UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549

                                    FORM 20-F

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

[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, 2003

[_]  Transition  Report  pursuant  to Section  13 or 15(d) or of the  Securities
     Exchange  Act of 1934 for the  transition  period from  _______________  to
     ---------------.


                        Commission file number 333-49153.


                                NB FINANCE, LTD.
             (Exact name of Registrant as specified in its charter)


                                NB FINANCE, LTD.
                 (Translation of Registrant's name into English)


                                     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 [_]

Indicate by check mark which financial statement item the registrant has elected
to follow: Item 17 [X]       Item 18 [_]





<PAGE>


     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 Form 20-F report
for filling  with the U.S  Securities  and  Exchange  Commission,  in reports to
shareholders, in press releases and in other communications. All such statements
are made pursuant to the "safe harbor"  provisions of 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.

     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  rely  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.




                                      -2-
<PAGE>


                                     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


<TABLE>
                                         Year Ended       Year Ended       Year Ended        Year Ended       Year Ended
                                        December 31,     December 31,     December 31,      December 31,     December 31,
                                            2003             2002             2001              2000             1999
<S>                                     <C>              <C>              <C>               <C>               <C>
Statement of Income Data:
Operating revenues..............        $44,484,134      $43,385,203      $41,962,693       $36,372,519       $36,578,735

                                         $6,915,778       $6,117,624       $5,136,962        $4,719,511        $1,596,416
Income from Continuing Operations
                                         $6,915,778       $6,117,624       $5,136,962        $4,719,511        $1,596,416
Net income......................

Income from Continuing Operations           $576.32          $509.80          $428.08           $393.29           $133.03
per Common Share................

Balance Sheet Data:
                                       $700,113,693     $635,586,789     $579,818,559      $530,118,904      $561,215,191
Total assets....................
                                       $541,963,549     $484,352,423     $434,701,817      $390,139,124      $425,954,922
Total liabilities...............
                                       $158,150,144     $151,234,366     $145,116,742      $139,979,780      $135,260,269
Shareholder's Equity............            $12,000          $12,000          $12,000           $12,000           $12,000
Capital Stock...................             12,000           12,000           12,000            12,000            12,000
Number of Shares................
Cash Dividends Declared per Common              N/A              N/A              N/A               N/A               N/A
Share...........................
</TABLE>




                                      -3-

<PAGE>

Exchange Rate

     References  to $ are to  United  States  dollars;  references  to C$ are to
Canadian dollars. As of December 31, 2003, the Canadian dollar exchange rate was
C$1.2965 = $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.



         High     Low

         July 2003                      1.4163   1.3354
         August 2003                    1.4072   1.3795
         September 2003                 1.3918   1.3470
         October 2003                   1.3451   1.3040
         November 2003                  1.3385   1.2991
         December 2003                  1.3373   1.2943


         Year Average

         December 1998                  1.48310319
         December 1999                  1.48584024
         December 2000                  1.48520240
         December 2001                  1.54841633
         December 2002                  1.57035976
         December 2003                  1.40146175


Risk Factors

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

ITEM 4: INFORMATION ON THE COMPANY

Background

     NB Finance,  Ltd. 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.

General

     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").  The  Promissory  notes
currently consist of sixty-one  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



                                      -4-
<PAGE>


therefor.  The Mortgage  Loans  consist of  sixty-one  pools of, at December 31,
2003, an aggregate of 15,246 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.

     As of December  31,  2003,  the Company has issued  Promissory  notes to NB
Capital in the aggregate  principal  amount of approximately  $448 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$822 million ($634  million).  Accordingly,  as of
December 31, 2003, the Promissory notes were overcollateralized by $186 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  10.3 to 10.36)  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,  dated  September  3, 1997,  between  the  Company  and the Bank (the
"Servicing Agreement"), the Mortgage Loans are serviced by the Bank. Pursuant to
the  Assignment of Servicing  Agreement,  dated  September 3, 1997,  between the
Company,  NB Capital and the Bank, the Company has assigned to NB Capital all of
its right, title and interest in the Servicing Agreement.

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



                                      -5-
<PAGE>

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  at  origination  or  through  the CMHC
portfolio insurance program,  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  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



                                      -6-
<PAGE>


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 three  years  following  the most  recent  interest
adjustment date, such penalties are a resultant of a yield  maintenance  clause.
After three 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-one  hypothecation loans. As of December 31, 2003, the principal amount of
the  Promissory  notes was  approximately  $448  million.  Each of the sixty-one
hypothecation  loans  comprising the  Promissory  notes issued by the Company is
secured by a pool of Mortgage Loans. As of December 31, 2003,  there were 15,246
Mortgage  Loans in an aggregate  amount of  approximately  C$822  million  ($634
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,  2003,   approximately  $186  million.  NB  Capital  acquired  the
Promissory  notes  issued by the Company  pursuant to the terms of certain  loan
agreements.

     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 notes 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,  2004
to December, 2012. The Promissory notes pay interest at rates ranging from 5.49%
to 10.21%, with an average rate of approximately 8.31% 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.



                                      -7-
<PAGE>

     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 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.


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

     Income from  continuing  operations  for the year ended  December  31, 2003
increased  by  $798,154 or 13.05%  over the year ended  December  31, 2002 which
increased  by $980,662 or 19.09% over the prior year ended  December  31,  2001.
Operating revenues for the year ended December 31, 2003, the year ended December
31, 2002 and the year ended December 31, 2001 were $44,484,134,  $43,385,203 and
$41,962,693, respectively.

     Ninety-four  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-one pools of CMHC-insured  residential first mortgages and
which are  secured  by real  property  located  in  Canada.  The  balance of the
revenues resulted from cash and cash equivalent assets.

     Expenses for the year ended  December 31, 2003, the year ended December 31,
2002 and the year ended December 31, 2001 totaled  $37,568,356,  $37,267,579 and
$36,825,731,  respectively,  of which $37,529,935,  $37,246,933 and $36,806,319,
respectively, represent interest on Promissory notes.

     During the year ended  December 31, 2003, no dividend was authorized on the
Company's Common Stock.

Liquidity and Capital Resources

     The Company's  revenues are 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,  2004 to
December,  2012) 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.



                                      -8-
<PAGE>


     As of December 31, 2003,  approximately  $448 million of  Promissory  notes
issued by the Company were overcollateralized by the approximately C$822 million
($634  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 Securities and Exchange Commission 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, Ltd.

Off-Balance Sheet Arrangements

     Note 8 to the financial  statements included in this form 20-F on pages F-1
through F-8 discuss the Company's off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

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

<TABLE>
                                       Payments due by period
     -------------------------------------------------------------------------------------------
                                             Less                                      More
                                             than 1         1-3            3-5         than 5
                               Total         years         years          years        years
     <S>                    <C>           <C>           <C>            <C>          <C>
     Promissory notes       448,333,456   87,511,017    221,375,150    48,012,125   91,435,164
     -------------------------------------------------------------------------------------------
</TABLE>



                                      -9-

<PAGE>


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,  four officers and no
employees. The Company does not anticipate that it will require any employees.

     The  following  persons are the directors of the Company to serve until the
next general annual meeting:

     Name                   Age     Position and Offices Held    Director Since
     ----                   ---    --------------------------    -------------
     Donna Goral.......     46     Director, Vice-President      May 2001
     Martin Ouellet....     50     Director, President           November 1997
     Monique Baillergeau    45     Director                      May 2003
     Serge Lacroix.....     46     Director                      July 2002


     The only other  executive  officer of the Company is Jean  Dagenais  (Chief
Financial  Officer).  Joan L.K. Barnes  (Secretary),  Michael Ashford (Assistant
Secretary), Sophie Clermont (Assistant Secretary) and Vanessa Fontana (Assistant
Secretary) are officers of the Company.

     Donna  Goral is a  director  of NB  Capital  Corporation  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 Public  Accountants,  the
New York State Society of CPAs and the Institute of International Bankers.

     Serge  Lacroix has been  Chairman of the Board and  President of NB Capital
Corporation since July 2002 and director of NB Finance, Ltd. since July 2002. He
has been  with the Bank  since  1998 in  various  positions,  most  recently  as
Managing  Director and Senior  Vice-President  of the New York Branch.  Prior to
that, he was General Manager, President and CEO of NBC Financial (UK) Ltd. Prior
to that, he was Senior  Vice-President  at National Bank Financial  between 1993
and 1998. He held various  positions at Wood Gundy in London  England,  Montreal
and  Vancouver  from 1982 to 1993.  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.

     Monique Baillergeau was appointed Director of NB Capital Corporation and NB
Finance,  Ltd. in May 2003.  She has been with the Bank's New York branch  since
February  1986. In 1998, she was assigned to manage the Operations of the London
England  Branch for 5 years.  She  accepted  the  position of Vice  President in
charge of Operations and Administration in New York in May of 2003.

     Jean Dagenais joined the Bank in 1990 as Manager and Chief  Accountant.  In
1997,  he was  promoted to  vice-president  and chief  accountant.  He began his
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.

     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,



                                      -10-
<PAGE>


responsible   for  Asset  and  Liability   Management,   funding  and  liquidity
management. He is a Director and the President of NB Finance, Ltd.

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 Joan L.K.  Barnes.  The Company did not pay any form of compensation
to its  officers  or  directors  for the  year  ended  December  31,  2003.  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,  2003 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  "Background"  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 United States  Securities
and  Exchange  Commission.  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 May 27, 2003 and October 21, 2003,  the Company  acquired from the Bank,
its direct  parent,  thirteen pools of Mortgage Loans pursuant to thirteen Deeds
of Sale of Mortgage Loans,  dated May 27, 2003 and October 21, 2003, between the
Bank and the Company. During the fiscal year ended December 31, 2003, 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.

     On January  29,  2002,  June 20,  2002 and  December  16,  2002 the Company
acquired  from the Bank,  its direct  parent,  twenty  pools of  Mortgage  Loans
pursuant to twenty Deeds of Sale of Mortgage Loans, dated January 29, 2002, June
20, 2002 and  December  16, 2002  between the Bank and the  Company.  During the
fiscal year ended December 31, 2002,  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.



                                      -11-
<PAGE>


     On January  30,  2001,  June 12,  2001 and  September  6, 2001 the  Company
acquired from the Bank,  its direct parent,  twenty-two  pools of Mortgage Loans
pursuant to twenty Deeds of Sale of Mortgage  Loans,  January 30, 2001, June 12,
2001 and September 24, 2001 between the Bank and the Company.  During the fiscal
year  ended  December  31,  2002,  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.


ITEM 8:  FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

     See page F-1 to F-8 hereto.

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 "Background" 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

Exchange Controls and other Limitations Affecting Security Holders

     See "Background"  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  "Background"  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.



                                      -12-
<PAGE>


Share Capital

     See "other financial information" contained in Item 8.


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  overcollateralized 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.


                                     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  as of the end of the  period  covered  by this
report, the Company's  President and Chief Financial Officer have concluded that
the Company's  disclosure controls and procedures (as defined in Rules 13a-15(e)
and  15d-15(e)  under the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange  Act")),  are  effective  to ensure  that  information  required to be
disclosed by the Company in reports that it files or submits  under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in the Securities and Exchange Commission's rules and forms.



                                      -13-

<PAGE>


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,  Monique
Baillergau, Serge Lacroix and Martin Ouellet satisfies the criteria for an audit
committee  financial  expert  under the  Securities  Exchange  Act of 1934.  The
Commission has indicated that the designation of Ms. Goral, Ms. Baillergau,  Mr.
Lacroix 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
(which is an  exhibit  to this  Form 20-F  Report)  that  applies  to all of the
Company's  directors,  officers and employees (as defined in the Code of Conduct
and Ethics).  No amendments to the provisions of the Code have been made nor any
waivers have been granted by the Company since its adoption.


ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

     Deloitte & Touche LLP's  aggregate  fees billed for  professional  services
rendered for the audit of our annual  financial  statements  for the 2003 fiscal
year were  C$24,000  ($15,000)  compared to  C$24,000  ($17,877)  for 2002.  The
engagement  of  Deloitte & Touche LLP for the 2003  fiscal year and the scope of
audit were pre-approved by our board of directors.


Audit-Related Fees

     There were no audit-related fees for the fiscal years 2003 or 2002.

Tax Fees

     There were no tax fees for the fiscal years 2003 or 2002.

     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.





                                      -14-

<PAGE>


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.  There are no material  differences  between Canadian and United
States generally accepted accounting  principles.  The Financial  Statements are
contained on pages F-1 through F-8 of this Form 20-F.






                                      -15-
<PAGE>


NB FINANCE, LTD.
Table of contents
--------------------------------------------------------------------------------



Independent Auditors' report..................................................


Statements 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-8





<PAGE>



                                                        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



Independent Auditors' report


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, 2003 and 2002 and the related  statements  of income and  retained
earnings  and cash  flows for the each of the three  years in the  period  ended
December 31, 2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform  the  audit  to  obtain  reasonable   assurance  whether  the  financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes 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,  such  financial  statements  present  fairly,  in all material
respects, the financial position of the Company as of December 31, 2003 and 2002
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2003 in conformity with  accounting  principles
generally accepted in Canada.





/s/ Deloitte & Touche LLP
Montreal, Canada

April 23, 2004



<PAGE>


<TABLE>
NB FINANCE, LTD.
Statements of income and retained earnings
years ended December 31, 2003, 2002 and 2001
(in U.S. dollars)
-------------------------------------------------------------------------------------------------------------------
                                                                2003                 2002               2001
-------------------------------------------------------------------------------------------------------------------
                                                                  $                    $                  $
<S>                                                           <C>                 <C>              <C>
Revenue
    Interest - mortgage loans                                 41,734,223          39,693,779         38,092,270
    Amortization of the premium paid or the
        discount received on mortgage loans                    2,349,020           3,077,260          2,452,926
    Interest - bank                                              400,891             614,164          1,417,497
-------------------------------------------------------------------------------------------------------------------
                                                              44,484,134          43,385,203         41,962,693
-------------------------------------------------------------------------------------------------------------------
Expenses
    Interest - promissory notes                               37,529,935          37,246,933         36,806,319
    Professional fees                                             36,536              20,526             19,123
    Other                                                          1,885                 120                289
-------------------------------------------------------------------------------------------------------------------
                                                              37,568,356          37,267,579         36,825,731
-------------------------------------------------------------------------------------------------------------------
Net income                                                     6,915,778           6,117,624          5,136,962

Retained earnings, beginning of year                          18,886,808          12,769,184          7,632,222
-------------------------------------------------------------------------------------------------------------------
Retained earnings, end of year                                25,802,586          18,886,808         12,769,184
-------------------------------------------------------------------------------------------------------------------
</TABLE>




                                       F-1

<PAGE>

<TABLE>
NB FINANCE, LTD.
Balance sheets
as at December 31, 2003 and 2002
(in U.S. dollars)
-------------------------------------------------------------------------------------------------------------------
                                                                            2003                        2002
-------------------------------------------------------------------------------------------------------------------
                                                                              $                           $
<S>                                                                       <C>                         <C>
Assets
  Cash and cash equivalents                                               59,728,787                  42,944,854
Mortgage loans (Note 3)                                                  633,914,616                 570,106,894
  Premium paid on mortgage loans (Note 4)                                  3,589,916                   1,325,143
  Interest receivable                                                      2,349,090                   2,178,677
  Assets related to derivative financial instruments                         531,284                  19,031,221
-------------------------------------------------------------------------------------------------------------------
                                                                         700,113,693                 635,586,789
-------------------------------------------------------------------------------------------------------------------

Liabilities
  Promissory notes (Note 5)                                              448,333,456                 469,846,279
  Due to an affiliated company (Note 6)                                   11,111,916                   6,977,307
  Due to the parent company                                                3,117,446                           -
  Discount received on mortgage loans (Note 4)                             3,602,692                   5,632,825
  Liabilities related to derivative financial instruments                 75,776,485                   1,883,617
  Accounts payable                                                            21,554                      12,395
-------------------------------------------------------------------------------------------------------------------
                                                                         541,963,549                 484,352,423
-------------------------------------------------------------------------------------------------------------------
Shareholder's equity
  Capital stock (Note 7)                                                      12,000                      12,000
  Contributed surplus                                                    132,335,558                 132,335,558
  Retained earnings                                                       25,802,586                  18,886,808
-------------------------------------------------------------------------------------------------------------------
                                                                         158,150,144                 151,234,366
-------------------------------------------------------------------------------------------------------------------
                                                                         700,113,693                  635,586,789
-------------------------------------------------------------------------------------------------------------------
</TABLE>



                                      F-2

<PAGE>

<TABLE>
NB FINANCE, LTD.
Statements of cash flows
years ended December 31, 2003, 2002 and 2001
(in U.S. dollars)
-------------------------------------------------------------------------------------------------------------------
                                                                  2003               2002                2001
-------------------------------------------------------------------------------------------------------------------
                                                                    $                  $                  $

<S>                                                             <C>                 <C>                <C>
Cash flows from operating activities
   Net income                                                   6,915,777           6,117,624          5,136,962
   Item not affecting cash resources
      Amortization of the premium paid or the
           discount received on mortgage loans                 (2,349,020)         (3,077,260)        (2,452,926)

   Changes in non-cash operating working capital items
      Financial derivative assets and liabilities               2,125,573            (140,009)                 -
     Interest receivable                                         (170,413)           (209,161)           300,546
      Due to an affiliated company                              4,134,609          (5,154,888)         6,846,716
      Accounts payable                                              9,159                  80             (2,524)
         Due to a parent company                                3,117,446                   -                  -
-------------------------------------------------------------------------------------------------------------------
                                                               13,783,131          (2,463,614)         9,828,774
-------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities
    Issue of promissory notes                                 176,972,855         188,141,611        284,500,923
    Reimbursements of promissory notes                       (198,485,678)       (134,178,298)      (248,161,027)
-------------------------------------------------------------------------------------------------------------------
                                                              (21,512,823)         53,963,313         36,339,896
-------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities
    Increase in mortgage loans                               (221,216,070)       (235,177,014)      (355,626,154)
    Repayments of mortgage loans                              248,107,099         167,722,873        310,201,293
    Discount (Premium) on mortgage loans                       (2,377,404)            942,476          4,034,286
-------------------------------------------------------------------------------------------------------------------
                                                               24,513,625         (66,511,665)       (41,390,575)
-------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                       16,783,933        (15,011,966)         4,778,095

Cash and cash equivalents, beginning of year                     42,944,854        57,956,820         53,178,725
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                           59,728,787        42,944,854         57,956,820
-------------------------------------------------------------------------------------------------------------------
Additional cash flow information
    Interest paid                                                37,755,484        36,788,492         36,510,568


Cash and cash equivalents comprise cash on hand and temporary investments.
</TABLE>



                                      F-3
<PAGE>

NB FINANCE, LTD.
Notes to the financial statements
years ended December 31, 2003 and 2002
(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.   Summary of significant accounting policies Financial statements

     The  financial  statements  are  prepared  in  accordance  with  accounting
     principles generally accepted 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 used cross  currency swaps to manage the currency risk exposure
     of the mortgage loans.  The gains and losses  resulting from the changes in
     valuation of these  instruments  as well as the gains and losses  resulting
     from the changes in  valuation  of the hedged  assets are  reflected 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

<PAGE>

NB FINANCE, LTD.
Notes to the financial statements
years ended December 31, 2003 and 2002
(in U.S. dollars)
--------------------------------------------------------------------------------


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  2004 to
     December   2012.   These  loans  bear   interest  at  rates   ranging  from
     approximately  5.65% to 8.38%  with a  weighted  average  rate of 7.14% per
     annum.

     Cross currency swaps with the parent company  convert the Canadian  dollars
     exposure of the mortgage  loans to U.S.  dollars.  The  maturity  dates and
     notional  amounts of the cross currency swaps agree with the maturity dates
     and principal amounts of the mortgage loans.

<TABLE>
                                                                  2003                  2002
                                                           ----------------------------------------
                                                                    $                     $
        <S>                                                  <C>                    <C>
        Mortgage loans, beginning of year                      570,106,894            492,440,883
        Acquisitions                                           221,216,070            235,177,014
        Principal repayments                                  (248,107,099)          (167,722,873)
        Foreign exchange difference                             90,698,751             10,211,870
        -------------------------------------------------------------------------------------------
        Mortgage loans, end of year                            633,914,616            570,106,894
        -------------------------------------------------------------------------------------------
</TABLE>

     The scheduled principal repayments are as follows:

                                 $
                  2004           126,540,195
                  2005           101,346,035
                  2006           194,469,187
                  2007            14,295,670
                  2008            32,585,157
                  2009            37,500,179
                  2010            45,766,273
                  2011            30,258,747
                  2012            51,153,007

     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.


                                      F-5


<PAGE>


NB FINANCE, LTD.
Notes to the financial statements
years ended December 31, 2003 and 2002
(in U.S. dollars)
--------------------------------------------------------------------------------


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
     $2,349,020 in 2003 ($3,077,260 in 2002 and $2,452,926 in 2001).

5.   Promissory notes

     The promissory notes are issued to NB Capital  Corporation,  a wholly-owned
     subsidiary of the parent company.

<TABLE>
                                                                        2003          2002
                                                                    ----------------------------
                                                                          $             $
        <S>                                                        <C>            <C>
        Promissory notes, interest rate ranging between 5.49%
           and 10.21%, repayable by monthly variable
           instalments until December 2012                           448,333,456    469,846,279
        ----------------------------------------------------------------------------------------
</TABLE>

     The scheduled principal repayments for the next nine years are as follows:

                                $
                  2004         87,511,017
                  2005         70,219,702
                  2006        141,228,851
                  2007          9,926,597
                  2008         22,050,106
                  2009         25,962,019
                  2010         34,474,357
                  2011         22,905,432
                  2012         34,055,375


6.   Transactions with an affiliated company

     During the year,  the  Company  incurred  interest  expenses  to NB Capital
     Corporation  in  an  amount  of  $37,529,935   ($37,246,933   in  2002  and
     $36,806,319 in 2001).

     The amount due to an  affiliated  company as at December  31, 2003 and 2002
     represents  interest and  principal  reimbursements  due on the  promissory
     notes to NB Capital Corporation.




                                      F-6
<PAGE>


NB FINANCE, LTD.
Notes to the financial statements
years ended December 31, 2003 and 2002
(in U.S. dollars)
--------------------------------------------------------------------------------


7.   Capital stock

     Authorized
          12,000 common shares, $1 par value

                                                      2003          2002
                                                  ---------------------------
                                                        $             $
     Issued and fully paid
          12,000 common shares                       12,000         12,000
     ------------------------------------------------------------------------


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.

        ------------------------------------------------------------------------
                                             Carrying Value         Fair Value
        ------------------------------------------------------------------------

                                                  $                    $
        Assets
        Mortgages                             633,914,616           648,946,000
        Liabilities
        Prommisory Notes                      448,333,456           478,098,583
        Financial Instruments
        Currency Swaps                        569,813,229           573,780,023
        ------------------------------------------------------------------------


     The  following  table  presents  the notional  amount of the currency  swap
     contracts according to their maturity date

        ---------------------------------------------
         Maturity Date                Carrying Value
        ---------------------------------------------
                                                 $
             2004                         5,240,033
             2005                        32,698,017
             2006                       162,918,753
             2009                       104,533,474
             2011                       130,466,137
             2012                       133,956,815
            Total                       569,813,229
        ---------------------------------------------




                                      F-7
<PAGE>

NB FINANCE, LTD.
Notes to the financial statements
years ended December 31, 2003 and 2002
(in U.S. dollars)
--------------------------------------------------------------------------------


9.   Reconciliation of Canadian and United States generally accepted  accounting
     principles

     The financial  statements  of the Company are prepared in  accordance  with
     accounting  principles  generally accepted in Canada. There are no material
     differences between accounting  principles generally accepted in Canada and
     those generally accepted in the United States of America.

     Under  Canadian GAAP,  unrealized  gains and losses on cross currency swaps
     contracts are included in earnings when the revenue is recognized. With the
     adoption of SFAS 133 and 138, the Company has not  designated the contracts
     as hedging instruments for U.S. GAAP reporting purposes. Accordingly, these
     contracts  are marked to market and resulting  unrealized  gains and losses
     are recorded to earnings.

                                                        2003
                                                        ----
                                                          $

        Net income per Canadian GAAP                 6,915,778
          Losses on derivative activities          (10,776,281)
                                                 -----------------
        Net loss per U.S. GAAP                      (3,860,503)






                                      F-8
<PAGE>


ITEM 19: EXHIBITS

     The following documents are filed as part of this report:

      Exhibit
      Number        Description
      ------        -----------
       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  December4,  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*




                                      -16-
<PAGE>

      Exhibit
      Number        Description
      ------        -----------
       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*

       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**




                                      -17-
<PAGE>

      Exhibit
      Number        Description
      ------        -----------

      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**

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

      99.2          President's  certification  pursuant  to Section  302 of the
                    Sarbanes-Oxley Act of 2002**

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

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

      99.5          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.





                                      -18-
<PAGE>



                                   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 Ouellet
                                            ------------------------------
                                            Name: Martin Ouellet
                                            Title:   President


Dated: June 29, 2004





                                      -19-