior to that, he was a Trader at
      Nesbitt Thompson Inc. and he started his career in 1976 as a Foreign Exchange
      Trader with Banque Canadienne Nationale.





Vincent
      Lima was appointed Director of NB Capital in March 2006 and Drector of NB
      Finance in May 2006. Vincent joined National Bank of Canada in December 1987,
      and over the years has held several positions such as Assistant Controller,
      Assistant Vice President/Credit Analyst - Commercial Financing Group, and Vice
      President - Cross Border Financing Group. He started his career in 1978 with
      a
      major international bank in the Money Transfer/Cash Management Dept., and over
      the years has held various positions in both operations and accounting with
      various international banks.





Monique
      Baillergeau was appointed Director of NB Capital and NB Finance in May 2003.
      She
      has been with the National Bank of Canada New York branch since February 1986.
      In 1998, she was assigned to manage the Operations of the London branch. In
      May
      2003, she accepted the position of Vice President in charge of Operations and
      Administration in New York.





11


Jean
      Dagenais joined the National Bank of Canada in 1990 as Manager and Chief
      Accountant. In 1997, he was promoted to Vice-President. As such, he is
      responsible for the preparation of the Bank’s consolidated financial statements
      as well as other financial information presented to management, shareholders
      and
      regulatory authorities. He began is career in 1980 as external auditor with
      a
      major international accounting firm. From 1985 to 1990, he held various
      positions in accounting and financial reporting with large corporations. He
      studied at the University of Sherbrooke, where he obtained a Bachelor in
      Administration. He was admitted to the Order of Certified Management Accountants
      in 1982 and to the Order of Chartered Accountants in 1983.





Martin
      Ouellet has been an employee of the Bank since 1980. He has held different
      positions within the Treasury and Financial Markets division of the Bank.
      Recently, he has acted as the Vice-President and Treasurer, responsible for
      Asset and Liability Management, funding and liquidity management. He is a
      Director and the President of NB Finance.





**Compensation
      of Directors and Officers**





The
      Company is a wholly owned subsidiary of the Bank. Each Director and Officer
      of
      the Company is also an employee of the Bank, except for Michael
      Ashford  and  Allison
      L. Smith. The Company did not pay any form of compensation to its Officers
      or
      Directors for the year ended December 31, 2005. Any compensation paid to the
      Directors and Officers of the Company is paid to such individual by the Bank
      as
      compensation for all functions performed for the Bank and its subsidiaries.
      The
      Company did not set aside or accrue any amount during the year ended December
      31, 2005 to provide pension, retirement or similar benefits for Directors and
      Officers pursuant to any existing plan provided or contributed to by the
      Company.





**Options
      to Purchase Securities from Registrant**





See " History
      and Development of the Company " under
      Item 4: INFORMATION ON THE COMPANY above. No options, warrants or rights were
      granted to any individual with respect to the Common Stock or other securities
      of the Company.





**Audit
      Committee**





The
      Company does not have an audit committee. As a result, all functions ordinarily
      performed by an audit committee are performed by the entire Board of Directors.
      There are no committees of the Board of Directors.





ITEM
      7:
      MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





**Control
      of the Company**





The
      Company is a wholly owned subsidiary of the Bank. Pursuant to the OSFI Order,
      the Bank will at all times continue to hold all outstanding shares of Common
      Stock. The Common Stock is the only outstanding voting security of the Company.
      The Common Stock is not registered with the SEC. There are no arrangements
      known
      to the Company the operation of which may at a subsequent date result in a
      change in control of the Company.





**Related
      Party Transactions**





On
      February 24, 2005 and August 29, 2005, the Company acquired from the Bank,
      its
      direct parent, nine pools of Mortgage Loans pursuant to nine Deeds of Sale
      of
      Mortgage Loans, dated February 24, 2005, and August 29, 2005 respectively,
      between the Bank and the Company. During the fiscal year ended December 31,
      2005, there were no other material transactions (completed or proposed) to
      which
      the Company and any director or officer of the Company, any relative or spouse
      thereof or the Bank had any direct or indirect material interest.





12


As
      of
      December 31, 2005, the Company has issued Promissory notes to NB Capital, an
      affiliated company, in the aggregate principal amount of approximately $410
      million. The proceeds from the issuance of Promissory notes, in addition to
      a
      capital contribution from the Bank, have been used to acquire the Mortgage
      Loans
      from the Bank for approximately C$682 million ($587 million). See " History
      and Development of the Company " under
      Item 4: INFORMATION ON THE COMPANY above





ITEM
      8:
      FINANCIAL INFORMATION





**Consolidated
      Statements and Other Financial Information**





See
      page
      F-1 to F-9 hereto.





13
 
  *Financial
          statements of*
 
 **NB
          FINANCE, LTD.**
 
 *December
          31, 2005, 2004 and 2003*
 
 
  **NB
          FINANCE, LTD.**
 **Table
          of contents**
 
 
 Report
                    of Independent Registered Chartered AccountantsStatements
                    of income and retained earnings
                **F-1**Balance
                    sheets
                **F-2**Statements
                    of cash flows
                **F-3**Notes
                    to the financial statements
                **F-4
                    to F-9**
 
 
 
 Deloitte
                    & Touche LLP
                  1
                    Place Ville Marie
                  Suite
                    3000
                  Montreal
                    QC H3B 4T9
                  Canada
                  
                  Tel:
                    (514) 393-7115
                  Fax:
                    (514) 390-4111
                  www.deloitte.ca
 
 **Report
          of Independent Registered Chartered Accountants**
 
 To
          the
          Board of Directors and Shareholder of
 NB
          Finance, Ltd. (the "Company")
 
 We
          have
          audited the accompanying balance sheets of NB Finance, Ltd. as of
          December 31, 2005 and 2004 and the related statements of income and
          retained earnings and cash flows for each of the three years in the period
          ended
          December 31, 2005. These financial statements are the responsibility of
          the
          Company’s management. Our responsibility is to express an opinion on these
          financial statements based on our audits.
 
 We
          conducted our audits in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance whether the financial
          statements are free of material misstatement. The Company is not required
          to
          have, nor were we engaged to perform, an audit of its internal control
          over
          financial reporting. Our audits included consideration of internal control
          over
          financial reporting as a basis for designing audit procedures that are
          appropriate in the circumstances, but not for the purpose of expressing
          an
          opinion on the effectiveness of the Company's internal control over financial
          reporting. Accordingly, we express no such opinion. An audit also includes
          examining, on a test basis, evidence supporting the amounts and disclosures
          in
          the financial statements, assessing the accounting principles used and
          significant estimates made by management, as well as evaluating the overall
          financial statement presentation. We believe that our audits provide a
          reasonable basis for our opinion.
 
 In
          our
          opinion, the financial statements referred to above present fairly, in
          all
          material respects, the financial position of the Company as of December 31,
          2005 and 2004, and the results of its operations and its cash flows for each
          of
          the three years in the period ended December 31, 2005, in conformity with
          accounting principles generally accepted in Canada.
 
 
 
 Montreal,
          Canada
 
 March
          4,
          2006
 
 
  **NB
          FINANCE, LTD.**
 **Statements
          of** **Income
          and Retained Earnings**
 **years
          ended December 31, 200** **5,
          2004 and 2003**
 **(in
                  U.S. dollars)****2005**
                ****
                **2004**
                ****
                **2003**
                ********
                ****
                **$**
                ****
                **$**
                ****
                **$****Revenue**Interest
                    - mortgage loans
                
                
                45,162,493
                
                
                44,186,352
                
                
                41,734,223Foreign
                    exchange gain
                
                
                23,001,482
                
                
                49,473,127Amortization
                    of the premium paid or thediscount
                    received on mortgage loans, net
                
                
                -
                
                
                926,848
                
                
                2,349,020Interest
                    - bank
                
                
                1,810,982
                
                
                625,555
                
                
                400,89169,974,957
                
                
                95,211,882
                
                
                44,484,134**Expenses**Interest
                    - promissory notes
                
                
                33,995,506
                
                
                35,811,136
                
                
                37,529,935Change
                    in fair value on derivative financialinstruments
                
                
                31,273,510
                
                
                67,287,163
                
                
                -Amortization
                    of the premium paid or thediscount
                    received on mortgage loans, net
                
                
                510,494
                
                
                -
                
                
                -Professional
                    fees
                
                
                91,933
                
                
                47,010
                
                
                36,536Advisory
                    fees to the parent company
                
                
                83,333
                
                
                -
                
                
                -Other
                
                
                9,255
                
                
                3,596
                
                
                1,88565,964,031
                
                
                103,148,905
                
                
                37,568,356**Net
                    income (loss)**
                
                
                4,010,926
                
                
                (7,937,023
                )
                
                6,915,778Retained
                    earnings, beginning of year
                
                
                17,865,563
                
                
                25,802,586
                
                
                18,886,808**Retained
                    earnings, end of year**
                
                
                21,876,489
                
                
                17,865,563
                
                
                25,802,586
 
 F-1
  **NB
          FINANCE, LTD.**
 **Balance
          S** **heets**
 **as
          at December 31, 200** **5
          and 2004**
 **(in
                    U.S. dollars)****2005**
                
                **2004******
                
                **$**
                
                **$****Assets**Cash
                    and cash equivalents
                
                
                75,953,975
                
                
                69,318,317Mortgage
                    loans (Note 3)
                
                
                586,807,311
                
                
                600,229,408Premium
                    paid on mortgage loans (Note 4)
                
                
                6,277,799
                
                
                3,967,386Interest
                    receivable
                
                
                2,004,617
                
                
                2,060,747Prepaid
                    expenses
                
                
                4,127
                
                
                4,125671,047,829
                
                
                675,579,983**Liabilities**Promissory
                    notes (Note 5)
                
                
                409,978,987
                
                
                409,905,811Due
                    to an affiliated company (Note 6)
                
                
                9,680,137
                
                
                9,474,360Due
                    to the parent company
                
                
                12,500
                
                
                -Discount
                    received on mortgage loans (Note 4)
                
                
                4,568,320
                
                
                2,083,089Liabilities
                    related to derivative financial instruments
                
                
                89,976,895
                
                
                100,708,647Deferred
                    transition gain on derivative financial instruments
                
                
                2,540,770
                
                
                3,174,955Accounts
                    payable
                
                
                66,173
                
                
                20,000516,823,782
                
                
                525,366,862**Shareholder’s
                    equity**Capital
                    stock (Note 7)
                
                
                12,000
                
                
                12,000Contributed
                    surplus
                
                
                132,335,558
                
                
                132,335,558Retained
                    earnings
                
                
                21,876,489
                
                
                17,865,563154,224,046
                
                
                150,213,121671,047,829
                
                
                675,579,983
 
 F-2
  **NB
          FINANCE, LTD.**
 **Statements
          of Cash F** **lows**
 **years
          ended December 31, 200** **5,
          2004 and 2003**
 **(in
                    U.S. dollars)****2005**
                
                **2004**
                
                **2003****$**
                
                **$**
                
                **$****Cash
                    flows from (used in) operating activities**Net
                    income (loss)
                
                
                4,010,926
                
                
                (7,937,023
                )
                
                6,915,778Item
                    not affecting cash resourcesAmortization
                    of the premium paid or the(discount
                    received) on mortgage loans, net
                
                
                510,494
                
                
                (926,848
                )
                
                (2,349,020
                )Amortization
                    of deferred transition gainon
                    derivative financial instruments
                
                
                (634,185
                )
                
                (791,840
                )
                
                -Foreign
                    exchange gain
                
                
                (23,018,648
                )
                
                (49,405,025
                )
                
                -Change
                    in fair value on derivative financialinstruments
                
                
                (7,947,605
                )
                
                31,363,757
                
                
                -Changes
                    in non-cash operating working capital itemsFinancial
                    derivative assets and liabilities
                
                
                -
                
                
                -
                
                
                2,125,573Interest
                    receivable
                
                
                56,130
                
                
                288,343
                
                
                (170,413
                )Prepaid
                    expenses
                
                
                (2
                )
                
                (4,125
                )
                
                -Due
                    to an affiliated company
                
                
                205,777
                
                
                (1,637,556
                )
                
                4,134,609Accounts
                    payable
                
                
                46,173
                
                
                (1,554
                )
                
                9,159Due
                    to a parent company
                
                
                12,500
                
                
                (3,117,446
                )
                
                3,117,446(26,758,440
                )
                
                (32,169,317
                )
                
                13,783,132**Cash
                    flows from (used in) financing activities**Issue
                    of promissory notes
                
                
                170,774,678
                
                
                170,612,901
                
                
                176,972,855Reimbursements
                    of promissory notes
                
                
                (170,701,502
                )
                
                (209,040,546
                )
                
                (198,485,678
                )73,176
                
                
                (38,427,645
                )
                
                (21,512,823
                )**Cash
                    flows from (used in) investing activities**Increase
                    in mortgage loans
                
                
                (213,468,347
                )
                
                (213,266,127
                )
                
                (221,216,070
                )Repayments
                    of mortgage loans
                
                
                247,110,114
                
                
                294,041,893
                
                
                248,107,098Discount
                    (Premium) on mortgage loans
                
                
                (320,845
                )
                
                (589,274
                )
                
                (2,377,404
                )33,320,922
                
                
                80,186,492
                
                
                24,513,624Net
                    increase in cash and cash equivalents
                
                
                6,635,658
                
                
                9,589,530
                
                
                16,783,933Cash
                    and cash equivalents, beginning of year
                
                
                69,318,317
                
                
                59,728,787
                
                
                42,944,854**Cash
                    and cash equivalents, end of year**
                
                
                75,953,975
                
                
                69,318,317
                
                
                59,728,787Additional
                    cash flow informationInterest
                    paid
                
                
                34,093,118
                
                
                36,189,578
                
                
                37,755,484
 
 Cash
          and
          cash equivalents comprise cash on hand and temporary investments.
 
 F-3
 
 **NB
              FINANCE, LTD.**
 **Notes
              to the financial statements**
 **years
              ended December 31, 2005 and 2004**
 **(in
              U.S. dollars)**
 
 **1.**
                **Incorporation
                    and nature of operations**
  NB
          Finance, Ltd. (the “Company”) is a wholly-owned subsidiary of National Bank of
          Canada and was incorporated in Bermuda on September 3, 1997. The Company’s
          principal activity is holding mortgage loans.
 
 **2.**
                **a)
                    Summary of significant accounting
                    policies**
  *Financial
          statements*
  The
          financial statements are prepared in accordance with accounting principles
          generally accepted (“GAAP”) in Canada and are expressed in U.S.
          dollars.
 
 *Mortgage
          loans*
  Mortgage
          loans are recorded at their principal amounts less allowances for credit
          losses.
 
 *Estimates*
  The
          preparation of financial statements in accordance with accounting principles
          generally accepted in Canada requires management to make estimates and
          assumptions that affect the amounts reported in the financial statements
          and
          accompanying notes. Although these estimates are based on management’s best
          knowledge of current events and actions that the Company may undertake
          in the
          future, actual results could differ from the estimates.
 
 *Translation
          of foreign currencies*
  Monetary
          assets and liabilities denominated in foreign currencies are translated
          into
          U.S. dollars at year-end rates of exchange. Revenue and expense items are
          translated at rates prevailing at the transaction dates. Gains and losses
          resulting from translation are reflected in the statement of
          income.
 
 *Derivative
          financial instruments*
  The
          Company uses cross currency swaps to manage the currency risk exposure
          of the
          mortgage loans. Before 2004, the foreign exchange gains and losses of these
          instruments were recognized the same way as the foreign exchange gains
          and
          losses on the hedged assets in the statement of income. Since 2004, these
          derivative financial instruments do not qualify for hedge accounting and
          are
          carried at fair value as assets or liabilities with changes in fair value
          recorded in the statement of income.
 
 *Income
          taxes*
  The
          Company is not subject to any income taxes on the Bermuda income.
 
 *Premium
          paid or discount received on mortgage loans*
  The
          premium paid or discount received on mortgage loans is amortized on a
          straight-line basis on the residual term of mortgage pools.
 
 F-4
 
 **NB
                FINANCE, LTD.**
 **Notes
                to the financial statements**
 **years
                ended December 31, 2005 and 2004**
 **(in
                U.S. dollars)**
 
 **2.**
                **b)
                    Recent accounting standards not yet
                    adopted**
 
 *Financial
          Instruments - Recognition and Measurement, Hedges and Comprehensive
          Income*
 
 In
          January 2005, the CICA issued three new standards: “Financial Instruments -
          Recognition and Measurement,” “Hedges,” and “Comprehensive Income.” The main
          consequences of implementing these standards are described below.
 
 All
          financial assets and liabilities will be carried at fair value in the Balance
          Sheet, except for items classified in the following categories, which will
          be
          carried at amortized cost: loans and receivables, held-to-maturity securities
          and financial liabilities not held for trading. Realized and unrealized
          gains
          and losses on financial assets and liabilities that are held for trading
          will be
          recorded in the Statement of Income. Unrealized gains and losses on financial
          assets that are available for sale will be recorded in other comprehensive
          income until realized, at which time they will be recorded in the Statement
          of
          Income. All derivatives, including embedded derivatives that must be accounted
          for separately, will be recorded at fair value in the Balance
          Sheet.
 
 For
          fair
          value hedges, changes in the fair value of the derivatives and corresponding
          changes in fair value of the hedged items attributed to the risk being
          hedged
          will be recognized in the Statement of Income. For cash flow hedges, the
          effective portion of the changes in the fair values of the derivative
          instruments will be recorded in other comprehensive income until the hedged
          items are recognized in the Statement of Income.
 
 These
          new
          standards will apply to the Company effective January 1, 2007. The impact
          of
          implementing these new standards on the Company’s financial statements cannot
          yet be determined as it is dependent on the Company’s unsettled positions and
          hedging strategies and on market volatility at the time of
          transition.
 
 **3.**
                  **Mortgage****loans**
 
 The
          Company acquired mortgage loans expressed in Canadian dollars from National
          Bank
          of Canada. The mortgage loans are secured by residential first mortgages
          and
          insured by the Canada Mortgage and Housing Corporation.
 
 The
          mortgage loans have maturity dates varying from January 2006 to January
          2015. These loans bear interest at rates ranging from approximately 4.88%
          to
          9.35% with a weighted average rate of 6.74% per annum.
 
 Cross
          currency swaps with the parent company convert the Canadian dollars exposure
          of
          the mortgage loans to U.S. dollars. These swaps are not eligible under
          the hedge
          accounting guideline AcG-13.
 
 F-5
 
 **NB
                FINANCE, LTD.**
 **Notes
                to the financial statements**
 **years
                ended December 31, 2005 and 2004**
 **(in
                U.S. dollars)**
 
 **3.**
                **Mortgage
                    loans (Continued)**
 
 2005
                
                2004$
                
                $Mortgage
                    loans, beginning of year
                
                
                600,229,408
                
                
                633,914,616Acquisitions
                
                
                213,468,347
                
                
                213,266,127Principal
                    repayments
                
                
                (247,110,114
                )
                
                (294,041,893
                )Foreign
                    exchange difference
                
                
                20,219,670
                
                
                47,090,558Mortgage
                    loans, end of year
                
                
                586,807,311
                
                
                600,229,408
 
 The
          scheduled principal repayments are as follows:
 
 $2006
                
                
                120,190,0772007
                
                
                145,036,0802008
                
                
                37,012,1882009
                
                
                50,329,8852010
                
                
                57,633,5622011
                
                
                92,516,6042012
                
                
                56,421,8222013
                
                
                10,728,2092014
                
                
                5,511,5392015
                
                
                11,427,345
 
 The
          mortgage loans are insured by the Canada Mortgage and Housing Corporation
          so
          that the credit risk is negligible. Moreover, based on the current financial
          structure, the exposure to interest rate risk is minimal.
 
 **4.**
                **Premium
                    paid or discount received on mortgage
                    loans**
  The
          premium paid or discount received is amortized on a straight-line basis
          on the
          residual term of mortgages acquired. The amortization amounts to an expense
          of
          $510,494 in 2005 (revenue of $926,848 in 2004 and a revenue of $2,349,020
          in
          2003).
 
 F-6
 **NB
              FINANCE, LTD.**
 **Notes
              to the financial statements**
 **years
              ended December 31, 2005 and 2004**
 **(in
              U.S. dollars)**
 
 **5.**
                **Promissory
                    notes**
  The
          promissory notes are issued to NB Capital Corporation, a wholly-owned subsidiary
          of the parent company.
 
 2005
                
                2004$
                
                $Promissory
                    notes, interest rate ranging between 5.49%and
                    10.21%, repayable by monthly variableinstalments
                    until January 2015
                
                
                409,978,987
                
                
                409,905,811
 
 The
          scheduled principal repayments for the next ten years are as
          follows:
  $
                
                
                
                $2006
                
                
                79,840,304
                
                
                2011
                
                
                64,300,7102007
                
                
                109,484,543
                
                
                2012
                
                
                37,244,5652008
                
                
                24,645,507
                
                
                2013
                
                
                8,063,9242009
                
                
                34,060,036
                
                
                2014
                
                
                4,142,7822010
                
                
                39,607,180
                
                
                2015
                
                
                8,589,436
 
 **6.**
                **Transactions
                    with an affiliated company**
  During
          the year, the Company incurred interest expenses to NB Capital Corporation
          in an
          amount of $33,995,506 ($35,811,136 in 2004 and $37,529,935 in
          2003).
 
 The
          amount due to an affiliated company as at December 31, 2005 and 2004
          represents interest and principal reimbursements due on the promissory
          notes to
          NB Capital Corporation.
 
 The
          Company received $1,810,982 ($625,555 in 2004 and $400,891 in 2003) in
          interest
          on bank accounts held with National Bank of Canada (International)
          Limited.
 
 **7.**
                  **Capital****stock**
 
 Authorized
                  12,000  common
                    shares, $1 par value2005
                
                2004$
                
                $Issued
                    and fully paid12,000  common
                    shares
                
                
                12,000
                
                
                12,000
 
 F-7
 
 **NB
                FINANCE, LTD.**
 **Notes
                to the financial statements**
 **years
                ended December 31, 2005 and 2004**
 **(in
                U.S. dollars)**
 
 **8.**
                **Fair
                    values of financial
                    instruments**
  The
          following table presents the fair value of balance sheet financial instruments,
          except for instruments whose fair value is estimated to be equal to their
          carrying value. This fair value is determined using the valuation methods
          and
          assumptions described below.
 
 Fair
          value represents the amount at which a financial instrument could be exchanged
          in an arm’s length transaction between willing parties. The fair values
          presented are estimates derived using present value or other valuation
          techniques and may not be indicative of the net realizable value.
  **2005**
                
                **2004**Carrying
                    Value
                
                Fair
                    Value
                
                Carrying
                    Value
                
                Fair
                    Value$
                
                $
                
                $
                
                $**Assets**Mortgages
                    loans
                
                
                586,807,311
                
                
                600,898,338
                
                
                600,229,408
                
                
                618,544,013**Liabilities**Promissory
                    notes
                
                
                (409,978,987
                )
                
                (422,649,877
                )
                
                (409,905,811
                )
                
                (431,272,811
                )
 
 The
          cross
          currency swaps have maturity dates ranging from January 2006 to January
          2015 and
          exchange rates ranging from ($C/$US) 1.20034 to 1.6118.
 
 The
          following table presents the notional amount of the cross currency swap
          contracts according to their maturity date:
 
 Notional
                    Amount$2006
                
                
                16,175,3912007
                
                
                111,341,3432009
                
                
                42,367,1082011
                
                
                127,812,4622012
                
                
                153,795,9052015
                
                
                71,208,491
 
 **9.**
                **Reconciliation
                    of Canadian and United States
                    GAAP**
  The
          financial statements of the Company are prepared in accordance with Canadian
          GAAP. The principal differences resulting from the application of U.S.GAAP
          on
          net income are presented below.
 
 Starting
          January 1, 2004, under Canadian GAAP, derivative financial instruments
          that do
          not qualify for hedge accounting are carried at fair value on the balance
          sheet
          with changes in fair value recorded in earnings. Any resulting transitional
          gain
          (loss) is deferred and recognized in earnings at the same time as revenues
          related to the hedged item. According to U.S.GAAP,
 
 F-8
 
 **NB
                FINANCE, LTD.**
 **Notes
                to the financial statements**
 **years
                ended December 31, 2005 and 2004**
 **(in
                U.S. dollars)**
 9.
                **Reconciliation
                    of Canadian and United States GAAP**
                  **(Continued)**
  derivative
          financial instruments that do not qualify for hedge accounting are carried
          at
          fair value on the balance sheet with changes in fair value recorded in
          earnings.
          The following table reconciles net income (loss) according to Canadian
          GAAP with
          net income (loss) according to U.S. GAAP.
  **2005**
                
                **2004**
                
                **2003****$**
                
                **$**
                
                **$****Net
                    income (loss) per Canadian GAAP**
                
                
                **4,010,926**
                
                
                **(7,937,023**
                **)**
                
                **6,915,778**Amortization
                    of transitional gain
                
                
                (634,185
                )
                
                (791,840
                )
                
                -Changes
                    in fair value on derivative financialinstruments
                
                
                -
                
                
                -
                
                
                (10,776,281
                )**Net
                    income (loss) per U.S. GAAP**
                
                
                **3,376,741**
                
                
                **(8,728,863**
                **)**
                
                **(3,860,503**
                **)**
 
 The
          following table reconciles shareholder’s equity according to Canadian GAAP with
          shareholder’s equity according to U.S. GAAP.
 
 **2005**
                
                **2004**
                
                **2003****$**
                
                **$**
                
                **$****Shareholder’s
                    equity per Canadian GAAP**
                
                
                **154,224,046**
                
                
                **150,213,121**
                
                
                **158,150,144**Transition
                    gain on derivative financial instruments
                
                
                2,540,770
                
                
                3,174,955
                
                
                3,966,795**Shareholder’s
                    equity per U.S. GAAP**
                
                
                **156,764,816**
                
                
                **153,388,076**
                
                
                **162,116,939**
  F-9


**Legal
      Proceedings**





The
      Company is not the subject of any material litigation. The Company is not
      currently involved in nor, to the Company's knowledge, currently threatened
      with
      any material litigation other than routine litigation arising in the ordinary
      course of business, most of which is expected to be covered by liability
      insurance.





**Significant
      changes**





There
      have been no significant changes since the date of the Financial Statements
      included in this report.





ITEM
      9:
      THE OFFER AND LISTING





**Nature
      of Company’s Securities**





See " History
      and development of the Company " under
      Item 4: INFORMATION ON THE COMPANY above. No trading market exists with respect
      to the securities of the Company. All Common Shares of the Company are held
      by
      the Bank.





ITEM
      10:
      ADDITIONAL INFORMATION





**Memorandum
      of Association**





NB
      Finance's Memorandum of Association and bye-laws both became operational on
      September 3, 1997 and are previously filed on the S-4/F-9 Registration
      Statement.





**Material
      Contracts**





See
      Item
      4: INFORMATION ON THE COMPANY





14





**Exchange
      Controls and other Limitations Affecting Security Holders**





See " History
      and Development of the Company " under
      Item 4: INFORMATION ON THE COMPANY above. There are no governmental laws,
      decrees or regulations in Bermuda or Canada that restrict the export or import
      of capital or that affect the remittance of dividends, interest or other
      payments to nonresident holders of the Common Stock. Pursuant to the OSFI Order,
      the Bank will at all times continue to hold all outstanding shares of Common
      Stock. None of the Company’s Memorandum of Association, Bye-laws or Bermuda law
      limit the right of nonresident or foreign owners to hold or vote
      securities.





**Taxation**





See " History
      and Development of the Company " under
      Item 4: INFORMATION ON THE COMPANY above. United States security holders are
      not
      subject to any taxes under existing laws and regulations of Bermuda with respect
      to the Depositary Shares. No tax treaty exists between the United States and
      Bermuda.





**Documents
      on Display**





The
      Company is subject to the informational requirements of the Securities Exchange
      Act of 1934, as amended. In accordance with these requirements, we file reports
      and other information with the SEC. These materials, including this report
      and
      the exhibits thereto, may be inspected and copied at prescribed rates at the
      SEC’s public reference room at 100 F. Street, N.E., Washington, D.C. 20549. The
      SEC also maintains a web site at http://www.sec.gov that contains reports and
      other information regarding registrants that file electronically with the SEC.
      NB Finance’s annual reports and some of the other information submitted to the
      SEC may be accessed through this web site.





ITEM
      11:
      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Any
      market risk to which the Company would be exposed would result from fluctuations
      in: (a) interest rates related to Mortgage Loans and (b) currency exchange
      rates
      related to Promissory notes, each affecting the interest payments made by the
      Company in respect of the Promissory notes. Since the Promissory notes are
      significantly over collateralized by the Mortgage Loans, interest rate
      fluctuations should not present significant market risk. The Company expects
      that the interest and principal generated by the Mortgage Loans should enable
      full payment by the Company of all of its obligations as they come due. Since
      the Mortgage Loans are guaranteed by a fixed ratio of exchange predetermined
      on
      the date of purchase and applicable until the maturity of the Mortgage Loans
      pursuant to the Mortgage Loan Assignment Agreements, fluctuations in currency
      exchange rates should not present significant market risk.





ITEM
      12:
      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





Not
      Applicable.





15


**PART
      II**





ITEM
      13:
      DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





There
      have been no material defaults in the payment of principal, interest, a sinking
      or purchase fund installment or with respect to any indebtedness of the Company.
      There have been no material arrearages in the payment of dividends or any
      material delinquency with respect to the Common Stock.





ITEM
      14:
      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS





There
      have been no material modifications to any constituent instruments that define
      the rights of holders of the Common Stock. The rights evidenced by the Common
      Stock have not been materially limited or qualified.





ITEM
      15:
      CONTROLS AND PROCEDURES





Based
      on
      their evaluation of the Company’s disclosure controls and procedures as of the
      end of the period covered by this Annual Report on Form 20-F, the Company’s
      President and Chief Financial Officer have concluded that such controls and
      procedures are effective.





There
      were no changes in the Company’s internal controls over financial reporting
      identified in connection with their evaluation that occurred during the period
      covered by this annual report that have materially affected, or are reasonably
      likely to materially affect, the Company’s control over financial
      reporting.





ITEM
      16A:
      AUDIT COMMITTEE FINANCIAL EXPERT





The
      Company does not have an audit committee. The entire Board of Directors performs
      all functions ordinarily performed by an audit committee. The Board of Directors
      has reviewed the definition of “audit committee financial expert” under item 16A
      of Form 20-F and determined that each of Donna Goral and Martin Ouellet
      satisfies the criteria for an audit committee financial expert under the
      Exchange Act. The SEC has indicated that the designation of Ms. Goral and Mr.
      Ouellet as audit committee financial experts does not make such persons an
      “expert” for any purpose, impose any duties, obligations or liability on such
      persons that are greater than those imposed on members of the Board of Directors
      who do not carry this designation or affect the duties, obligations or liability
      of any other member of the Board of Directors.





ITEM
      16B:
      CODE OF ETHICS





On
      December 23, 2003, the Company adopted a Code of Conduct and Ethics (as an
      exhibit to this Form 20-F Report) (the “Code”) that applies to all of the
      Company’s directors, officers and employees (as defined in the Code). A revised
      version of the the Code was put in place effective June 15, 2006 . The
      Company undertakes to provide a copy of this Code without charge, upon request.
      Investors may send a request for a copy of the Code in writing to the Company’s
      assistant secretary at 600 rue De La Gauchetiere West, 27th floor, Montreal,
      Québec, Canada, H3B 4L2, by certified mail with a self-addressed envelope
      attached to such request.





16





ITEM
      16C:
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit
      Fees





Deloitte
      & Touche LLP’s aggregate fees billed for professional services rendered for
      the audit services for the 2005 fiscal year were $23,000 compared to $29,000
      for
      2004. The engagement of Deloitte & Touche LLP for the 2005 fiscal year and
      the scope of audit were pre-approved by our Board of Directors.





Audit-Related
      Fees





Deloitte
      & Touche LLP’s aggregate fees billed for audit-related services amount to
      $7,500 for the 2005 fiscal year (nil for the 2004 fiscal year). These
      audit-related services were pre-approved by our Board of Directors.





Tax
      Fees





There
      were no tax fees for the fiscal years 2005 or 2004.





The
      Company’s Board of Directors pre-approves the services - both permitted audit
      services and permitted non-audit services - of the external auditor before
      the
      external auditor is engaged by the Company to render such permitted audit
      services or permitted non-audit services. The Board of Directors evidences
      its
      pre-approval by resolution of the Board of Directors.





ITEM
      16D:
      EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





Not
      applicable.





ITEM
      16E:
      PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS





Not
      applicable.





ITEM
      17:
      FINANCIAL STATEMENTS





The
      Financial Statements contained herein were prepared in accordance with
      accounting principles generally accepted in Canada and are expressed in United
      States dollars. The Financial Statements are contained on pages F-1 through
      F-9
      of this Form 20-F.





ITEM
      18:
      FINANCIAL STATEMENTS





See
      Item
      17.





17





ITEM
      19:
      EXHIBITS





The
      following documents are filed as part of this report:





**Exhibit
              Number**
            **Description**





1.1
            Memorandum
                of Association of NB Finance, Ltd.*





1.2
            By-laws
                of NB Finance, Ltd.*





10.3
            Loan
                Agreement dated as of September 3, 1997 between NB Finance, Ltd.
                and NB
                Capital Corporation*





10.5
            Deed
                of Sale of Mortgage Loans dated September 3, 1997 between National
                Bank of
                Canada and NB Finance, Ltd.*





10.6
            Mortgage
                Loan Assignment Agreement dated September 3, 1997 among National
                Bank of
                Canada, NB Capital Corporation and NB Finance,
                Ltd.*





10.7
            Promissory
                Notes representing the sixteen hypothecation loans executed by NB
                Finance,
                Ltd. in favor of NB Capital
                Corporation*





10.10
            Loan
                Agreement dated as of December 4, 1998 between NB Finance, Ltd. and
                NB
                Capital Corporation*





10.12
            Deed
                of Sale of Mortgage Loans dated December 4, 1998 between National
                Bank of
                Canada and NB Finance, Ltd.*





10.13(i)
            Mortgage
                Loan Assignment Agreement dated as of December 4, 1998 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.13(ii)
            Mortgage
                Loan Assignment Agreement dated as of December 4, 1998 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.14(i)
            Promissory
                Note representing $25,836,597.23 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.14(ii)
            Promissory
                Note representing $29,880,126.51 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.15
            Mortgage
                Loan Assignment Agreement dated as of September 7, 1999 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.16
            Promissory
                Note representing $85,989,203.22 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.17
            Mortgage
                Loan Assignment Agreement dated as of April 14, 2000 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





18


10.18
            Promissory
                Note representing $98,836,341.23 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.19
            Mortgage
                Loan Assignment Agreement dated as of September 28, 2000 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.20
            Promissory
                Note representing $67,323,437.74 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.21
            Mortgage
                Loan Assignment Agreement dated as of January 30, 2001 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.22
            Promissory
                Note representing $107,179,964.89 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.23
            Mortgage
                Loan Assignment Agreement dated as of June 12, 2001 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.24
            Promissory
                Note representing $121,357,226.22 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.25
            Mortgage
                Loan Assignment Agreement dated as of September 24, 2001 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.26
            Promissory
                Note representing $55,963,732.07 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.27
            Mortgage
                Loan Assignment Agreement dated as of January 29, 2002 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.28
            Promissory
                Note representing $71,866,079.87 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.29
            Mortgage
                Loan Assignment Agreement dated as of June 20, 2002 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.30
            Promissory
                Note representing $64,221,362.98 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.31
            Mortgage
                Loan Assignment Agreement dated as of December 16, 2002 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.32
            Promissory
                Note representing $52,054,168.88 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.33
            Promissory
                Notes representing $70,420,135.45 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.34
            Mortgage
                Loan Assignment Agreement dated as of May 27, 2003 among NB Finance,
                Ltd.,
                NB Capital Corporation and National Bank of
                Canada*





19


10.35
            Promissory
                Notes representing $106,552,720.44 executed by NB Finance, Ltd. in
                favor
                of NB Capital Corporation*





10.36
            Mortgage
                Loan Assignment Agreement dated as of October 21, 2003 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.37
            Promissory
                Note representing $76,053,456.93 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.38
            Mortgage
                Loan Assignment Agreement dated as of April 28, 2004 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.39
            Promissory
                Note representing $94,559,444.49 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.40
            Mortgage
                Loan Assignment Agreement dated as of August 26, 2004 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.41
            Promissory
                Note representing $73,037,30.00 executed by NB Finance, Ltd. in favor
                of
                NB Capital Corporation(1)





10.42
            Mortgage
                Loan Assignment Agreement dated as of February 24, 2005 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of Canada(2)





10.43
            Promissory
                Note representing $97,736,747.47 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation(3)





10.44
            Mortgage
                Loan Assignment Agreement dated as of August 29, 2005 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of Canada(4)





11.1
            NB
                Finance, Ltd. Code of Conduct and Ethics
                **





12.1
            President’s
                certification pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002**





12.2
            Chief
                Financial Officer’s certification pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002**





13.1
            Written
                Statement of Chairman and President Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                1350)**





13.2
            Written
                Statement of Chief Financial Officer Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                1350)**





*
            As
                previously filed.


**
            As
                filed herewith.


(1)
            Incorporated
                herein by reference to Exhibit 10.43 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31,
                2006.


(2)
            Incorporated
                herein by reference to Exhibit 10.42 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.


(3)
            Incorporated
                herein by reference to Exhibit 10.45 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.


(4)
            Incorporated
                herein by reference to Exhibit 10.44 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.





20




**SIGNATURES**





The
      Registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorized the undersigned to sign
      this annual report on its behalf.




NB FINANCE, LTD.By:
            /s/
              Martin
              OuelletName:
              Martin OuelletTitle:
              President  Dated:
      June 16, 2006


21


**EXHIBIT
      INDEX**


**Exhibit
                Number**
              **Description**
 
 1.1
              Memorandum
                  of Association of NB Finance, Ltd.*
 
 1.2
              By-laws
                  of NB Finance, Ltd.*
 
 10.3
              Loan
                  Agreement dated as of September 3, 1997 between NB Finance, Ltd.
                  and NB
                  Capital Corporation*





10.5
            Deed
                of Sale of Mortgage Loans dated September 3, 1997 between National
                Bank of
                Canada and NB Finance, Ltd.*





10.6
            Mortgage
                Loan Assignment Agreement dated September 3, 1997 among National
                Bank of
                Canada, NB Capital Corporation and NB Finance,
                Ltd.*





10.7
            Promissory
                Notes representing the sixteen hypothecation loans executed by NB
                Finance,
                Ltd. in favor of NB Capital
                Corporation*





10.10
            Loan
                Agreement dated as of December 4, 1998 between NB Finance, Ltd. and
                NB
                Capital Corporation*





10.12
            Deed
                of Sale of Mortgage Loans dated December 4, 1998 between National
                Bank of
                Canada and NB Finance, Ltd.*





10.13(i)
            Mortgage
                Loan Assignment Agreement dated as of December 4, 1998 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.13(ii)
            Mortgage
                Loan Assignment Agreement dated as of December 4, 1998 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.14(i)
            Promissory
                Note representing $25,836,597.23 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.14(ii)
            Promissory
                Note representing $29,880,126.51 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.15
            Mortgage
                Loan Assignment Agreement dated as of September 7, 1999 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.16
            Promissory
                Note representing $85,989,203.22 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.17
            Mortgage
                Loan Assignment Agreement dated as of April 14, 2000 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.18
            Promissory
                Note representing $98,836,341.23 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.19
            Mortgage
                Loan Assignment Agreement dated as of September 28, 2000 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





22


10.20
            Promissory
                Note representing $67,323,437.74 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.21
            Mortgage
                Loan Assignment Agreement dated as of January 30, 2001 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.22
            Promissory
                Note representing $107,179,964.89 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.23
            Mortgage
                Loan Assignment Agreement dated as of June 12, 2001 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.24
            Promissory
                Note representing $121,357,226.22 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.25
            Mortgage
                Loan Assignment Agreement dated as of September 24, 2001 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.26
            Promissory
                Note representing $55,963,732.07 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.27
            Mortgage
                Loan Assignment Agreement dated as of January 29, 2002 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.28
            Promissory
                Note representing $71,866,079.87 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.29
            Mortgage
                Loan Assignment Agreement dated as of June 20, 2002 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.30
            Promissory
                Note representing $64,221,362.98 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.31
            Mortgage
                Loan Assignment Agreement dated as of December 16, 2002 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.32
            Promissory
                Note representing $52,054,168.88 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.33
            Promissory
                Notes representing $70,420,135.45 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.34
            Mortgage
                Loan Assignment Agreement dated as of May 27, 2003 among NB Finance,
                Ltd.,
                NB Capital Corporation and National Bank of
                Canada*





10.35
            Promissory
                Notes representing $106,552,720.44 executed by NB Finance, Ltd. in
                favor
                of NB Capital Corporation*





10.36
            Mortgage
                Loan Assignment Agreement dated as of October 21, 2003 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





23


10.37
            Promissory
                Note representing $76,053,456.93 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.38
            Mortgage
                Loan Assignment Agreement dated as of April 28, 2004 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.39
            Promissory
                Note representing $94,559,444.49 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation*





10.40
            Mortgage
                Loan Assignment Agreement dated as of August 26, 2004 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of
                Canada*





10.41
            Promissory
                Note representing $73,037,30.00 executed by NB Finance, Ltd. in favor
                of
                NB Capital Corporation(1)





10.42
            Mortgage
                Loan Assignment Agreement dated as of February 24, 2005 among NB
                Finance,
                Ltd., NB Capital Corporation and National Bank of Canada(2)





10.43
            Promissory
                Note representing $97,736,747.47 executed by NB Finance, Ltd. in
                favor of
                NB Capital Corporation(3)





10.44
            Mortgage
                Loan Assignment Agreement dated as of August 29, 2005 among NB Finance,
                Ltd., NB Capital Corporation and National Bank of Canada(4)





11.1
            NB
                Finance, Ltd. Code of Conduct and Ethics
                **





12.1
            President’s
                certification pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002**





12.2
            Chief
                Financial Officer’s certification pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002**





13.1
            Written
                Statement of Chairman and President Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                1350)**





13.2
            Written
                Statement of Chief Financial Officer Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
                1350)**





*
            As
                previously filed.


**
            As
                filed herewith.


(1)
            Incorporated
                herein by reference to Exhibit 10.43 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31,
                2006.


(2)
            Incorporated
                herein by reference to Exhibit 10.42 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.


(3)
            Incorporated
                herein by reference to Exhibit 10.45 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.


(4)
            Incorporated
                herein by reference to Exhibit 10.44 to Form 10-K filed with the
                SEC by NB
                Capital Corporation on March 31, 2006.






24