<PAGE>
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                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 20-F
                                ---------------

/ /  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES
    EXCHANGE ACT OF 1934 or

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                For the fiscal year ended December 31, 1999, or

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

          For the transition period from ____________ to ____________
                          Commission File No.: 1-4192

                                MFC BANCORP LTD.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                            YUKON TERRITORY, CANADA
                (JURISDICTION OF INCORPORATION OR ORGANIZATION)

                 6 RUE CHARLES-BONNET, 1206 GENEVA, SWITZERLAND
                                (41 22) 818-2999
                    (ADDRESS AND TELEPHONE NUMBER OF OFFICE)

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:

                            ------------------------

                        COMMON SHARES WITHOUT PAR VALUE
                                (TITLE OF CLASS)
                         ------------------------------

 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 issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

                   12,041,156 COMMON SHARES WITHOUT PAR VALUE

    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) has 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 / /  Item 18  /X/

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<PAGE>
FORWARD-LOOKING STATEMENTS

    The statements in this annual report that are not based on historical facts
are called "forward-looking statements" within the meaning of the UNITED STATES
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. These statements appear in a
number of different places in this annual report and can be identified by words
such as "estimates", "projects", "expects", "intends", "believes", "plans", or
their negatives or other comparable words. Also look for discussions of strategy
that involve risks and uncertainties. Forward-looking statements include
statements regarding the outlook for our future operations, forecasts of future
costs and expenditures, evaluation of market conditions, the outcome of legal
proceedings, the adequacy of reserves, or other business plans. You are
cautioned that any such forward-looking statements are not guarantees and may
involve risks and uncertainties. Our actual results may differ materially from
those in the forward-looking statements due to risks facing us or due to actual
facts differing from the assumptions underlying our predictions. Some of these
risks and assumptions include:

    - general economic and business conditions, including changes in interest
      rates;

    - prices and other economic conditions;

    - natural phenomena;

    - actions by government authorities, including changes in government
      regulation;

    - uncertainties associated with legal proceedings;

    - technological development;

    - future decisions by management in response to changing conditions;

    - our ability to execute prospective business plans; and

    - misjudgments in the course of preparing forward-looking statements.

    We advise you that these cautionary remarks expressly qualify in their
entirety all forward-looking statements attributable to us or persons acting on
our behalf.

    In this Form 20-F annual report, unless otherwise specified, all monetary
amounts are expressed in Canadian dollars. The following table sets out the
exchange rates, based on the noon buying rates in New York City for cable
transfers in foreign currencies, as certified for customs purposes by the
Federal Reserve Bank of New York, for the conversion of Canadian dollars into
United States dollars in effect at the end of the following periods, and the
average exchange rates (based on the average of the exchange rates on the last
day of each month in such periods) and the range of high and low exchange rates
for such periods.

<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                           ----------------------------------------------------
                                                             1999       1998       1997       1996       1995
                                                           --------   --------   --------   --------   --------
<S>                                                        <C>        <C>        <C>        <C>        <C>
End of period............................................   0.6925     0.6504     0.6999     0.7301     0.7323
High for period..........................................   0.6925     0.7105     0.7487     0.7513     0.7527
Low for the period.......................................   0.6535     0.6341     0.6945     0.7235     0.7023
Average for the period...................................   0.6744     0.6714     0.7221     0.7332     0.7286
</TABLE>

    The information set forth in this Form 20-F annual report is as at
December 31, 1999 unless an earlier or later date is indicated. On April 25,
2000, the noon rate of exchange, as reported by the Federal Reserve
Bank of New York, for the conversion of Canadian dollars into United States
dollars was U.S.$0.6803 per Canadian dollar.

                                       2
<PAGE>
                                MFC BANCORP LTD.
                                   FORM 20-F
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE NO.
                                                                        --------
<S>       <C>                                                           <C>
                                     PART I
ITEM 1.   DESCRIPTION OF BUSINESS.....................................      4
          The Company.................................................      4
          General.....................................................      4
          Business of MFC.............................................      4
ITEM 2.   DESCRIPTION OF PROPERTIES...................................      7
ITEM 3.   LEGAL PROCEEDINGS...........................................      9
ITEM 4.   CONTROL OF REGISTRANT.......................................      9
ITEM 5.   NATURE OF TRADING MARKET....................................      9
          Market Information..........................................      9
          Shareholder Distribution....................................      9
          Dividend Information........................................     10
ITEM 6.   EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING
          SECURITY HOLDERS............................................     10
ITEM 7.   TAXATION....................................................     11
          Certain Canadian Federal Income Tax Consequences............     11
          Certain United States Federal Income Tax Consequences.......     11
ITEM 8.   SELECTED FINANCIAL DATA.....................................     13
ITEM 9.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS...................................     14
          Results of Operations.......................................     14
          Liquidity and Capital Resources.............................     16
          Foreign Currency............................................     17
          European Economic and Monetary Union........................     17
          Derivative Instruments......................................     17
          Year 2000...................................................     18
          Inflation...................................................     18
ITEM 9A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK........................................................     18
ITEM 10.  DIRECTORS AND OFFICERS OF REGISTRANT........................     20
ITEM 11.  COMPENSATION OF DIRECTORS AND OFFICERS......................     21
          Executive Compensation......................................     21
          Employment Agreements and Termination of Employment or
          Change of Control...........................................     21
ITEM 12.  OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT
          OR SUBSIDIARIES.............................................     22
ITEM 13.  INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS..............     22

                                    PART II
ITEM 14.  DESCRIPTION OF SECURITIES TO BE REGISTERED..................     23

                                    PART III
ITEM 15.  DEFAULTS UPON SENIOR SECURITIES.............................     23
ITEM 16.  CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR
          REGISTERED SECURITIES.......................................     23

                                    PART IV
ITEM 17.  FINANCIAL STATEMENTS........................................     23
ITEM 18.  FINANCIAL STATEMENTS........................................     23
ITEM 19.  FINANCIAL STATEMENTS AND EXHIBITS...........................     23
          SIGNATURES..................................................     51
</TABLE>

                                       3
<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

    IN THIS DOCUMENT, PLEASE NOTE THE FOLLOWING:

    - REFERENCES TO "WE", "OUR", "US" OR "MFC" MEAN MFC BANCORP LTD. AND ITS
      SUBSIDIARIES UNLESS THE CONTEXT OF THE SENTENCE CLEARLY SUGGESTS
      OTHERWISE;

    - ALL REFERENCES TO MONETARY AMOUNTS ARE IN CANADIAN DOLLARS UNLESS
      OTHERWISE INDICATED; AND

    - SELECTED FINANCIAL INFORMATION HAS BEEN PROVIDED IN U.S. DOLLARS FOR
      INFORMATIONAL PURPOSES USING AN EXCHANGE RATE OF ONE CANADIAN DOLLAR BEING
      EQUAL TO U.S.$0.6925, BEING THE FEDERAL RESERVE BANK OF NEW YORK RATE OF
      CONVERSION FOR CANADIAN DOLLARS TO U.S. DOLLARS AS AT DECEMBER 31, 1999.

THE COMPANY

    MFC was originally incorporated in June 1951 by letters patent. We were
continued under the CANADA BUSINESS CORPORATIONS ACT in March 1980 and under the
BUSINESS CORPORATIONS ACT (Yukon) in August 1996. Our name was changed to
"Nalcap Holdings Inc." in August 1987, to "Arbatax International Inc." in
March 1996 and to MFC in February 1997.

GENERAL

    We are a financial services company that focuses on merchant banking. We
provide specialized banking and corporate finance services internationally. We
advise clients on corporate strategy and structure, including mergers and
acquisitions and capital raising. We also commit our own capital to promising
enterprises and invest and trade to capture investment opportunities for our own
account. We seek to invest in businesses or assets whose intrinsic value is not
properly reflected in their share price or value. Our proprietary investing is
generally not passive and we seek investments where our financial expertise and
management can either add or unlock value. We are principally based in
Switzerland and our operations are primarily conducted in Europe and
North America.

BUSINESS OF MFC

    Our business focuses on providing innovative finance and advisory services
for corporate finance transactions and capital raising. We counsel clients on
business and financing strategy and the execution of transactions that advance
their strategic goals, including mergers, acquisitions, reorganizations and
divestitures, and assist in structuring and raising capital. We focus on meeting
the financial needs of small to mid-sized public companies and other business
enterprises primarily in Europe and North America. We believe that many of these
clients, particularly in Europe, are underserviced by the large global
investment banks and financial service providers. We specialize in advising and
structuring business enterprises involved in unstructured and novel situations
where a strong financial partner is needed and traditional, off-the-shelf
solutions are not workable. In addition, from time to time, we act as a bridge
lender or provide interim financing to business enterprises pending
reorganization or prior to their going public to generate fee income and in
conjunction with our investment strategy. In furtherance of this strategy, we
often advise and help restructure enterprises that are undergoing financial
stress or have or are near debt defaults.

    Our entrepreneurial experience and lean operating structure permit us to
respond more rapidly to our clients' needs than many of our larger competitors.
These traits are important to small and mid-sized business enterprises, many of
which do not have large internal corporate finance departments to handle their
capital requirements. We develop a partnership approach to assist those clients.
These activities are principally conducted through our wholly-owned subsidiary,
MFC Merchant Bank S.A. ("MFC Bank"). MFC Bank is a licensed full-service Swiss
bank based in Geneva, Switzerland. In 1999, we de-emphasized our private banking
services as a result of the global consolidation of asset managers and shrinking
margins. As a result, we now place such client assets with a large Swiss
Cantonal bank and other financial institutions. These arrangements let us
maintain key client relationships and mandates where we can provide value-added
advisory services and yet offer clients the security, capability and economies
of scale of a large Swiss banking institution.

                                       4
<PAGE>
    Our sources of revenues include fees and commissions from financial
services, interest income and related trading income. Service fees are generated
from the brokerage of securities, as well as securities custody and clearing and
agency services. We also earn fees from commitments to extend credit, standby
letters of credit and guarantees. We earn investment banking fees by providing
strategic and financial advice and arranging financing for clients. We earn
interest income through interest earned on our capital from securities margin
loans to clients. We earn trading income from the purchase and sale of debt and
equity securities for our own account.

    Our proprietary investing consists of investing our own capital and
utilizing our expertise to capture investment opportunities. We seek to invest
in businesses or assets whose intrinsic value is not properly reflected in their
share price or value. Our investing is generally not passive and we invest where
we believe our expertise in financial restructuring and management can add or
unlock value. We invest globally and our objective is to maximize total return
measured through both long-term appreciation and recognized gains.

    Our most important proprietary investment is our indirect interest in a
mineral royalty (the "royalty interest") in the Wabush Iron Ore Mine (the
"Wabush Mine") located in the Province of Newfoundland, Canada. It has provided
an uninterrupted source of fairly predictable revenue for over 30 years, which
we have used to finance our proprietary investments.

    The royalty interest consists of a mining sub-lease of the lands upon which
the Wabush Mine is situated that commenced in 1956 and expires in the year 2055.
The terms of the mining sub-lease do not provide for renewal. Pursuant to the
royalty interest, the operator of the Wabush Mine pays royalties to the holder
of the royalty interest based upon the amount of iron ore shipped from the
Wabush Mine. The per ton royalty amount increases or decreases with fluctuations
in the "world price" for iron ore pellets and the U.S. Iron and Steel Subgroup
Producer Price Index, subject to a minimum royalty amount of $0.75 per ton.
Revenues from the royalty interest are subject to a minimum annual royalty of
$3.25 million and are dependent on both the price levels for iron ore and the
amount of iron ore shipped from the Wabush Mine.

    Gross revenues from the royalty interest were $11.2 million, $12.9 million
and $13.1 million in 1999, 1998 and 1997, respectively. The royalty interest,
which is stated on our balance sheet at its historical cost of $1.7 million, was
independently appraised in 1998 at a mid-point value of $30.0 million on a
pre-tax basis using an 11% rate of return.

    We originally acquired the royalty interest in 1956 and, in 1992, assigned
our beneficial interest to Prada Holdings Ltd. ("Prada"), in exchange for its
preferred shares. We retained legal title to the royalty interest and are
responsible for all administration, receipt of payments, payment of taxes and
other matters relating to the royalty interest. The Prada preferred shares have
an annual dividend rate based upon the anticipated revenues to be received from
the royalty interest. We also own all of the outstanding debentures of Prada in
the approximate principal amount of $27.0 million. At the time of assignment
Prada had substantial Canadian tax losses, and the royalty interest represents
substantially all of its revenue.

    Other proprietary investments include an approximate 81% interest in
TriMaine Holdings, Inc. which holds a portfolio of undeveloped real estate
assets which are located in the Pacific Northwest region of the State of
Washington. We acquired this interest in 1996 at an aggregate cost of
approximately $13.4 million. We are conducting pre-development work relating to
infrastructure, rezoning, subdivision and permitting on a substantial portion of
the properties. We may develop some of the properties through partnerships,
joint ventures or other associations with local developers as an interim step in
the sale of a property and will continue pre-development work on the properties
to the extent necessary to protect or enhance their value. We intend to divest
or otherwise monetize these real estate assets and redeploy the proceeds in our
merchant banking activities. We may also seek to exchange these real estate
assets for equity interests.

    At December 31, 1999, we also had investments of approximately $3.6 million
relating to insurance obligations with respect to our insurance operations which
we originally acquired in 1991. All of the policies of our insurance operations
have expired and we manage and administer the outstanding claims in the ordinary
course. This investment portfolio consists of short-term and long-term fixed
interest debt securities as well as common and preferred shares.

    We are principally based in Geneva and Zurich, Switzerland and our
operations are primarily conducted in Europe and North America. We currently
employ 37 people.

                                       5
<PAGE>
    The following is a summary of our revenues by geographic region for the
years set forth:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
                                                                      (in thousands)
<S>                                                           <C>        <C>        <C>
Canada......................................................  $ 17,851   $ 31,392   $29,043
Switzerland.................................................    88,075     88,237    30,925
United States...............................................    19,600      3,681    26,092
                                                              --------   --------   -------
                                                              $125,526   $123,310   $86,060
                                                              ========   ========   =======
</TABLE>

    Our banking operations are subject to various Swiss regulatory requirements,
including capital requirements administered by the Swiss Federal Banking
Commission (the "SFBC"). The SFBC is our primary banking regulator and
establishes minimum capital requirements for MFC Bank. Our failure to meet
minimum capital requirements can result in mandatory, and possibly additional
discretionary action by the SFBC that, if undertaken, could have a direct
material effect on us. Under risk-based capital adequacy guidelines established
by the SFBC, banks in Switzerland must meet specific capital guidelines that
involve quantitative measures of assets, liabilities and other off-balance sheet
items, as calculated under Swiss regulatory accounting practices. Our banking
operations are required to file certain reports with the SFBC and we are subject
to their examination. MFC Bank is subject to restrictions on loans and
extensions of credit to, and on certain other types of transactions with,
affiliates. We believe that the capital of our banking operations is sufficient
for its current and reasonably foreseeable operations.

    Our banking operations place substantially all of their client deposits with
other major financial institutions on a fiduciary or trust basis and earn a fee
on the amount of money received from the counterparty. This is in contrast to
most North American banks, which generate revenue from the spread between their
cost of funds and the credit received. These fiduciary or trust deposits are
off-balance sheet items and permit us to generate revenues without committing or
tying up significant amounts of capital.

    Our primary risks are credit or counterparty risks, market risks and
transaction risks. We have adopted comprehensive risk management processes to
facilitate, control and monitor risk taking. Further, we do not engage in
certain businesses such as real estate or consumer lending. We enter into
derivative contracts only to provide products and services to clients and to
protect our foreign exchange exposure.

    Credit risk arises from the possibility that counterparties may default on
their obligations to us. These obligations can arise from placing money market
deposits, the extension of credit in trading and investment activities, and
participation in payment and securities transactions on our behalf and as an
agent on behalf of clients. We manage credit risk on an individual transaction,
counterparty level and on a portfolio basis. Credit limits for clients and
counterparties are established by our credit officers and management with
knowledge of the client's creditworthiness. In addition, we have established
policies and limitations with respect to our securities lending practices. Our
management also reviews and monitors exposure concentrations at a portfolio
level. To reduce credit or counterparty risk, we only place money market
deposits with major banks selected for their financial strength and reliability.
Further, we otherwise attempt only to deal with creditworthy counterparties and
obtain collateral where appropriate.

    Transaction risks can arise from our investment banking activities and
relate to the risks of the proposed transaction. These risks include market and
credit risks associated with underwriting securities as well as risks associated
with our role in providing advisory services. We manage transaction risk through
allocating and monitoring our capital requirements, only underwriting securities
in circumstances where the risk to our capital is minimal, careful screening of
clients and transactions, and engaging qualified personnel to manage
transactions.

    Market risks relate to fluctuations in the liquidity of securities, as well
as volatility in market conditions generally. The market for securities and
other related products are affected by many factors over which we have little or
no control. These factors include the financial performance and prospects of
specific companies and industries, world markets and economic conditions, the
availability of credit and capital, political events and perceptions of market
participants.

                                       6
<PAGE>
ACQUISITIONS

    We acquired MFC Bank in February 1997 for $27.4 million plus an annual fee
of between 0.25% to 0.50% of certain clients' assets held under management by it
at the time of sale and retained by it during the first three years after
closing, plus 50% of any actual Swiss tax savings realized by MFC Bank from the
utilization of its initial tax loss carry-forwards.

    In September 1997, we acquired Bank Rinderknecht AG ("BRA") for
$9.6 million. BRA was headquartered in Zurich, Switzerland and was active in
private banking and securities trading until it was placed in liquidation by the
SFBC in August 1997. Following its acquisition, we merged BRA with MFC Bank and
rationalized the combined operations, including transferring all administrative
activities to Geneva, Switzerland. The acquisition of BRA broadened our client
base and provided us with substantial future tax benefits, including tax loss
carry-forwards of approximately $44.0 million.

    In 1997, we also completed the acquisition of the MFC Securities group of
companies ("MFC Securities"), a bond trading enterprise based in Zurich,
Switzerland. We acquired MFC Securities for its approximate book value of
$15.7 million plus a contingent variable annual fee payable in cash or in common
shares of MFC, at the option of the vendors, and based upon MFC Securities'
future net-after-tax profits.

    We acquired approximately 35% of the outstanding common shares and three
million variable voting redeemable preferred shares of Drummond Financial
Corporation ("DFC") for an aggregate cost of approximately $11.8 million in
1996. DFC was an "asset lender" and over time we rationalized and collected its
loan portfolio. Subsequently, we increased our interest to approximately 49.4%
of the common shares of DFC, which, together with the preferred shares, provides
us with control over approximately 76% of the voting power. In 1998, we acquired
all of DFC's outstanding bonds in consideration of U.S.$15.2 million of our 8%
convertible subordinated bonds due April 2008.

COMPETITION

    We conduct our business in a global environment that is highly competitive
and unpredictable. We compete against brokerage firms, investment banks,
merchant banks and other investment managers. We face competition in Switzerland
from other banks, asset managers and a range of non-bank financial institutions
and internationally from investment banks and securities dealers. Many of our
competitors are national or international companies with far greater resources,
capital and access to information than us. As a result, we may become involved
in transactions with more risk.

    Numerous variables may have a material effect on our results of operations,
including:

    - economic and market conditions, including the liquidity of capital
      markets;

    - the volatility of market prices, rates and indices;

    - the timing and volume of market activity;

    - inflation;

    - the cost of capital, including interest rates;

    - political events, including legislative, regulatory and other
      developments;

    - competitive forces, including our ability to attract and retain personnel;

    - support systems; and

    - investor sentiment.

ITEM 2.  DESCRIPTION OF PROPERTIES

    Our principal office is located in Geneva, Switzerland and we also maintain
offices in Zurich, Switzerland and Toronto, Canada. All of our premises
are leased.

                                       7
<PAGE>
    We participate in the royalty interest through our ownership of preferred
shares of Prada issued in exchange for a beneficial interest in the royalty
interest. The royalty interest consists of a mining sub-lease of the lands upon
which the Wabush Mine is situated that commenced in 1956 and expires in the year
2055. The lessor is Knoll Lake Minerals Limited ("Knoll Lake"), which holds a
mining lease from the Province of Newfoundland, Canada. We own 39.5% of the
outstanding capital stock of Knoll Lake. The lease requires the payment of
royalties to Knoll Lake of $0.22 per ton on shipments of iron ore from the
Wabush Mine. Knoll Lake pays annual dividends to its shareholders equal to its
royalties less expenses and income taxes.

    We transferred our interest in the mining site and surface rights to the
Wabush Mine to Wabush Iron Company Limited, which is owned by the Interlake Iron
Corporation, Inland Steel Company and Pickands, Mather & Company, for a term
co-extensive with our original lease.

    Iron ore is shipped from the Wabush Mine to Pointe Noire, Quebec, Canada,
where it is pelletized. Geological studies done on the Wabush Mine to date have
estimated that the mine has iron ore deposits of approximately 713 million tons
averaging 34.5 fe. In 1997, 1998 and 1999, 5.7 million, 5.6 million and
5.5 million tons of iron ore, respectively, were shipped from the Wabush Mine.

    The Wabush Mine is operated by an unincorporated joint venture consisting of
Wabush Iron Company Limited (U.S.A.), Steel Company of Canada Limited (Canada)
and Dominion Foundries & Steel Limited (Canada) (collectively, the
"Consortium"), which pays royalties to the holder of the royalty interest based
upon the amount of iron ore shipped from the Wabush Mine. These royalties are
not to be less than $3.25 million annually until the year 2055. In 1987, the
royalty rate specified in the base price was amended to require a base royalty
rate of $1.685 per ton with escalations as defined by agreement. The prior
agreement with the Consortium with respect to renegotiating escalations to the
base rate has expired.

    Iron ore is typically sold either as a concentrate, whereby the iron ore is
in granular form, or as a pellet, whereby iron ore concentrate has been mixed
with a binding agent, formed into a pellet and then fired in a furnace. Iron ore
pellets can be charged directly into blast furnaces without further processing
and are primarily used to produce pig iron which is subsequently transformed
into steel. As such, the demand and, consequently, the pricing of iron ore is
dependent upon the raw material requirements of integrated steel producers.
Demand for blast furnace steel is in turn cyclical in nature and is influenced
by, among other things, the level of general economic activity. As the operator
of the Wabush Mine is owned by the Consortium of steel producers, production
from the mine has been generally maintained at relatively consistent levels.

    The royalty interest is subject to an escalation tax that is payable to the
Province of Newfoundland, Canada based upon the amount of iron ore shipped from
the Wabush Mine and computed pursuant to the Mesabi Old Range Non-Bessemer ore
market price (the "Reference Price"). The escalation tax was $0.37 per ton in
each of 1997, 1998 and 1999. The Reference Price has ceased to be published and
we are discussing possible alternatives with the Government of Newfoundland.

    We also indirectly own approximately 102 acres of undeveloped real property
which is annexed to the City of Gig Harbour, Washington, which is located at the
west end of the Tacoma Narrows Bridge from Tacoma, Washington. Of the total
acreage, 50 acres are now zoned for retail/commercial use, 35 acres for medium
density (8 units per acre) residential use and 17 acres for business
park/professional office use. The retail portion of the property is under an
option agreement for the development of a regional shopping centre. We may
develop all or part of the remaining land through partnerships, joint ventures
or other economic associations with local developers. Our current involvement
with the property is limited to pre-development work, including infrastructure
(roads, sewer and water services), preliminary permits, market studies,
feasibility studies and related activities.

    We also indirectly own a 17.2 acre property located in Federal Way,
Washington located north of South 356th Street on Pacific Highway South. This
property is zoned business park and all utilities are available to the site. The
site is encumbered by a wetland area which has been estimated at 2.4 acres
exclusive of setback requirements. Currently, site approval applications have
been made for an 800-unit self-storage facility and an 80,000 square foot
warehouse/office facility.

                                       8
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS

    In 1999, we successfully appealed a Canada Customs and Revenue Agency tax
reassessment which would have resulted in additional taxes of approximately
$9.8 million and reduced our non-taxable loss for 1993.

    We are subject to routine litigation incidental to our business but do not
anticipate that the outcome of such litigation will have a material adverse
effect on our business or financial condition.

ITEM 4.  CONTROL OF REGISTRANT

    The following table sets forth certain information as at March 31, 2000
concerning the ownership of our common shares as to each person known to us,
based solely upon public records and filings, to be the direct and/or indirect
owner of more than ten percent of our common shares:

<TABLE>
<CAPTION>
TITLE OF CLASS                                   IDENTITY OF PERSON OR GROUP   AMOUNT OWNED   PERCENT OF CLASS
--------------                                   ---------------------------   ------------   ----------------
<S>                                              <C>                           <C>            <C>
Common shares..................................     Peter Kellogg              2,188,800(1)      18.2%
</TABLE>

---------------

(1) In his public filings, Mr. Kellogg disclaims beneficial ownership of
    1,975,500 of the shares, or approximately 16.4% of our issued and
    outstanding shares.

    MFC's officers and directors, as a group, own or control, directly or
indirectly, an aggregate of 1,104,943 common shares and have options on
1,584,500 common shares, representing approximately 19.7% of our common shares
on a fully diluted basis.

ITEM 5.  NATURE OF TRADING MARKET

MARKET INFORMATION

    Our common shares are quoted on the Nasdaq National Market ("Nasdaq") under
the symbol "MXBIF" and on the Frankfurt Stock Exchange under the symbol "MFC
GR". The following table sets forth the quarterly high and low sales prices of
our common shares on Nasdaq for the periods indicated:

<TABLE>
<CAPTION>
                                                                      NASDAQ
                                                              ----------------------
                                                                 HIGH         LOW
                                                              ----------   ---------
<S>                                                           <C>          <C>
1998
March 31....................................................  U.S.$14.06   U.S.$9.88
June 30.....................................................       14.38        9.50
September 30................................................       10.31        5.88
December 31.................................................        9.25        4.69

1999
March 31....................................................        9.00        6.50
June 30.....................................................        8.31        5.81
September 30................................................       12.25        6.31
December 31.................................................        9.50        7.50

2000
March 31....................................................       10.00        6.75
April 1 to April 25.........................................        8.00        6.81
</TABLE>

SHAREHOLDER DISTRIBUTION

    As at April 25, 2000, there were approximately 2,178 holders of record of
our common shares and a total of 12,042,156 common shares were outstanding.
Approximately 10,764,337 or 89% of our common shares are held of record by 1,828
U.S. holders, including depositories and clearing agencies.

                                       9
<PAGE>
DIVIDEND INFORMATION

    The actual timing, payment and amount of dividends paid on our common shares
is determined by our board of directors, based upon things such as our cash
flow, results of operations and financial condition, the need for funds to
finance ongoing operations and such other business considerations as our board
of directors considers relevant. In June 1997, we paid a dividend of $0.01 per
share and, in June 1998, we paid a dividend of U.S.$0.02 per share.

ITEM 6.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

    There are presently no governmental laws, decrees or regulations in Canada
which restrict the export or import of capital, or which impose foreign exchange
controls or affect the remittance of interest, dividends or other payments to
non-resident holders of MFC's common shares. However, any remittances of
dividends to United States residents are subject to a 15% withholding tax (5% if
the beneficial owner of the dividends is a corporation owning at least 10% of
the voting shares of MFC) pursuant to Article X of the Canada-U.S. Tax
Convention (1980), as amended (the "Treaty"). See "ITEM 7. Taxation".

    Except as provided in the INVESTMENT CANADA ACT (the "ICA"), there are no
limitations specific to the rights of non-Canadians to hold or vote our common
shares under the laws of Canada or the Yukon Territory, or in our charter
documents. The following summarizes the principal features of the ICA for
non-Canadian residents proposing to acquire our common shares. THIS SUMMARY IS
OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSTRUED
TO BE, LEGAL ADVICE TO ANY HOLDER OR PROSPECTIVE HOLDER OF OUR COMMON SHARES,
AND NO OPINION OR REPRESENTATION TO ANY HOLDER OR PROSPECTIVE HOLDER OF OUR
COMMON SHARES IS HEREBY MADE. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF
OUR COMMON SHARES SHOULD CONSULT WITH THEIR OWN LEGAL ADVISORS WITH RESPECT TO
THE CONSEQUENCES OF PURCHASING AND OWNING OUR COMMON SHARES.

    The ICA governs the acquisition of Canadian businesses by non-Canadians.
Under the ICA, non-Canadian persons or entities acquiring "control" (as defined
in the ICA) of a corporation carrying on business in Canada are required to
either notify, or file an application for review with, Investment Canada, the
federal agency created by the ICA. Investment Canada may review any transaction
which results in the direct or indirect acquisition of control of a Canadian
business, where the gross value of corporate assets exceeds certain threshold
levels (such thresholds being favourably varied for U.S. citizens by legislation
relating to the Canada-U.S. Free Trade Agreement) or where the activity of the
business is related to Canada's cultural heritage or national identity. No
change of voting control will be deemed to have occurred, for purposes of the
ICA, if less than one-third of the voting control of a Canadian corporation is
acquired by an investor.

    If an investment is reviewable under the ICA, an application for review in
the form prescribed is normally required to be filed with Investment Canada
prior to the investment taking place, and the investment may not be implemented
until the review has been completed and the Minister responsible for Investment
Canada is satisfied that the investment is likely to be of net benefit to
Canada. If the Minister is not satisfied that the investment is likely to be of
net benefit to Canada, the non-Canadian applicant must not implement
the investment, or if the investment has been implemented, may be required to
divest itself of control of the Canadian business that is the subject of
the investment.

    Certain transactions relating to our common shares would be exempt from the
ICA, including:

    (a) the acquisition of our common shares by a person in the ordinary course
       of that person's business as a trader or dealer in securities;

    (b) the acquisition of control of MFC in connection with the realization of
       security granted for a loan or other financial assistance and not for a
       purpose related to the provisions of the ICA; and

    (c) the acquisition of control of MFC by reason of an amalgamation, merger,
       consolidation or corporate reorganization following which the ultimate
       direct control in fact of MFC, through ownership of our common shares,
       remains unchanged.

                                       10
<PAGE>
ITEM 7.  TAXATION

CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES

    We consider that the following general summary fairly describes the
principal Canadian federal income tax consequences applicable to a holder of our
common shares who is a resident of the United States, who is not a resident of
Canada and who does not use or hold, and is not deemed to use or hold, his
common shares of MFC in connection with carrying on a business in Canada (a
"non-resident holder").

    This summary is based upon the current provisions of the INCOME TAX ACT
(Canada) (the "ITA"), the regulations thereunder and the current publicly
announced administrative and assessing policies of the Canada Customs and
Revenue Agency, Taxation. This description is not exhaustive of all possible
Canadian federal income tax consequences and does not take into account or
anticipate any changes in law, whether by legislative, governmental or
judicial action.

    THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, AND
SHOULD NOT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OR PROSPECTIVE
HOLDER OF OUR COMMON SHARES, AND NO OPINION OR REPRESENTATION WITH RESPECT TO
THE TAX CONSEQUENCES TO ANY HOLDER OR PROSPECTIVE HOLDER OF OUR COMMON SHARES IS
MADE. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES SHOULD
CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME TAX CONSEQUENCES
OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES.

DIVIDENDS

    Dividends paid on our common shares to a non-resident holder will be subject
to withholding tax. The Treaty provides that the ITA's standard 25% withholding
tax rate is reduced to 15% on dividends paid on shares of a corporation resident
in Canada (such as MFC) to residents of the United States, and also provides for
a further reduction of this rate to 5% where the beneficial owner of the
dividends is a corporation resident in the United States that owns at least 10%
of the voting shares of the corporation paying the dividend.

CAPITAL GAINS

    A non-resident holder is not subject to tax under the ITA in respect of a
capital gain realized upon the disposition of a share of MFC unless the share
represents "taxable Canadian property" to the holder thereof. Our common shares
will be considered taxable Canadian property to a nonresident holder if:

    (a) the non-resident holder;

    (b) persons with whom the non-resident holder did not deal at arm's
       length; or

    (c) the non-resident holder and persons with whom such non-resident holder
       did not deal at arm's length,

owned not less than 25% of the issued shares of any class of our capital stock
at any time during the five year period preceding the disposition of such
shares. In the case of a non-resident holder to whom shares of MFC represent
taxable Canadian property and who is resident in the United States, no Canadian
taxes will generally be payable on a capital gain realized on such shares by
reason of the Treaty unless the value of such shares is derived principally from
real property situated in Canada.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

    The following is a general discussion of certain possible United States
Federal foreign income tax matters under current law, generally applicable to a
U.S. Holder (as defined below) of our common shares who holds such shares as
capital assets. This discussion does not address all relevant Federal income tax
matters and it does not address consequences peculiar to persons subject to
special provisions of Federal income tax law, such as those described below as
excluded from the definition of a U.S. Holder. In addition, this discussion does
not cover any state, local or foreign tax consequences. See "Certain Canadian
Federal Income Tax Consequences" above.

    The following discussion is based upon the sections of the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal
Revenue Service ("IRS") rulings, published administrative positions of the IRS
and court decisions that are currently applicable, any or all of which could be
materially and

                                       11
<PAGE>
adversely changed, possibly on a retroactive basis, at any time. In addition,
this discussion does not consider the potential effects, both adverse and
beneficial, of any recently proposed legislation which, if enacted, could be
applied, possibly on a retroactive basis, at any time.

    THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED
TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OR
PROSPECTIVE HOLDER OF OUR COMMON SHARES, AND NO OPINION OR REPRESENTATION WITH
RESPECT TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO ANY SUCH HOLDER
OR PROSPECTIVE HOLDER IS MADE. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF
OUR COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS ABOUT THE FEDERAL,
STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING
OF OUR COMMON SHARES.

U.S. HOLDERS

    As used herein, a "U.S. Holder" includes a holder of our common shares who
is a citizen or resident of the United States, a corporation created or
organized in or under the laws of the United States or of any political
subdivision thereof, any entity which is taxable as a corporation for U.S. tax
purposes and any other person or entity whose ownership of our common shares is
effectively connected with the conduct of a trade or business in the United
States. A U.S. Holder does not include persons subject to special provisions of
Federal income tax law, such as tax-exempt organizations, qualified retirement
plans, financial institutions, insurance companies, real estate investment
trusts, regulated investment companies, broker-dealers, non-resident alien
individuals or foreign corporations whose ownership of our common shares is not
effectively connected with the conduct of a trade or business in the United
States and shareholders who acquired their shares through the exercise of
employee stock options or otherwise as compensation.

FOREIGN TAX CREDIT

    A U.S. Holder who pays (or has withheld from distributions) Canadian income
tax with respect to the ownership of our common shares may be entitled, at the
option of the U.S. Holder, to either a deduction or a tax credit for such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a
credit because a credit reduces United States Federal income taxes on a
dollar-for-dollar basis, while a deduction merely reduces the taxpayer's income
subject to tax. This election is made on a year-by-year basis and generally
applies to all foreign income taxes paid by (or withheld from) the U.S. Holder
during that year. There are significant and complex limitations which apply to
the credit, among which is an ownership period requirement and the general
limitation that the credit cannot exceed the proportionate share of the
U.S. Holder's United States income tax liability that the U.S. Holder's foreign
source income bears to his or its worldwide taxable income. In determining the
application of this limitation, the various items of income and deduction must
be classified into foreign and domestic sources. Complex rules govern this
classification process. There are further limitations on the foreign tax credit
for certain types of income such as "passive income", "high withholding tax
interest", "financial services income", "shipping income", and certain other
classifications of income. The availability of the foreign tax credit and the
application of the limitations on the credit are fact specific and holders and
prospective holders of our common shares should consult their own tax advisors
regarding their individual circumstances.

PASSIVE FOREIGN INVESTMENT CORPORATION

    We do not believe that we are a passive foreign investment corporation (a
"PFIC"). If a U.S. Holder disposes of shares in a PFIC, any resultant gain will
be subject to a tax that is determined by apportioning the gain pro rata over
the entire holding period of the shares. The amount of gain that is apportioned
to the current year, and to any pre-1987 holding period, is included in the
U.S. Holder's current income.

    The tax on the amount apportioned to any prior years beginning with 1987 is
calculated using the highest tax rate in each applicable year. In addition,
interest compounded daily is charged on the tax due for each prior year from the
due date of the return for the respective year to the due date for the current
year. The interest rate is set quarterly. The U.S. Holder's current year tax is
increased by the special tax and interest on amounts apportioned to
prior years.

                                       12
<PAGE>
    A U.S. Holder can avoid this special tax and interest charge by making a
permanent election to treat a PFIC as a "qualified electing fund" and to report
in each year thereafter such shareholder's pro rata share of the ordinary
earnings and net capital gains of a PFIC. If the election is not made in the
first year that the U.S. Holder owns the shares, a special election would have
to be made to cleanse the effect of the prior year's holding periods.

    These rules apply similarly to distributions from a PFIC that would be
considered excess distributions. Complex rules govern the determination of
applicable gains and excess distributions, the calculation of the amounts
allocated pro rata to prior years, the resultant tax and applicable interest,
and the qualified electing fund elections whether as pedigreed or non-pedigreed.
Holders and prospective holders of common shares of a PFIC should consult their
own tax advisors regarding their individual circumstances.

ITEM 8.  SELECTED FINANCIAL DATA

    The following table summarizes selected consolidated financial data for us
prepared in accordance with Canadian generally accepted accounting principles
("Canadian GAAP"). Additional information is presented to show the difference
which would result from the application of United States generally accepted
accounting principles ("U.S. GAAP") to MFC's financial information. For a
description of the differences between Canadian GAAP and U.S. GAAP, see Note 17
of our consolidated financial statements included elsewhere in this annual
report. The information in the table was extracted from the more detailed
consolidated financial statements and related notes included herein and should
be read in conjunction with such financial statements and with the information
appearing under the heading, "ITEM 9. Management's Discussion and Analysis of
Financial Condition and Results of Operations".

CANADIAN GAAP

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                  ----------------------------------------------------
                                                    1999       1998       1997       1996       1995
                                                  --------   --------   --------   --------   --------
                                                      (in thousands, other than per share amounts)
<S>                                               <C>        <C>        <C>        <C>        <C>
Revenues........................................  $125,526   $123,310   $ 86,060   $ 75,467   $26,329
Income (loss) from continuing operations........    36,328     30,235     23,617     13,994    (1,235)
Income (loss) from continuing operations per
  share Basic(1)................................      3.00       2.48       1.95       1.52     (0.15)
  Fully diluted(1)..............................      2.60       2.20       1.79       1.37     (0.15)
Net income (loss)...............................    31,389     30,235     23,617     13,994    (1,235)
Net income (loss) per share Basic(1)............      2.59       2.48       1.95       1.52     (0.15)
  Fully diluted(1)..............................      2.28       2.20       1.79       1.37     (0.15)
Total assets....................................   270,107    238,109    226,890    160,368    73,551
Debt............................................    30,917     40,091     41,602     42,937        --
Shareholders' equity............................   170,811    154,396    120,156     91,516    51,383
Cash dividends(2)...............................        --        369        106         --        --
Cash dividends per share(2).....................        --       0.03       0.01         --        --
</TABLE>

---------------

(1) All amounts have been adjusted to reflect a 1 to 1.5 stock split effected in
    March 1996.

(2) Paid on MFC's common shares.

                                       13
<PAGE>
U.S. GAAP

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                  ----------------------------------------------------
                                                    1999       1998       1997       1996       1995
                                                  --------   --------   --------   --------   --------
                                                      (in thousands, other than per share amounts)
<S>                                               <C>        <C>        <C>        <C>        <C>
Revenues........................................  $128,270   $118,842   $ 83,138   $ 72,094   $26,329
Income (loss) from continuing operations........    40,313     31,922     12,365     13,329    (1,600)
Income (loss) from continuing operations per
  share Basic(1)................................      3.33       2.62       1.07       1.45     (0.20)
  Diluted(1)....................................      3.12       2.42       1.00       1.41     (0.20)
Net income (loss)...............................    35,374     31,922     12,365     13,329    (1,600)
Net income (loss) per share Basic(1)............      2.92       2.62       1.07       1.45     (0.20)
  Diluted(1)....................................      2.75       2.42       1.00       1.41     (0.20)
Total assets....................................   265,658    229,529    223,528    173,597    77,711
Debt............................................    30,917     40,091     41,602     42,937        --
Shareholders' equity............................   166,363    146,969    112,721     95,331    58,416
Cash dividends(2)...............................        --        369        106         --        --
Cash dividends per share(2).....................        --       0.03       0.01         --        --
</TABLE>

---------------

(1) All amounts have been adjusted to reflect a 1 to 1.5 stock split effected in
    March 1996.

(2) Paid on MFC's common shares.

ITEM 9.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    The following discussion and analysis of our financial condition and results
of operations for the three years ended December 31, 1999 should be read in
conjunction with our consolidated financial statements and related notes
included in this annual report. Our financial statements included herein were
prepared in accordance with Canadian GAAP. For a reconciliation of our financial
statements included herein to U.S. GAAP, see Note 17 to the financial
statements. We have made certain reclassifications to the prior periods'
financial statements to conform to the current period's presentation.

RESULTS OF OPERATIONS

    We are a financial services company that focuses upon merchant banking. We
provide specialized banking and corporate finance services internationally.
These activities are primarily conducted through our wholly-owned subsidiary,
MFC Merchant Bank S.A. We also commit our own capital to promising enterprises
and invest and otherwise trade to capture investment opportunities for our own
account. We seek to invest in businesses or assets whose intrinsic value is not
properly reflected in their share price or value. Our investing is generally not
passive. We seek investments where our financial and management expertise can
add or unlock value.

    MFC's results of operations may be materially affected by market
fluctuations and economic factors. In addition, our results of operations have
been and may continue to be affected by many factors of a global nature,
including economic and market conditions, the availability of capital, the level
and volatility of equity prices and interest rates, currency values and other
market indices, technological changes, the availability of credit, inflation and
legislative and regulatory developments. Our results of operations may also be
materially affected by competitive factors. Competition includes firms
traditionally engaged in financial services such as banks, broker-dealers and
investment dealers, along with other sources such as insurance companies, mutual
fund groups, on-line service providers and other companies offering financial
services in Europe and globally.

    In recent years, the financial services industry has experienced
consolidation and convergence as financial institutions involved in a broad
spectrum of services have merged or combined. The trend to consolidate is
expected to continue and produce global financial institutions with much greater
capital and other resources than MFC. As a result of the economic and
competitive factors discussed above, our results may vary significantly from
period to period. We intend to manage our business for the long term and to
mitigate the

                                       14
<PAGE>
effect of such factors by focusing on our core operations of meeting the
financial needs of small to mid-sized public companies and other business
enterprises internationally.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 1998

    The following table provides selected quarterly financial information for
MFC for each quarter of 1999:

<TABLE>
<CAPTION>
                                                                               1999
                                                        ---------------------------------------------------
                                                        DECEMBER 31    SEPTEMBER 30    JUNE 30    MARCH 31
                                                        ------------   -------------   --------   ---------
                                                           (in thousands, other than per share amounts)
<S>                                                     <C>            <C>             <C>        <C>
Revenues..............................................    $ 52,098       $ 24,038      $ 25,929    $23,461
Expenses..............................................      39,024         13,538        18,589     18,283
Net income............................................       8,630         10,425         7,262      5,072
Fully diluted earnings per share......................        0.62           0.74          0.53       0.39
Total assets..........................................     270,107        273,369       259,275    244,717
Shareholders' equity..................................     170,811        167,887       155,592    153,726
</TABLE>

    In 1999, our revenues increased to $125.5 million from $123.3 million in
1998, primarily as a result of trading activities. Our investment portfolio
remains principally invested in investment grade securities. In 1999, we
de-emphasized our private banking services largely as a result of the global
consolidation of asset managers and shrinking margins. As a result, commencing
in the third quarter of 1999, we have focused on providing value-added advisory
services to our clients.

    In 1999, we began electronic banking and equities trading for our clients
through our NetBanking website. In March 2000, we discontinued operation of the
website due to changing economic fundamentals in Europe, including increasing
price competition and customer acquisition costs. As a result, we took a
one-time loss from such discontinued operations of $4.9 million, or $0.32 per
share on a fully diluted basis, for the year ended December 31, 1999.

    Expenses from continuing operations decreased to $89.4 million in 1999 from
$92.8 million in 1998, primarily as a result of lower investment expenses.
General and administrative expenses decreased marginally to $19.3 million in
1999 from $19.4 million in 1998. Interest expense increased marginally to
$4.9 million in 1999 from $4.8 million in 1998.

    In 1999, net earnings were $31.4 million or $2.59 per share on a basic basis
($2.28 per share on a fully diluted basis). Income from continuing operations in
1999 was $36.3 million, or $3.00 per share on a basic basis ($2.60 per share on
a fully diluted basis). In 1998, net earnings were $30.2 million or $2.48 per
share on a basic basis ($2.20 per share on a fully diluted basis). Net earnings
in 1998 included $8.1 million on the purchase of debt securities.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO THE YEAR ENDED DECEMBER 31, 1997

    In 1998, our revenues increased by approximately 43.3% to $123.3 million
from $86.1 million in 1997, primarily due to increased banking and financial
services fees. Banking and financial services fees increased by 41.8% in 1998
from 1997, as a result of the inclusion of the results of MFC Bank for the full
year. The acquisition of MFC Bank resulted in our generating revenues from
operations such as brokerage commissions, foreign exchange trading fees, asset
management and related fees and banking fees generated from placing customer
deposits on a fiduciary basis with counterparties. The increase in revenues
resulted primarily from an increase in the amount of assets under management and
higher revenues from corporate finance advisory services. Revenues from
investments increased by 56.5% in 1998 from 1997, as a result of greater trading
activities. Our investment portfolio remains principally invested in investment
grade securities.

    Expenses increased to $92.8 million in 1998 from $61.2 million in 1997,
primarily as a result of higher revenues. General and administrative expenses
increased to $19.4 million in 1998 from $12.4 million in 1997, primarily due to
the inclusion of the results of MFC Bank for the full year and higher revenues.
Interest expense decreased to $4.8 million in 1998 from $5.1 million in 1997,
primarily due to a decrease in amounts borrowed during the year.

                                       15
<PAGE>
    In 1998, net earnings were $30.2 million or $2.48 per share on a basic basis
($2.20 per share on a fully diluted basis). Net earnings in 1998 included
$8.1 million on the purchase of debt securities. In 1997, net earnings were
$23.6 million or $1.95 per share on a basic basis ($1.79 per share on a fully
diluted basis). Net earnings in 1997 included $2.9 million on the purchase of
debt securities. Increased revenues from banking and financial services
contributed to improved earnings in 1998, which were partially offset by
increased expenses related to investment securities and higher general and
administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

    The following table is a summary of selected financial information
concerning MFC for the periods indicated:

<TABLE>
<CAPTION>
                                                       DECEMBER 31,              DECEMBER 31,
                                                   ---------------------   ------------------------
                                                     1999         1998       1999            1998
                                                   --------     --------   --------        --------
<S>                                                <C>          <C>        <C>             <C>
                                                     (U.S. Dollars in        (Canadian Dollars in
                                                        thousands,                thousands,
                                                        other than         other than percentages)
                                                       percentages)
Cash and cash equivalents........................  $ 34,343     $ 25,398   $ 49,567        $ 38,871
Securities.......................................    46,981       50,309     67,808          76,998
Total assets.....................................   187,145      155,576    270,107         238,109
Debt.............................................    21,421       26,195     30,917          40,091
Shareholders' equity.............................   118,348      100,878    170,811         154,396
Return on equity from continuing operations......     23.5%        25.2%      23.5%           25.2%
</TABLE>

    We maintain a high level of liquidity, with a substantial amount of our
assets held in cash and cash equivalents, highly liquid marketable securities
and customer loans collateralized by marketable securities. The highly liquid
nature of these assets provides us with flexibility in managing our business and
financing. We also use this liquidity in client related services where we act as
a financial intermediary for third parties and in our own proprietary investing
activities.

    At December 31, 1999, our cash and cash equivalents were $49.6 million,
compared to $38.9 million at December 31, 1998. At December 31, 1999, we had
securities of $67.8 million, compared to $77.0 million at December 31, 1998.

    We view return on equity to be an important measure of our performance, in
the context of both the particular business environment in which we operate and
our peer group's results. In 1999 and 1998, respectively, our return on equity
was over 23%. We manage our capital position based upon, among other things,
business opportunities, capital availability and rates of return, together with
internal capital policies and regulatory requirements.

OPERATING ACTIVITIES

    Operating activities provided cash of $29.9 million in 1999, compared to
using cash of $1.0 million in 1998. In 1999, a decrease in receivables provided
cash of $1.7 million compared to using cash of $4.3 million in 1998. An increase
in amounts due from investment dealers used cash of $11.1 million and
$7.8 million in 1999 and 1998, respectively. A decrease in accounts payable and
accrued expenses used cash of $1.0 million in 1999. We expect to generate
sufficient cash flow from operations to meet our working capital requirements.

INVESTING ACTIVITIES

    Investing activities used cash of $35.7 million in 1999, compared to
$1.6 million in 1998. In 1999, a net increase in margin loans used cash of
$34.7 million, compared to $0.2 million in 1998. In 1999, purchases of
subsidiaries used cash of $0.7 million.

FINANCING ACTIVITIES

    Net cash provided by financing activities was $26.8 million in 1999,
compared to $4.9 million used in 1998. Net debt repayment used cash of
$7.2 million in 1999, compared to net borrowings providing cash of

                                       16
<PAGE>
$10.4 million in 1998. In 1999, a net increase in deposits associated with
margin loans granted by us provided cash of $34.3 million, compared to a net
decrease in deposits using $10.1 million in 1998. The net repurchase of common
shares in 1999 used cash of $0.2 million, compared to $4.7 million in 1998. We
did not pay dividends on our common shares in 1999, compared to paying
$0.4 million in dividends in 1998.

FOREIGN CURRENCY

    Substantially all of our operations are conducted in international markets
and our consolidated financial results are subject to foreign currency exchange
rate fluctuations, in particular, those in Switzerland.

    We translate foreign assets and liabilities into Canadian dollars at the
rate of exchange on the balance sheet date. Revenues and expenses are translated
at the average rate of exchange prevailing during the period. Unrealized gains
or losses from these translations are recorded as shareholders' equity on the
balance sheet and do not affect our net earnings.

    As a substantial amount of our revenues are received in Swiss francs, our
financial position for any given period, when reported in Canadian dollars, can
be significantly affected by the exchange rate for Swiss francs prevailing
during that period. In the year ended December 31, 1999, we reported
approximately a net $14.8 million foreign exchange translation loss and, as a
result, our cumulative foreign exchange translation loss at December 31, 1999
was $4.3 million, compared to a $10.5 million gain at December 31, 1998.

    Since both our principal sources of revenues and expenses are in Swiss
francs, we use derivatives to protect our foreign exchange exposure. See
"Item 9A--Quantitative and Qualitative Disclosures About Market Risk".

    Based upon the period average exchange rate in 1999, the Canadian dollar
increased by approximately 12.5% in value against the Swiss franc since
December 31, 1998.

EUROPEAN ECONOMIC AND MONETARY UNION

    The Economic and Monetary Union ("EMU") has replaced the national currencies
of eleven participating European countries with a single European currency, the
"Euro". The Euro was launched in January 1, 1999 when the European Central Bank
assumed monetary policy for the participating nations. During a transition
period, until the national currencies from the participating members are
withdrawn from circulation (July 2002 at the latest), such currencies will
continue to exist but only as fixed denominations of the Euro.

    Our business is primarily based in Switzerland. Although Switzerland is not
a participating member country of the EMU and did not adopt the Euro, we
commenced preparations for the introduction of the Euro in 1998 and implemented
modifications to our information and technology systems and programs in order to
prepare for the transition. Preparations included modifications to our computer
systems and programs and coordination with clients and other counterparties to
ensure a smooth transition to the Euro. We were able to successfully transact
business in the Euro beginning on January 1, 1999. Costs associated with
modifications and other preparations necessary to prepare for the transition to
the Euro were not material and were funded through operating cash flow and
expensed in the period in which they were incurred.

    The introduction of the Euro has and will continue to result in greater
cross-border transparency and will have a significant impact on European
financial markets. The Euro is expected to present business opportunities for
all participants in the European financial markets, including MFC.

DERIVATIVE INSTRUMENTS

    Derivatives are financial instruments, the payments of which are linked to
the prices, or relationships between prices, of securities or commodities,
interest rates, currency exchange rates or other financial measures. Derivatives
are designed to enable parties to manage their exposure to interest rates and
currency exchange rates, and security and other price risks. We use derivatives
to provide products and services to clients and for our own account to protect
our foreign exchange exposure.

                                       17
<PAGE>
YEAR 2000

    We did not experience any difficulties associated with the changeover to the
year 2000. While our management believes that it took adequate steps to address
the year 2000 issue, and we are not aware of any difficulties experienced by our
clients associated with the changeover to the year 2000, there can be no
assurance that difficulties associated with the year 2000 may not arise in the
future.

INFLATION

    We do not believe that inflation has had a material impact on revenues or
income over the past three fiscal years. Because our assets to a large extent
are liquid in nature, they are not significantly affected by inflation. However,
increases in inflation could result in increases in our expenses, which may not
be readily recoverable in the price of services provided to our clients. To the
extent inflation results in rising interest rates and has other adverse effects
on capital markets, it could adversely affect our financial position and
profitability.

ITEM 9A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are exposed to market risk from changes in interest rates, foreign
currency exchange rates and equity prices which may affect our results of
operations and financial condition. We manage these risks through internal risk
management policies which are administered by management committees. We also
entered into derivative foreign exchange forward contracts for our own account,
which has an aggregate notional amount of $8.7 million, to hedge against these
risks.

INTEREST RATE RISK

    Fluctuations in interest rates may affect the fair value of financial
instruments sensitive to interest rates. An increase in interest rates may
decrease the fair value and a decrease in interest rates may increase the fair
value of such financial instruments. Our financial instruments which may be
sensitive to interest rate fluctuations are investments and debt obligations.
The following tables provide information about our exposure to interest rate
fluctuations for the carrying amount of financial instruments that may be
sensitive to such fluctuations as at December 31, 1999 and 1998, respectively,
and expected cash flows from these instruments.

                            AS AT DECEMBER 31, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       2000       2001       2002       2003       2004     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $29,965    $30,086    $26,474    $    --    $    --    $    --    $ 3,612      $    --
Debt obligations(2).....   20,445     16,356         --         --         --         --         --       16,356
</TABLE>

------------

(1) Investments consist of debt securities.

(2) Debt obligations consist of the bonds which mature on March 31, 2008 and
    bear interest at 8% per annum.

                            AS AT DECEMBER 31, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       1999       2000       2001       2002       2003     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $44,937    $45,536    $27,742    $ 2,358    $ 1,532    $    --    $ 8,099      $ 5,805
Debt obligations(2).....   22,834     20,550         --         --         --         --         --       20,550
</TABLE>

------------

(1) Investments consist of debt securities.

(2) Debt obligations consist of the bonds which mature on March 31, 2008 and
    bear interest at 8% per annum.

                                       18
<PAGE>
FOREIGN CURRENCY EXCHANGE RATE RISK

    Our reporting currency is the Canadian dollar. We hold financial instruments
primarily denominated in U.S. dollars and Swiss francs. A depreciation of such
currencies against the Canadian dollar will decrease the fair value and an
appreciation of such currencies against the Canadian dollar will increase the
fair value of such financial instruments. Our financial instruments which may be
sensitive to foreign currency exchange rate fluctuations are investments, loans,
deposits and debt obligations. The following tables provide information about
our exposure to foreign currency exchange rate fluctuations for the carrying
amount of financial instruments that may be sensitive to such fluctuations as at
December 31, 1999 and 1998, respectively, and expected cash flows from these
instruments:

                            AS AT DECEMBER 31, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       2000       2001       2002       2003       2004     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $59,548    $61,493    $53,035    $    --    $    --    $    --    $ 3,612      $ 4,846
Loans(2)................   75,030     75,030     59,654         --      7,077      8,299         --           --
Deposits(3).............   47,563     47,563     47,563         --         --         --         --           --
Debt obligations(4).....   30,917     26,828      3,446         --         --      7,026         --       16,356
</TABLE>

------------

(1) Investments consist of debt securities and equity securities, both of which
    are primarily denominated in U.S. dollars and Swiss francs.

(2) Loans are denominated in U.S. dollars or Swiss francs.

(3) Deposits consist of cash deposits with MFC Bank.

(4) Debt obligations consist of the bonds and other debt, all of which are
    denominated in U.S. dollars.

                            AS AT DECEMBER 31, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       1999       2000       2001       2002       2003     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $68,350    $67,737    $48,389    $   957    $    --    $    --    $ 8,099      $10,292
Loans(2)................   49,526     49,526     40,726         --         --         --      8,800           --
Deposits(3).............   25,124     25,124     19,759      5,365         --         --         --           --
Debt obligations(4).....   40,091     37,807      2,533         --         --         --     14,724       20,550
</TABLE>

------------

(1) Investments consist of debt securities and equity securities, both of which
    are primarily denominated in U.S. dollars and Swiss francs.

(2) Loans are denominated in U.S. dollars or Swiss francs.

(3) Deposits consist of cash deposits with MFC Bank.

(4) Debt obligations consist of the bonds and other debt, all of which are
    denominated in U.S. dollars.

EQUITY PRICE RISK

    Changes in trading prices of equity securities may affect the fair value of
equity securities or the fair value of other securities convertible into equity
securities. An increase in trading prices will increase the fair value and a
decrease in trading prices will decrease the fair value of equity securities or
instruments convertible into equity securities. Our financial instruments which
may be sensitive to fluctuations in equity prices are investments and debt
obligations. The following tables provide information about our exposure to
fluctuations in equity prices for

                                       19
<PAGE>
the carrying amount of financial instruments sensitive to such fluctuations as
at December 31, 1999 and 1998, respectively, and expected cash flows from these
instruments:

                            AS AT DECEMBER 31, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       2000       2001       2002       2003       2004     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $37,843    $38,614    $31,748    $    --    $    --    $    --    $    --      $ 6,866
Debt obligations(2).....   20,445     16,356         --         --         --         --         --       16,356
</TABLE>

------------

(1) Investments consist of equity securities.

(2) Debt obligations consist of the bonds which are convertible into common
    shares of MFC at a fixed price. A change in the price of our common shares
    may affect the fair value of the bonds.

                            AS AT DECEMBER 31, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    EXPECTED FUTURE CASH FLOW
                          CARRYING     FAIR     -----------------------------------------------------------------
                           VALUE      VALUE       1999       2000       2001       2002       2003     THEREAFTER
                          --------   --------   --------   --------   --------   --------   --------   ----------
<S>                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Investments(1)..........  $32,061    $31,790    $25,143    $    --    $    --    $    --    $    --      $ 6,647
Debt obligations(2).....   22,834     20,550         --         --         --         --         --       20,550
</TABLE>

---------------

(1) Investments consist of equity securities.

(2) Debt obligations consist of the bonds which are convertible into common
    shares of MFC at a fixed price. A change in the price of our common shares
    may affect the fair value of the bonds.

ITEM 10.  DIRECTORS AND OFFICERS OF REGISTRANT

    Our Articles provide for three classes of directors with staggered terms.
Each director holds office until the expiry of his term or until his successor
is elected or appointed, unless his office is earlier vacated in accordance with
our Bylaws or with the provisions of the BUSINESS CORPORATIONS ACT (Yukon). At
each annual meeting of MFC, a class of directors is elected to hold office for a
three year term. Successors to the class of directors whose terms expire are
identified as being of the same class as the directors they succeed and are
elected to hold office for a term expiring at the third succeeding annual
meeting of shareholders. A director appointed or elected to fill a vacancy on
the board of directors holds office for the unexpired term of his predecessor.
Officers of MFC serve at the discretion of the board of directors.

    The following table sets out certain information concerning MFC's directors
and executive officers:

<TABLE>
<CAPTION>
                                                                                 DATE OF       EXPIRATION OF
                                                                               COMMENCEMENT       TERM OF
                                                                              OF OFFICE WITH    OFFICE WITH
NAME                                               PRESENT POSITION WITH MFC       MFC              MFC
----                                               -------------------------  --------------   -------------
<S>                                                <C>                        <C>              <C>
Michael J. Smith.................................  Director and                    1986            2002
                                                   President                       1996
Roy Zanatta......................................  Director and                    1996            2002
                                                   Secretary                       1996
Sok Chu Kim......................................  Director                        1996            2001
Oq-Hyun Chin.....................................  Director                        1994            2001
Julius Mallin....................................  Director                        1994            2000
Dr. Stefan Feuerstein............................  Nominee Director(1)               --              --
</TABLE>

---------------

(1) Dr. Feuerstein is nominated to be elected as a director at MFC's
    shareholders' meeting to be held June 28, 2000.

                                       20
<PAGE>
ITEM 11.  COMPENSATION OF DIRECTORS AND OFFICERS

    During the fiscal year ended December 31, 1999, we paid an aggregate of
$1,506,302 in cash compensation to our directors and officers. This amount does
not take into account incentive stock options granted to or exercised by such
directors and officers or other non-cash compensation, as more particularly
described below. No other funds were set aside or accrued by MFC during the
fiscal year ended December 31, 1999 to provide pension, retirement or similar
benefits for our directors or officers pursuant to any existing plan provided or
contributed to by MFC.

    We are required, under applicable securities legislation in Canada, to
disclose to our shareholders details of compensation paid to certain executive
officers. The following fairly reflects material information regarding
compensation paid to such persons.

EXECUTIVE COMPENSATION

    The following table provides a summary of compensation paid by us during
each of the last three fiscal years to our Chief Executive Officer and to other
executive officers who received a combined salary and bonus during the fiscal
year ended December 31, 1999 in excess of $100,000 (the "Named Executives"):

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                     LONG-TERM
                                                   ANNUAL COMPENSATION(1)           COMPENSATION
                                             ----------------------------------   ----------------
                                                                                       AWARDS
                                                                                  SECURITIES UNDER
                              FISCAL YEAR                          OTHER ANNUAL       OPTIONS         ALL OTHER
                                 ENDED        SALARY     BONUS     COMPENSATION       GRANTED        COMPENSATION
NAME AND PRINCIPAL POSITION  DECEMBER 31,      ($)        ($)          ($)              (#)              ($)
-----------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>        <C>        <C>            <C>                <C>
Michael J. Smith                  1999       212,944    256,809           --               --               --
President and Chief               1998       221,876    231,365           --           77,000               --
Executive Officer                 1997       157,814         --           --               --               --
-----------------------------------------------------------------------------------------------------------------
Roy Zanatta                       1999       104,852    119,844           --               --               --
Secretary and Director            1998       192,500    101,222           --           60,000               --
                                  1997       137,900         --           --           65,000            5,000
-----------------------------------------------------------------------------------------------------------------
Claudio Morandi(2)                1999       179,171    154,085       10,102               --               --
President                         1998       117,010    101,222           --           75,000               --
MFC Bank                          1997       157,732     67,871           --           65,000               --
-----------------------------------------------------------------------------------------------------------------
John Musacchio                    1999       283,833         --           --               --               --
Vice-President                    1998            --         --           --           50,000               --
                                  1997            --         --           --               --               --
-----------------------------------------------------------------------------------------------------------------
Jean Paul Abgottspon(3)           1999       165,800     18,862           --               --               --
Senior Vice-President             1998       171,828         --           --            8,000               --
MFC Bank                          1997            --         --           --               --               --
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) On a cash basis, unless otherwise stated.

(2) Mr. Morandi commenced employment with MFC in May 1997. His compensation for
    fiscal 1997 is presented on an annualized basis.

(3) Mr. Abgottspon commenced employment with MFC in June 1998. His compensation
    for fiscal 1998 is presented on an annualized basis.

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL

    Mr. Smith entered into an employment agreement with MFC dated as of July 1,
1994. The agreement generally provides, subject to certain termination
provisions, for the continued employment of Mr. Smith for a period of 36 months
with automatic one month renewals, so that the agreement at all times has a
remaining term of 36 months. The agreement provides for an annual base salary
and other compensation to be paid to Mr. Smith as determined by the board of
directors. The agreement contains change in control provisions

                                       21
<PAGE>
pursuant to which, if a change in control (as defined in the agreement) occurs,
Mr. Smith may only be discharged for cause. In the event he is terminated
without cause or resigns for good reason (as defined in the agreement) within
18 months of the change in control, Mr. Smith shall be entitled to a severance
payment of three times his annual salary under the agreement and all unvested
rights in any stock option or other benefit plan applicable to him shall vest in
full. If Mr. Smith is terminated without cause or resigns for good reason after
18 months of the change in control, he shall be entitled to a severance payment
of a proportionate amount based on the length of time remaining in the term of
the agreement of three times his annual salary under the agreement and all
unvested rights in any stock option or other benefit plan applicable to him
shall vest in full. In addition, Mr. Smith will continue to receive equivalent
benefits as were provided at the date of termination for the remaining term of
the agreement.

    Mr. Zanatta entered into an employment agreement with MFC on February 24,
1997. The agreement generally provides for a base salary and other compensation,
including the granting of incentive stock options, to be paid to Mr. Zanatta as
determined by the board of directors. The agreement provides that Mr. Zanatta's
employment with MFC may be terminated upon 12 months notice.

ITEM 12.  OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

    As at the date hereof, MFC has outstanding incentive stock options entitling
the Chief Executive Officer and other Named Executives to acquire an aggregate
of 855,000 common shares of MFC at an exercise price of: (i) U.S.$6.90 per share
in respect of options to purchase 450,000 shares expiring October 11, 2001 and
U.S.$6.00 per share in respect of options to purchase 77,000 shares expiring
October 28, 2003, held by the Chief Executive Officer; and (ii) U.S.$7.25 per
share in respect of options to purchase 110,000 shares expiring July 25, 2002,
U.S.$6.00 per share in respect of options to purchase 193,000 shares expiring
October 28, 2003 and U.S.$7.00 per share in respect of options to purchase
25,000 shares expiring April 11, 2005, held by the other Named Executives.

OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR

    MFC did not grant incentive stock options to the Named Executives during the
fiscal year ended December 31, 1999.

AGGREGATED OPTIONS/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL
YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES

    The following table sets forth securities acquired on exercise during the
most recently completed fiscal year and the value of the options held at
December 31, 1999 by the Named Executives:

<TABLE>
<CAPTION>
                                                                                          VALUE OF UNEXERCISED
                                                                                         IN-THE-MONEY OPTIONS AT
                                   SECURITIES    AGGREGATE    UNEXERCISED OPTIONS AT        DECEMBER 31, 1999
                                   ACQUIRED ON     VALUE         DECEMBER 31, 1999                 ($)
                                    EXERCISE     REALIZED               (#)                   EXERCISABLE/
NAME                                   (#)          ($)      EXERCISABLE/UNEXERCISABLE      UNEXERCISABLE(1)
----------------------------------------------------------------------------------------------------------------
<S>                                <C>           <C>         <C>                         <C>
Michael J. Smith                       Nil          Nil             527,000/Nil            U.S.$1,110,125/Nil
----------------------------------------------------------------------------------------------------------------
Roy Zanatta                            Nil          Nil             125,000/Nil              U.S.$278,125/Nil
----------------------------------------------------------------------------------------------------------------
Claudio Morandi                        Nil          Nil             120,000/Nil              U.S.$288,750/Nil
----------------------------------------------------------------------------------------------------------------
John Musacchio                         Nil          Nil              50,000/Nil              U.S.$143,750/Nil
----------------------------------------------------------------------------------------------------------------
Jean Paul Abgottspon                   Nil          Nil               8,000/Nil               U.S.$23,000/Nil
----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The closing price of our common shares on December 31, 1999 on Nasdaq was
    U.S.$8.875.

ITEM 13.  INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

    Other than as disclosed in this annual report, to the best of our knowledge,
there have been no material transactions since January 1, 1999 to which MFC was
or is a party and in which a director or officer of MFC, or

                                       22
<PAGE>
any relative or spouse of any director or officer, or any relative of such
spouse who has the same home as such person or who is a director or officer of
any subsidiary of MFC, has or will have a direct or indirect material interest,
nor were any directors or officers of MFC, or any associates of such directors
or officers, indebted to MFC during this period.

                                    PART II

ITEM 14.  DESCRIPTION OF SECURITIES TO BE REGISTERED

    Not applicable.

                                    PART III

ITEM 15.  DEFAULTS UPON SENIOR SECURITIES

    None.

ITEM 16.  CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
          SECURITIES

    None.

                                    PART IV

ITEM 17.  FINANCIAL STATEMENTS

    Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

    See "ITEM 19. Financial Statements and Exhibits" for financial statements
filed as part of this annual report.

ITEM 19.  FINANCIAL STATEMENTS AND EXHIBITS

    (A) FINANCIAL STATEMENTS AND SCHEDULES:

    1.  Independent Auditors' Report on the consolidated financial statements of
       MFC as at December 31, 1999, 1998 and 1997.

    2.  Consolidated Balance Sheets at December 31, 1999 and 1998 (audited).

    3.  Consolidated Statements of Income for the years ended December 31, 1999,
       1998 and 1997 (audited).

    4.  Consolidated Statements of Changes in Shareholders' Equity for the years
       ended December 31, 1999, 1998 and 1997 (audited).

    5.  Consolidated Statements of Cash Flows for the years ended December 31,
       1999, 1998 and 1997 (audited).

    6.  Notes to Financial Statements.

    7.  Independent Auditors' Report on Financial Statement Schedules.

    8.  Financial Statement Schedules:

       I   Condensed Financial Information of Registrant.

       III Supplementary Insurance Information.

       IV Reinsurance.

       VI Supplemental Information Concerning Property--Casualty Insurance
           Operations.

                                       23
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Shareholders
MFC Bancorp Ltd.

    We have audited the consolidated balance sheets of MFC Bancorp Ltd. and
Subsidiaries as at December 31, 1999 and 1998, and the consolidated statements
of income, changes in shareholders' equity and cash flows for the years ended
December 31, 1999, 1998 and 1997. 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 generally accepted auditing
standards. Those standards require that we plan and perform an 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.

    In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31,
1999 and 1998, and the results of its operations and its cash flows for the
years ended December 31, 1999, 1998 and 1997, in accordance with Canadian
generally accepted accounting principles, which differ from United States
generally accepted accounting principles as described in Note 17 to the
consolidated financial statements.

/s/ PETERSON SULLIVAN P.L.L.C.

April 14, 2000
Seattle, Washington

                                       24
<PAGE>
                       MFC BANCORP LTD. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1999 AND 1998

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 U.S. DOLLARS        CANADIAN DOLLARS
                                                              (INFORMATION ONLY)    -------------------
                                                                     1999             1999       1998
                                                              -------------------   --------   --------
<S>                                                           <C>                   <C>        <C>
                                           ASSETS

Cash and cash equivalents...................................       $ 34,343         $ 49,567   $ 38,871
Securities..................................................         46,981           67,808     76,998
Loans.......................................................         56,626           81,728     55,059
Receivables.................................................         16,344           23,589     24,488
Due from investment dealers.................................         11,783           17,007      8,473
Property held for sale......................................          5,432            7,840      5,639
Excess cost of net assets acquired..........................         12,368           17,851     18,516
Premises and equipment......................................            980            1,415      3,031
Prepaid and other...........................................          2,288            3,302      7,034
                                                                   --------         --------   --------
                                                                   $187,145         $270,107   $238,109
                                                                   ========         ========   ========

                            LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits....................................................       $ 32,954         $ 47,563   $ 25,124
Accounts payable and accrued expenses.......................         12,370           17,854     16,086
Debt........................................................         21,421           30,917     40,091
                                                                   --------         --------   --------
  Total liabilities.........................................         66,745           96,334     81,301
Minority interests..........................................          2,052            2,962      2,412
Shareholders' equity
  Common stock, without par value;
    authorized unlimited number; 12,041,156
    and 12,056,623 issued and outstanding
    at December 31, 1999 and 1998, respectively.............         45,381           65,498     65,706
  Cumulative translation adjustment.........................         (2,973)          (4,291)    10,475
  Retained earnings.........................................         75,940          109,604     78,215
                                                                   --------         --------   --------
                                                                    118,348          170,811    154,396
                                                                   --------         --------   --------
                                                                   $187,145         $270,107   $238,109
                                                                   ========         ========   ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       25
<PAGE>
                       MFC BANCORP LTD. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                   (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

<TABLE>
<CAPTION>
                                                         U.S. DOLLARS              CANADIAN DOLLARS
                                                      (INFORMATION ONLY)    ------------------------------
                                                             1999             1999       1998       1997
                                                      -------------------   --------   --------   --------
<S>                                                   <C>                   <C>        <C>        <C>
Financial services revenue..........................        $84,490         $125,526   $123,310   $86,060
Expenses
  Financial services................................         43,927           65,262     68,650    43,658
  General and administrative........................         12,994           19,305     19,361    12,368
  Interest expense..................................          3,276            4,867      4,771     5,140
                                                            -------         --------   --------   -------
                                                             60,197           89,434     92,782    61,166
                                                            -------         --------   --------   -------
Income from continuing operations before income
  taxes.............................................         24,293           36,092     30,528    24,894
Recovery of (provision for) income taxes............            684            1,016       (622)   (1,195)
                                                            -------         --------   --------   -------
                                                             24,977           37,108     29,906    23,699
Minority interests..................................           (525)            (780)       329       (82)
                                                            -------         --------   --------   -------
Income from continuing operations...................         24,452           36,328     30,235    23,617

Discontinued operations
  Loss from operations of discontinued
    internet banking................................         (2,850)          (4,234)        --        --
  Loss from disposal of internet banking
    operations......................................           (474)            (705)        --        --
                                                            -------         --------   --------   -------
  Loss from discontinued operations.................         (3,324)          (4,939)        --        --
                                                            -------         --------   --------   -------
      Net income....................................        $21,128         $ 31,389   $ 30,235   $23,617
                                                            =======         ========   ========   =======
Earnings per share
  Basic
    Income from continuing operations...............        $  2.03         $   3.00   $   2.48   $  1.95
    Loss from discontinued operations...............           (.28)            (.41)        --        --
                                                            -------         --------   --------   -------
      Net income....................................        $  1.75         $   2.59   $   2.48   $  1.95
                                                            =======         ========   ========   =======
  Fully diluted
    Income from continuing operations...............        $  1.75         $   2.60   $   2.20   $  1.79
    Loss from discontinued operations...............           (.22)            (.32)        --        --
                                                            -------         --------   --------   -------
      Net income....................................        $  1.53         $   2.28   $   2.20   $  1.79
                                                            =======         ========   ========   =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       26
<PAGE>
                       MFC BANCORP LTD. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                        (CANADIAN DOLLARS, IN THOUSANDS)

<TABLE>
<CAPTION>
                                           CLASS A
                                       PREFERRED STOCK
                                     --------------------
                                           SERIES A             COMMON STOCK
                                     --------------------   ---------------------              CUMULATIVE
                                     NUMBER OF              NUMBER OF               RETAINED   TRANSLATION
                                      SHARES      AMOUNT      SHARES      AMOUNT    EARNINGS   ADJUSTMENT     TOTAL
                                     ---------   --------   ----------   --------   --------   -----------   --------
<S>                                  <C>         <C>        <C>          <C>        <C>        <C>           <C>
Balance at December 31, 1996.......   137,000    $ 12,832   10,418,316   $53,449    $ 25,234    $      1     $ 91,516
Net income.........................        --          --           --        --      23,617          --       23,617
Shares issued from conversion of
  preferred shares.................  (137,000)    (12,832)   1,522,222    12,832          --          --           --
Shares issued for exercise of
  stock options....................        --          --       10,000       104          --          --          104
Shares issued for cash.............        --          --      372,712     3,983          --          --        3,983
Dividends paid on preferred
  shares...........................        --          --           --        --        (396)         --         (396)
Dividends paid on common shares....        --          --           --        --        (106)         --         (106)
Translation adjustment.............        --          --           --        --          --       1,438        1,438
                                     --------    --------   ----------   -------    --------    --------     --------
Balance at December 31, 1997.......        --          --   12,323,250    70,368      48,349       1,439      120,156
Net income.........................        --          --           --        --      30,235          --       30,235
Shares issued for conversion of
  bonds............................        --          --        1,946        40          --          --           40
Shares issued for exercise of
  stock options....................        --          --      218,500     2,275          --          --        2,275
Shares issued for cash.............        --          --       12,927       129          --          --          129
Repurchase of shares...............        --          --     (500,000)   (7,106)         --          --       (7,106)
Dividends paid on common shares....        --          --           --        --        (369)         --         (369)
Translation adjustment.............        --          --           --        --          --       9,036        9,036
                                     --------    --------   ----------   -------    --------    --------     --------
Balance at December 31, 1998.......        --          --   12,056,623    65,706      78,215      10,475      154,396
Net income.........................        --          --           --        --      31,389          --       31,389
Shares issued for exercise of
  stock options....................        --          --        8,000        70          --          --           70
Shares issued for cash.............        --          --        2,533        26          --          --           26
Repurchase of shares...............        --          --      (26,000)     (304)         --          --         (304)
Translation adjustment.............        --          --           --        --          --     (14,766)     (14,766)
                                     --------    --------   ----------   -------    --------    --------     --------
Balance at December 31, 1999.......        --    $     --   12,041,156   $65,498    $109,604    $ (4,291)    $170,811
                                     ========    ========   ==========   =======    ========    ========     ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       27
<PAGE>
                       MFC BANCORP LTD. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                        (CANADIAN DOLLARS, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash flows from continuing operating activities
  Income from continuing operations.........................  $ 36,328   $ 30,235   $ 23,617
  Adjustments for:
    Depreciation and amortization...........................     2,361      1,906      1,776
    Provision (recovery) for credit losses..................      (553)    (1,527)     1,087
    Fee income received in common shares of an affiliate....    (3,169)        --         --
    Gain on debt............................................        --     (8,113)    (2,922)
    Change in operating assets and liabilities
      Due from investment dealers...........................   (11,052)    (7,805)        --
      Securities............................................     6,730      2,096     17,067
      Receivables...........................................     1,668     (4,275)    (5,569)
      Properties held for sale..............................        28      1,124      2,135
      Accounts payable and accrued expenses.................      (951)   (14,052)   (57,508)
      Other.................................................    (1,449)      (541)    (1,066)
                                                              --------   --------   --------
Cash flows from continuing operating activities.............    29,941       (952)   (21,383)
Cash flows from investing activities of continuing
  operations
  Net decrease (increase) in loans..........................   (34,659)      (169)    32,426
  Purchases of subsidiaries, net of cash acquired...........      (738)      (742)    41,522
  Other.....................................................      (331)      (702)       544
                                                              --------   --------   --------
Cash flows from investing activities of continuing
  operations................................................   (35,728)    (1,613)    74,492
Cash flows from financing activities of continuing
  operations
  Net increase (decrease) in deposits.......................    34,332    (10,123)   (31,209)
  Debt repayments...........................................    (8,199)    (5,064)   (12,835)
  Borrowings................................................       969     15,415     10,845
  Issuance (repurchase) of common shares, net...............      (208)    (4,703)     4,090
  Dividends paid............................................        --       (369)      (502)
  Other.....................................................       (66)       (41)        --
                                                              --------   --------   --------
Cash flows from financing activities of continuing
  operations................................................    26,828     (4,885)   (29,611)
Exchange rate effect on cash and cash equivalents...........    (7,064)     4,099      1,161
                                                              --------   --------   --------
Increase (decrease) in cash and cash equivalents from
  continuing operations.....................................    13,977     (3,351)    24,659
Net cash used in discontinued operations....................    (3,281)        --         --
                                                              --------   --------   --------
Increase (decrease) in cash and cash equivalents............    10,696     (3,351)    24,659
Cash and cash equivalents, beginning of year................    38,871     42,222     17,563
                                                              --------   --------   --------
Cash and cash equivalents, end of year......................  $ 49,567   $ 38,871   $ 42,222
                                                              ========   ========   ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       28
<PAGE>
                       MFC BANCORP LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements and accompanying notes have been prepared
in conformity with generally accepted accounting principles applicable in
Canada. The notes are stated in Canadian dollars, as rounded to the nearest
thousand (except per share amounts).

NATURE OF OPERATIONS

The Company is in the financial services industry which includes banking,
merchant banking and proprietary investing. These activities are managed as a
unit.

During the first quarter of 2000, the Company decided to discontinue its
internet banking operations. This activity allowed customers to use the internet
to initiate transactions at the Company's banking subsidiary. Since this
operation began during 1999, restatement of prior years' operations was not
necessary.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions of
continuing operations have been eliminated.

The excess cost of net assets acquired over fair value is amortized on the
straight-line method over the estimated benefit period of 15 to 40 years unless
a writedown is required to reflect an other than temporary decline in value.
However, no writedowns of excess cost have been deemed necessary on any of the
Company's acquisitions based on management's review of the related businesses,
taking into account associated risks.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include highly liquid investments with original
maturities of three months or less and are generally interest bearing. These
assets are recorded at cost which approximates market. The Company regularly
maintains cash balances in other financial institutions in excess of insured
limits. Interest paid on a cash basis was $5,449, $3,433 and $5,732 for the
years ended December 31, 1999, 1998 and 1997, respectively. Income tax amounts
paid were $27, $377 and $783 during 1999, 1998 and 1997, respectively.

SECURITIES

Trading account securities, held by the Company's banking subsidiary, are stated
at current market value with the unrealized gain or loss included in the results
of operations. Short-term securities held by non-bank subsidiaries are carried
at the lower of aggregate cost or estimated current market value.

Long-term investment securities held by non-bank subsidiaries are purchased with
the original intention to hold the securities to maturity or until market
conditions render alternative investments more attractive. Equity securities are
stated at cost and debt securities at amortized cost unless there has been an
other than temporary decline in value, at which time the security is written
down and the unrealized loss is included in the results of operations.

Realized gains or losses on sales of securities are determined based on the
specific cost basis.

LOANS

Loans are stated net of allowances for credit losses, accrued interest,
reimbursable expenses and unamortized loan fees.

Loans are classified as impaired when there is no longer reasonable assurance of
the timely collection of principal and interest. Whenever a contractual payment
is 90 days past due, loans are automatically classified as impaired unless they
are fully secured and in the process of collection. When a loan is deemed
impaired, its

                                       29
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
carrying amount is reduced to its estimated realizable amount, measured by
discounting the expected future cash flows at the effective interest rate in the
loan or, as a practical expedient, based on a loan's observable market price or
the fair value of collateral if the loan is collateral dependent. In subsequent
periods, any increase in the carrying value of the loan is credited to the
provision for credit losses. Impaired loans are returned to performing status
when there is no longer reasonable doubt regarding timely collection of
principal and interest, all amounts in arrears including interest have been
collected, and all charges for loan impairment have been reversed. Where a
portion of a loan is written off and the remaining balance is restructured, the
new loan is carried on the accrual basis when there is no longer any reasonable
doubt regarding collectibility of principal and interest, and payments are not
90 days past due. Collateral is obtained for loans (and other receivables) if,
based on an evaluation of credit-worthiness, it is considered necessary for the
overall borrowing facility.

Assets acquired in satisfaction of loans are recorded at the lesser of their
fair value at the date of transfer or the carrying value of the loan. Any excess
of the carrying value of the loan over the fair value of the assets acquired is
written off. Operating results and gains and losses on disposal of such assets
are treated as write-offs and recoveries.

Interest income from loans is recognized when earned using the interest method
unless the loan is classified as impaired at which time recognition of interest
income ceases. Interest on impaired loans is credited to the carrying value of
the loan when received. Fees relating to lending activities, net of related
expenses, are deferred and recognized over the term of the loan using the
interest method.

ALLOWANCE FOR CREDIT LOSSES

The Company's allowance for credit losses is maintained at an amount considered
adequate to absorb estimated credit-related losses. The allowance reflects
management's best estimate of the losses in the Company's credit portfolio and
judgments about economic conditions. These estimates and judgments could change
in the near-term, and could result in a significant change to the allowance
currently recognized. Credit losses arise primarily from loans but may also
relate to other credit instruments such as guarantees and letters of credit. The
allowance for credit losses is increased by provisions which are charged to
income and reduced by write-offs net of any recoveries.

Specific provisions are established on a loan-by-loan basis. A general provision
may be established to absorb potential credit losses attributable to the
deterioration of credit quality on aggregate exposures for which specific
provisions cannot yet be determined. A country risk provision may be made based
on exposures in less developed countries and on management's overall assessment
of the underlying economic conditions in those countries. Write-offs are
generally recorded after all reasonable restructuring or collection activities
have taken place and there is no realistic prospect of recovery.

Specific non-bank loans amounting to $1,919 were considered impaired at
December 31, 1998, and were fully reserved. This was the only reserve for credit
losses at December 31, 1998. During 1999, the Company wrote these loans off. No
other loans were considered impaired at December 31, 1999, and the Company did
not consider it necessary to reserve for any specific loans, country risks or
general risks.

DERIVATIVES

During 1999, the Company's banking subsidiary located in Switzerland used
forward exchange contracts to hedge contractual U.S. and Canadian revenues or
expenses. Realized gains or losses are deferred and amortized to income over the
life of the hedged assets or liabilities. The banking subsidiary held three
contracts at December 31, 1999, in a notational amount of $8,721. Fair value
approximated replacement value at December 31, 1999. In 1998, the banking
subsidiary held no forward exchange contracts in its own account. None of the
other consolidated entities hold derivatives.

                                       30
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY HELD FOR SALE

Property held for sale consists of real estate which is stated at the lower of
cost or net realizable value as determined by management based on current market
conditions in the same geographic region.

PREMISES AND EQUIPMENT

Premises and equipment used in the Company's operations are stated at cost.
Depreciation is recorded on the straight-line basis over the estimated useful
lives of the assets.

FOREIGN CURRENCY TRANSLATION

The Company translates foreign assets and liabilities of its self-sustaining
foreign subsidiaries at the rate of exchange at the balance sheet date. Revenues
and expenses have been translated at the average rate of exchange throughout the
year. Unrealized gains or losses from these conversions are included in the
equity section of the balance sheet. Realized gains or losses have been included
in general and administrative expenses in the statements of income. The
translation adjustments did not recognize the effect of income tax because the
Company expects to reinvest the amounts indefinitely.

TAXES ON INCOME

Deferred income taxes are provided on transactions recognized in different
periods for financial reporting and income tax purposes.

STOCK BASED COMPENSATION

The Company follows the intrinsic value based method of accounting for
compensation resulting from the granting of stock options. No compensation
expense has been recognized for the granting of options because the exercise
price of the options approximates the market price for the common shares at the
grant date.

EARNINGS PER COMMON SHARE

Basic earnings per common share is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
in the period. Fully diluted earnings per common share takes into consideration
common shares outstanding (computed under basic earnings per share) and
potentially dilutive common shares.

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

NEW ACCOUNTING STANDARD

During 1997, the Canadian Institute of Chartered Accountants adopted Accounting
Recommendation Section 3465, "Income Taxes." Section 3465 will require that a
future income tax liability or asset be recognized whenever recovery or
settlement of the carrying amount of an asset or liability would generate future
income tax outflows or reductions. This standard is effective for years
beginning on or after January 1, 2000, and retroactive application is not
required.

                                       31
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2.  DISCONTINUED OPERATION

The discontinued internet banking activity had expenses of $4,251 and net losses
from operations of $4,234, its only period of operation.

All of the net assets of the internet banking activity amounting to $705 were
written off as of December 31, 1999. No additional losses are expected. There is
no income tax effect because of the Company's net operating losses available in
Switzerland.

NOTE 3.  SECURITIES

<TABLE>
<CAPTION>
                                             UNREALIZED GAINS AND LOSSES ON NON-BANK SECURITIES
                       -----------------------------------------------------------------------------------------------
                                            1999                                             1998
                       ----------------------------------------------   ----------------------------------------------
                                    GROSS        GROSS      ESTIMATED                GROSS        GROSS      ESTIMATED
                       CARRYING   UNREALIZED   UNREALIZED    MARKET     CARRYING   UNREALIZED   UNREALIZED    MARKET
                        VALUE       GAINS        LOSSES       VALUE      VALUE       GAINS        LOSSES       VALUE
                       --------   ----------   ----------   ---------   --------   ----------   ----------   ---------
<S>                    <C>        <C>          <C>          <C>         <C>        <C>          <C>          <C>
Short-term securities
  Debt...............  $11,591      $   --       $  174      $11,417    $20,009      $  961       $   --      $20,970
  Preferred shares...    7,232          --          153        7,079      7,213          --           --        7,213
  Common shares......    7,167       3,905           --       11,072     11,654       1,044           --       12,698
  Term deposits......       --          --           --           --        594           1           --          595
                       -------      ------       ------      -------    -------      ------       ------      -------
                        25,990       3,905          327       29,568     39,470       2,006           --       41,476
Long-term investment
  Debt...............    3,317         295           --        3,612      3,201          --          363        2,838
  Preferred shares...    1,671          --           --        1,671      1,671          --           --        1,671
  Common shares......    8,176          --        2,981        5,195      3,455          --        1,315        2,140
                       -------      ------       ------      -------    -------      ------       ------      -------
                        13,164         295        2,981       10,478      8,327          --        1,678        6,649
                       -------      ------       ------      -------    -------      ------       ------      -------
  Total non-bank
    securities.......  $39,154      $4,200       $3,308      $40,046    $47,797      $2,006       $1,678      $48,125
                       =======      ======       ======      =======    =======      ======       ======      =======
</TABLE>

Bank trading securities consisted of debt due principally in one year amounting
to $15,057 and $21,133 and equity securities of $13,597 and $8,068 at
December 31, 1999 and 1998, respectively. The change in carrying value of bank
trading securities amounting to $912, $2,023 and $4,676 for the years ended
December 31, 1999, 1998 and 1997, respectively, was included in the results of
operations. At December 31, 1999 and 1998, bank trading account securities
included common shares of an affiliate which were stated at an estimated value
of $736 and $3,015, respectively (trading market value $4,550 and $16,388 less
management's estimated reduction). During 1999, common shares of this affiliate
which cost $2,540 were sold for $7,487. Included in the sale proceeds was $6,782
from other affiliated entities. At December 31, 1999 and 1998, non-bank
securities included preferred shares in two affiliates stated at cost of $7,403
and $7,527, respectively, because no market exists for the shares. At
December 31, 1999, $1,734 was due from one of these affiliates and at
December 31, 1998, a total of $2,674 was due from both affiliates.

                                       32
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4.  LOANS

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Bank loans, collateralized with traded securities...........  $44,333    $22,506

Non-bank loans, collateralized by traded securities,
  receivables, inventories and other tangible assets (due
  from two companies $23,493 and $21,881 at December 31,
  1999 and 1998, respectively)..............................   37,395     34,472
                                                              -------    -------

                                                               81,728     56,978

Allowance for credit losses.................................       --     (1,919)
                                                              -------    -------

    Total loans.............................................  $81,728    $55,059
                                                              =======    =======
</TABLE>

Loan maturities:

<TABLE>
<CAPTION>
                                                              WITHIN 1 YEAR    1 - 5 YEARS    1999 TOTAL
                                                              -------------   -------------   ----------
<S>                                                           <C>             <C>             <C>
Bank loans..................................................     $44,333         $    --        $44,333
Non-bank loans..............................................      20,927          16,468         37,395
                                                                 -------         -------        -------
                                                                 $65,260         $16,468         81,728
                                                                 =======         =======
Allowance for credit losses.................................                                         --
                                                                                                -------
                                                                                                $81,728
                                                                                                =======
</TABLE>

The non-bank loans generally earn interest at a major U.S. bank's prime rate
which was 8.5% at December 31, 1999, plus two to seven percent. The weighted
daily average prime rate was 8.0% during 1999. Bank loans generally earn
interest ranging from 5.5% to 10.35% as of December 31, 1999.

NOTE 5.  RECEIVABLES AND DUE FROM INVESTMENT DEALERS

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Receivables:
  Short-term advances.......................................  $ 8,362    $ 3,701
  Investment income.........................................    3,741      1,952
  Affiliates................................................    1,744      3,061
  Taxes.....................................................    5,614      3,778
  Note receivable sale......................................       --      4,004
  Pension plan recovery.....................................    1,575      1,575
  Fees......................................................       --      1,871
  Real estate sales.........................................      677      3,142
  Other.....................................................    1,876      1,404
                                                              -------    -------
                                                              $23,589    $24,488
                                                              =======    =======
</TABLE>

The amounts due from investment dealers of $17,007 and $8,473 as of
December 31, 1999 and 1998, respectively have been pledged.

                                       33
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6.  PREMISES AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Land and building...........................................   $   --     $1,165
Computer equipment..........................................    1,747      1,944
Furniture, fixtures and equipment...........................      909      1,809
                                                               ------     ------
                                                                2,656      4,918
Less accumulated depreciation...............................   (1,241)    (1,887)
                                                               ------     ------
                                                               $1,415     $3,031
                                                               ======     ======
</TABLE>

NOTE 7.  DEPOSITS

<TABLE>
<CAPTION>
                                                                          1999
                                                         ---------------------------------------
                                                          PAYABLE ON
                                                            DEMAND
                                                         (NON-INTEREST   PAYABLE ON A                1998
                                                           BEARING)       FIXED DATE     TOTAL      TOTAL
                                                         -------------   ------------   --------   --------
<S>                                                      <C>             <C>            <C>        <C>
Clients................................................     $42,649         $4,364      $47,013    $21,652
Banks..................................................         550             --          550      3,472
                                                            -------         ------      -------    -------
                                                            $43,199         $4,364      $47,563    $25,124
                                                            =======         ======      =======    =======
</TABLE>

NOTE 8.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Accounts payable............................................  $ 9,470    $ 8,036
Interest....................................................    1,286      4,617
Property and other taxes....................................    2,226      1,925
Due securities brokers......................................    4,816        908
Other.......................................................       56        600
                                                              -------    -------
                                                              $17,854    $16,086
                                                              =======    =======
</TABLE>

NOTE 9.  DEBT

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Bonds payable by the Company, interest at 8%, due
  semi-annually in October and
  April, principal due April 2008, unsecured. Convertible
  into common stock of the Company at $19.08 (1,055,333
  common shares reserved at December 31, 1999)..............  $20,445    $22,834
Non-recourse notes payable, interest at 8% payable annually,
  principal
  due May 2003, unsecured...................................    7,026     14,724
Non-recourse notes payable, interest at 15% due monthly,
  principal
  due June 2000, secured by property held for sale..........    3,446      2,533
                                                              -------    -------
                                                              $30,917    $40,091
                                                              =======    =======
</TABLE>

                                       34
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9.  DEBT (CONTINUED)
As of December 31, 1999, the principal maturities of debt are as follows:

<TABLE>
<CAPTION>
MATURITY                                                       AMOUNT
--------                                                      --------
<S>                                                           <C>
2000........................................................  $ 3,446
2003........................................................    7,026
Thereafter..................................................   20,445
                                                              -------
                                                              $30,917
                                                              =======
</TABLE>

Fair value of financial instruments approximates carrying value except for
securities described in Note 3 and bonds payable. The estimated fair value of
these bonds was $16,356 and $20,550 based on market value at December 31, 1999
and 1998, respectively.

NOTE 10.  INCOME TAXES

Income before income taxes, minority interests and discontinued operations
consists of:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Canadian....................................................  $ 7,294    $ 2,495    $ 5,763
Foreign.....................................................   28,798     28,033     19,131
                                                              -------    -------    -------
                                                              $36,092    $30,528    $24,894
                                                              =======    =======    =======
</TABLE>

The recovery of (provision for) income taxes consists of the following:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Current
  Canadian..................................................   $  293     $   7     $  (278)
  Foreign...................................................     (314)     (364)       (227)
Deferred
  Canadian..................................................      204      (265)       (690)
  Foreign...................................................      833        --          --
                                                               ------     -----     -------
                                                               $1,016     $(622)    $(1,195)
                                                               ======     =====     =======
</TABLE>

The timing differences relate primarily to differences in accounting between
income tax and book for the disposal of property held for sale.

                                       35
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10.  INCOME TAXES (CONTINUED)
A reconciliation of the provision for income taxes calculated at applicable
statutory rates in Canada to the provision in the consolidated statements of
income is as follows:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Income before income taxes and minority interests and
  discontinued operations...................................  $ 36,092   $ 30,528   $ 24,894
                                                              ========   ========   ========
Computed provision for income taxes at statutory rates......  $(16,169)  $(13,688)  $(11,162)
(Increase) decrease in taxes resulting from:
  Nontaxable dividend income................................     2,421      2,421      2,421
  Foreign source income.....................................    12,901     12,570      8,578
  Other, net................................................     1,863     (1,925)    (1,032)
                                                              --------   --------   --------
Recovery of (provision for) income taxes....................  $  1,016   $   (622)  $ (1,195)
                                                              ========   ========   ========
</TABLE>

At December 31, 1999, the Company had estimated accumulated noncapital losses
which expire as follows:

<TABLE>
<CAPTION>
YEAR                                                          CANADIAN     U.S.      SWISS
----                                                          --------   --------   --------
<S>                                                           <C>        <C>        <C>
2000........................................................   $  635     $   --    $10,394
2002........................................................    3,098         --         --
2003........................................................    2,353         --      3,994
2004........................................................    1,246         --     11,065
2005........................................................    2,195         --         --
2010-2019...................................................       --      9,980         --
                                                               ------     ------    -------
                                                               $9,527     $9,980    $25,453
                                                               ======     ======    =======
</TABLE>

A portion of the U.S. losses may be limited by U.S. tax law.

                                       36
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11.  EARNINGS PER COMMON SHARE

Earnings per share data for years ended December 31 from continuing operations
is summarized as follows:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Income from continuing operations...........................  $36,328    $30,235    $23,617
Less dividend on the Company's preferred shares held by
  subsidiary's minority shareholders........................     (117)      (119)      (121)
                                                              -------    -------    -------
Basic earnings from continuing operations...................   36,211     30,116     23,496
Effect of dilutive securities:
  Interest on convertible bonds.............................    1,708      1,405          2
  Interest on options.......................................    1,742      1,351      1,002
                                                              -------    -------    -------
Diluted earnings from continuing operations.................  $39,661    $32,872    $24,500
                                                              =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                                             SHARES
                                                              ------------------------------------
                                                                 1999         1998         1997
                                                              ----------   ----------   ----------
<S>                                                           <C>          <C>          <C>
Basic earnings per share, weighted number of shares
  outstanding...............................................  12,058,370   12,169,470   12,044,361
Effect of dilutive securities:
  Convertible bonds.........................................   1,055,333    1,147,970        4,566
  Options...................................................   2,131,589    1,595,829    1,641,760
                                                              ----------   ----------   ----------
                                                              15,245,292   14,913,269   13,690,687
                                                              ==========   ==========   ==========
</TABLE>

NOTE 12.  STOCK BASED COMPENSATION

1996 STOCK OPTION PLAN

During 1996, the Company issued options to employees and directors to acquire
900,000 common shares of stock at $9.41 which vested upon grant and have a
five-year term. The weighted fair value of these options was $1.92. There were
900,000 options outstanding at December 31, 1999, 1998 and 1997, under this
plan. No additional options to acquire shares will be offered under this plan.

1997 AMENDED STOCK OPTION PLAN

The Company has a 1997 stock option plan which enables certain employees and
directors to acquire common shares. Under the plan, options vest on grant and
have a five-year term. The Company is authorized to issue up to 1,737,500 shares
under this plan.

During 1998, options to acquire 750,000 shares at $9.18 were granted to officers
and employees of the Company. At December 31, 1999, 662,000 of these options
were outstanding and have a remaining contractual life of 3.75 years. The
weighted fair value of these options was $2.11.

During 1997, options to acquire 742,500 shares at $11.10 were granted to
officers and employees of the Company. At December 31, 1999, 469,000 of these
options were outstanding and have a remaining contractual life of 2.5 years. The
weighted fair value of these options was $2.59.

                                       37
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12.  STOCK BASED COMPENSATION (CONTINUED)
Following is a summary of the status of the plan:

<TABLE>
<CAPTION>
                                                                             WEIGHTED
                                                               NUMBER        AVERAGE
                                                              OF SHARES   EXERCISE PRICE
                                                              ---------   --------------
<S>                                                           <C>         <C>
Outstanding at January 1, 1997..............................         --       $   --
  Granted...................................................    742,500        10.36
  Forfeited.................................................    (10,000)       10.36
                                                              ---------       ------
Outstanding at December 31, 1997............................    732,500        10.36
  Granted...................................................    750,000         9.26
  Exercised.................................................   (218,500)       10.41
                                                              ---------       ------
Outstanding at December 31, 1998............................  1,264,000         9.96
  Forfeited.................................................   (125,000)       (9.87)
  Exercised.................................................     (8,000)       (8.70)
                                                              ---------       ------
Outstanding at December 31, 1999............................  1,131,000       $ 9.98
                                                              =========       ======
</TABLE>

PROFORMA INFORMATION

Had compensation expense been recognized on the basis of fair value of the
options granted under both plans, proforma net income and per share data would
have been as follows compared to the amounts reported:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net Income
  As reported...............................................  $31,389    $30,235    $23,617
                                                              =======    =======    =======
  Proforma..................................................  $30,605    $28,483    $21,778
                                                              =======    =======    =======
Earnings per share--as reported
  Basic.....................................................  $  2.59    $  2.48    $  1.95
                                                              =======    =======    =======
  Fully diluted.............................................  $  2.28    $  2.20    $  1.79
                                                              =======    =======    =======
Earnings per share--proforma
  Basic.....................................................  $  2.54    $  2.33    $  1.80
                                                              =======    =======    =======
  Fully diluted.............................................  $  2.01    $  2.09    $  1.66
                                                              =======    =======    =======
</TABLE>

The fair value of each option granted was estimated for proforma purposes on the
grant date using the Black-Scholes Model. The assumptions used in calculating
fair value are as follows:

<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
<S>                                                           <C>        <C>
Risk-free interest rate.....................................     6.0%       6.0%
Expected life of the options................................  2 years    2 years
Expected volatility.........................................   57.91%     57.54%
Expected dividend yield.....................................     0.0%       0.0%
</TABLE>

                                       38
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13.  COMMITMENTS AND CONTINGENCIES

LEASES

Future minimum commitments under long-term non-cancelable leases are as follows
for the next five years:

<TABLE>
<CAPTION>
YEAR                                                           AMOUNT
----                                                          --------
<S>                                                           <C>
2000........................................................   $  581
2001........................................................      261
2002........................................................      251
2003........................................................      226
2004........................................................      205
                                                               ------
                                                               $1,524
                                                               ======
</TABLE>

Rent expense was $586, $1,373 and $1,549 for the years ended December 31, 1999,
1998 and 1997, respectively.

GUARANTEES AND LETTERS OF CREDIT

The Bank issues guarantees and letters of credit to meet credit requirements of
its customers. The amounts, which are collateralized, are not included in the
consolidated financial statements. Guarantees amounted to $3,612 and $2,944 at
December 31, 1999 and 1998, respectively.

LITIGATION

The Company and its subsidiaries are subject to litigation in the normal course
of business. Management considers the aggregate liability which may result from
such litigation not material at December 31, 1999.

REGULATIONS

The Company's wholly-owned banking subsidiary is located in Geneva, Switzerland
and has no branches or subsidiaries. This subsidiary is subject to the rules and
regulations of the Swiss Federal Banking Commission. These regulations require
legal reserves of equity capital amounting to $4,931 to be maintained as of
December 31, 1999.

NEW EUROPEAN CURRENCY

In certain European countries, a new currency unit called the "euro" was
introduced in January 1999. The Company's bank subsidiary is located in
Switzerland which is not converting to the euro. However, many of the bank's
transactions as well as those of the Company are stated in the euro. Based on
experience with euro transactions to date, management believes that the euro
conversion will not have a material effect on operations.

NOTE 14.  INTEREST RATE SENSITIVITY POSITION

Management has analyzed the bank subsidiary's interest rate sensitivity position
at December 31, 1999. Because of the current nature (over 90% of assets and
liabilities and off-balance sheet positions are due within three months) of the
bank subsidiary's position, the total interest rate gap is not significant at
December 31, 1999, assuming no interest rate hedging is undertaken over the next
twelve months.

                                       39
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 15.  SEGMENTED INFORMATION

The following table presents revenues attributed to Canada, the Company's
country of domicile, and other geographic areas based upon the customer's
location:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Canada......................................................  $ 17,851   $ 31,392   $29,043
Switzerland.................................................    88,075     88,237    30,925
United States...............................................    19,600      3,681    26,092
                                                              --------   --------   -------
                                                              $125,526   $123,310   $86,060
                                                              ========   ========   =======
</TABLE>

The following table presents premises and equipment and excess cost of net
assets acquired over fair value by geographic region based upon the location of
the assets or acquisition:

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Canada......................................................  $   836    $   822    $   823
Switzerland.................................................   12,018     13,934     13,252
United States...............................................    6,412      6,791      9,034
                                                              -------    -------    -------
                                                              $19,266    $21,547    $23,109
                                                              =======    =======    =======
</TABLE>

NOTE 16.  TRANSACTIONS WITH AFFILIATES

Revenue for 1998 includes $2,967 from an entity where the Company's president is
a board member. The amount due from this entity was $7,077 and $3,268 at
December 31, 1999 and 1998, respectively.

The Company is the lessee of an iron ore mine located in Canada. Neither the
Company nor any of its affiliates operate the mine. Instead, the mine is
operated by an independent party who pays royalties based on the amount of ore
it extracts from the mine. The royalties are paid to a 19% owned affiliate which
acquired the rights to the royalties during a prior year in exchange for
preferred shares which provide for a variable annual dividend rate. The amount
of preferred dividends earned amounted to $5,400 each for 1999, 1998 and 1997,
respectively. During 1998, the Company earned management fees of $2,328 from the
affiliate.

                                       40
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 17.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The Company's consolidated financial statements have been prepared in accordance
with generally accepted accounting principles (GAAP) in Canada, which conform in
all material respects with those in the United States (U.S.), except as set
forth below:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                              ------------------------------
RECONCILIATION OF NET INCOME                                    1999       1998       1997
----------------------------                                  --------   --------   --------
<S>                                                           <C>        <C>        <C>
Income from continuing operations in accordance with
  Canadian GAAP.............................................  $36,328    $30,235    $23,617
Consolidation of investee...................................     (510)      (193)    (5,062)
Gain on debt................................................       --     (8,113)    (2,922)
Adjustment of gain on sale of shares in investee............    3,225         --         --
Change in unrealized gain on trading securities, net........    1,270      2,635        555
Deferred income tax provision, net..........................       --       (755)    (6,745)
                                                              -------    -------    -------
Income from continuing operations...........................   40,313     23,809      9,443
Loss from discontinued operations...........................   (4,939)        --         --
                                                              -------    -------    -------
Income before extraordinary item............................   35,374     23,809      9,443
Extraordinary item, gain on extinguishment of debt..........       --      8,113      2,922
                                                              -------    -------    -------
Net income in accordance with U.S. GAAP.....................  $35,374    $31,922    $12,365
                                                              =======    =======    =======
Basic earnings per common share U.S. GAAP
  Income from continuing operations.........................  $  3.33    $  1.95    $  0.81
  Loss from discontinued operations.........................     (.41)        --         --
  Extraordinary item........................................       --        .67        .26
                                                              -------    -------    -------
                                                              $  2.92    $  2.62    $  1.07
                                                              =======    =======    =======
Diluted earnings per common share U.S. GAAP
  Income from continuing operations.........................  $  3.12    $  1.83    $  0.76
  Loss from discontinued operations.........................     (.37)        --         --
  Extraordinary item........................................       --        .59        .24
                                                              -------    -------    -------
                                                              $  2.75    $  2.42    $  1.00
                                                              =======    =======    =======
</TABLE>

Under Canadian GAAP, fully diluted earnings per share is calculated by adjusting
net income available to common shareholders for imputed earnings on funds which
would have been received on the exercise of options. U.S. GAAP requires the use
of the treasury stock method, whereby diluted earnings per share are calculated
as if options were exercised at the beginning of the year and funds received
were used to purchase the company's own stock.

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Retained earnings in accordance with U.S. GAAP..............  $107,841   $72,467    $40,914
                                                              ========   =======    =======
</TABLE>

                                       41
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 17.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net income in accordance with U.S. GAAP.....................  $ 35,374   $31,922    $12,365
Other comprehensive income, net of tax
  Foreign currency translation adjustment...................   (14,766)    9,036      1,438
  Unrealized holding loss on available-for-sale securities
    arising during the period...............................    (1,008)   (1,678)        --
                                                              --------   -------    -------
Other comprehensive income (loss)...........................   (15,774)    7,358      1,438
                                                              --------   -------    -------
Comprehensive income........................................  $ 19,600   $39,280    $13,803
                                                              ========   =======    =======
</TABLE>

The change in accumulated other comprehensive income is as follows:

<TABLE>
<CAPTION>
                                                                       ACCUMULATED OTHER
                                                                     COMPREHENSIVE INCOME
                                                              -----------------------------------
                                                                FOREIGN
                                                               CURRENCY     UNREALIZED
                                                              TRANSLATION    LOSS ON
                                                              ADJUSTMENT    SECURITIES    TOTAL
                                                              -----------   ----------   --------
<S>                                                           <C>           <C>          <C>
Balance at December 31, 1996................................    $      1      $    --    $      1
Change in other comprehensive income........................       1,438           --       1,438
                                                                --------      -------    --------
Balance at December 31, 1997................................       1,439           --       1,439
Change in other comprehensive income........................       9,036       (1,678)      7,358
                                                                --------      -------    --------
Balance at December 31, 1998................................      10,475       (1,678)      8,797
Change in other comprehensive income........................     (14,766)      (1,008)    (15,774)
                                                                --------      -------    --------
Balance at December 31, 1999................................    $ (4,291)     $(2,686)   $ (6,977)
                                                                ========      =======    ========
</TABLE>

CONSOLIDATION

The results of 1999, 1998 and 1997 operations of an entity in which the Company
has a temporary investment are required to be consolidated under U.S. GAAP.
"Consolidation of investee" in the above reconciliation gives effect to this
requirement. In December 1999, the Company disposed of a substantial portion of
this investment which resulted in the Company's ownership being less than 20% at
December 31, 1999.

SECURITIES

U.S. GAAP requires that certain investments be classified into
available-for-sale or trading securities categories and be stated at their fair
values. Any unrealized holding gains or losses are to be reported as a component
of comprehensive income until realized for available-for-sale securities, and
included in earnings for trading securities.

Non-bank securities included trading securities at fair value and are summarized
as follows:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Debt securities.............................................  $11,417    $20,970
Term deposits...............................................       --        595
Preferred shares............................................    7,079      1,358
Common shares...............................................    8,389      9,684
                                                              -------    -------
                                                              $26,885    $32,607
                                                              =======    =======
</TABLE>

                                       42
<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 17.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
The change in unrealized gain in trading securities is included in the income
reconciliation above.

The non-bank available-for-sale securities consist of common shares, preferred
shares and debt securities. At December 31, 1999, securities in five companies
represented 84% of the total available-for-sale securities and 80% was
represented by five companies at December 31, 1998. The proceeds from the sale
of these securities amounted to $1,080, $966, and none, which resulted in
realized gains (losses) of $96, $(738) and none during 1999, 1998 and 1997,
respectively. The cost of these securities was $13,164, $8,327 and $2,254 which
resulted in unrealized gains (losses) in comprehensive income of $(2,686),
$(1,678) and none at December 31, 1999, 1998 and 1997, respectively.

INCOME TAXES

No tax is provided for the extraordinary item because of the utilization of tax
net operating losses. No benefit has been attributed to the loss in discontinued
operations because of the uncertainty in being able to utilize such losses in
Switzerland.

Under U.S. GAAP, the Company would have had no deferred tax asset at
December 31, 1999 or 1998, and $755 at December 31, 1997. The effect of the
change in this asset amount is included in the income reconciliation above.

SUPPLEMENTAL DISCLOSURES WITH RESPECT TO STATEMENTS OF CASH FLOWS

Significant noncash transaction in 1999 included:

-  The Company received collateral in the extinguishment of a receivable in the
    amount $2,490.

Significant noncash transactions in 1998 included:

-  $30,747 in bonds payable of a subsidiary were exchanged for Company bonds
    which resulted in a net gain.

-  A subsidiary of the Company sold one of its subsidiaries at a gain of $648
    resulting from an assumption of liabilities.

Significant noncash transactions in 1997 included:

-  Series A, Class A preferred shares with a value of $12,832 were converted to
    common shares.

-  A subsidiary of the Company converted $2,983 of debt from another subsidiary
    into 217,500 preferred shares.

-  A note receivable for $7,233 was settled with trading securities with the
    same market value.

NEW U.S. ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," is effective for years beginning after
June 15, 1999. This statement requires that entities recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value provided certain conditions are met. The Company has
not determined the effect, if any, this standard may have in the determination
of net income in accordance with U.S. GAAP.

                                       43
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Shareholders
MFC Bancorp Ltd.

    Our report on the consolidated financial statements of MFC Bancorp Ltd. is
included on page 24 of this Form 20-F. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedules listed in Item 19(a)8 of this Form 20-F.

    In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.

/s/ PETERSON SULLIVAN P.L.L.C.

April 14, 2000
Seattle, Washington

                                       44
<PAGE>
                                MFC BANCORP LTD.

           SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             (DOLLARS IN THOUSANDS)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              AS AT DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS
Cash and securities.........................................  $117,375   $115,869
Receivables.................................................    40,596     32,961
Loans and notes receivable..................................    81,728     55,059
Real estate held for resale.................................     7,840      5,639
Excess cost of net assets acquired..........................    17,851     18,516
Other.......................................................     4,717     10,065
                                                              --------   --------
                                                              $270,107   $238,109
                                                              ========   ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits....................................................  $ 47,563   $ 25,124
Accounts payable and accrued expenses.......................    17,853     16,086
Debt........................................................    30,917     40,091
Minority interest...........................................     2,962      2,412
Shareholders' equity........................................   170,812    154,396
                                                              --------   --------
                                                              $270,107   $238,109
                                                              ========   ========
</TABLE>

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Financial services revenue..................................  $125,526   $123,310   $86,060
Expenses
  General and administrative................................    19,305     19,361    12,368
  Financial services........................................    65,262     68,650    43,658
  Interest..................................................     4,867      4,771     5,140
  Income taxes (recovery)...................................    (1,016)       622     1,195
  Minority interest.........................................       780       (329)       82
                                                              --------   --------   -------
                                                                89,198     93,075    62,443
                                                              --------   --------   -------
Income from continuing operations...........................    36,328     30,235    23,617
Loss from discontinued operations...........................    (4,939)        --        --
                                                              --------   --------   -------
Net income..................................................  $ 31,389   $ 30,235   $23,617
                                                              ========   ========   =======
</TABLE>

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net cash (used) provided by operating activities............  $ 26,660   $  (952)   $(21,383)
Net cash (used) provided by financing activities............    26,828    (4,885)    (29,611)
Net cash (used) provided by investing activities............   (35,728)   (1,613)     74,492
Exchange rate effect on cash and cash equivalents...........    (7,064)    4,099       1,161
                                                              --------   -------    --------
Net change in cash..........................................    10,696    (3,351)     24,659
Cash and cash equivalent, beginning of year.................    38,871    42,222      17,563
                                                              --------   -------    --------
Cash and cash equivalent, end of year.......................  $ 49,567   $38,871    $ 42,222
                                                              ========   =======    ========
</TABLE>

                                       45
<PAGE>
                                MFC BANCORP LTD.

               SCHEDULE III: SUPPLEMENTARY INSURANCE INFORMATION
<TABLE>
<CAPTION>
                                        FUTURE POLICY                  OTHER                                BENEFITS,
                           DEFERRED       BENEFITS,                    POLICY                              CLAIMS LOSS
                            POLICY      LOSSES, CLAIMS               CLAIMS AND                  NET           AND
                          ACQUISITION      AND LOSS      UNEARNED     BENEFITS     PREMIUM    INVESTMENT   SETTLEMENT
SEGMENT                      COST          EXPENSES      PREMIUMS     PAYABLE      REVENUE      INCOME      EXPENSES
-------                   -----------   --------------   ---------   ----------   ---------   ----------   -----------
<S>                       <C>           <C>              <C>         <C>          <C>         <C>          <C>
Property and casualty:
December 31, 1999.......       --         $3,021,000         --          --           --      $ 397,000         --
December 31, 1998.......       --         $5,353,000         --          --           --      $ 612,000         --
December 31, 1997.......       --         $8,395,000         --          --           --      $2,351,000        --

<CAPTION>
                          AMORTIZATION
                          OF DEFERRED
                             POLICY        OTHER
                          ACQUISITION    OPERATING   PREMIUMS
SEGMENT                       COST       EXPENSES     WRITTEN
-------                   ------------   ---------   ---------
<S>                       <C>            <C>         <C>
Property and casualty:
December 31, 1999.......       --        $ 40,000        --
December 31, 1998.......       --        $304,000        --
December 31, 1997.......       --        $ 59,000        --
</TABLE>

                                       46
<PAGE>
                                MFC BANCORP LTD.

                            SCHEDULE IV: REINSURANCE

<TABLE>
<CAPTION>
                                                                              ASSUMED               PERCENTAGE
                                                                 CEDED TO      FROM                 OF AMOUNT
                                                       GROSS       OTHER       OTHER       NET       ASSUMED
                                                       AMOUNT    COMPANIES   COMPANIES    AMOUNT      TO NET
                                                      --------   ---------   ---------   --------   ----------
<S>                                                   <C>        <C>         <C>         <C>        <C>
Property and casualty:
December 31, 1999...................................    $ --       $ --        $ --        $ --         N/A
December 31, 1998...................................    $ --       $ --        $ --        $ --         N/A
December 31, 1997...................................    $ --       $ --        $ --        $ --         N/A
</TABLE>

                                       47
<PAGE>
                                MFC BANCORP LTD.

 SCHEDULE VI: SUPPLEMENTAL INFORMATION CONCERNING PROPERTY--CASUALTY INSURANCE
                       OPERATIONS AS AT DECEMBER 31, 1999

THIS SCHEDULE IS OMITTED BECAUSE THE RELEVANT INFORMATION WAS EITHER SHOWN ON
SCHEDULE III OR SCHEDULE IV.

                                       48
<PAGE>
(B) EXHIBITS:

<TABLE>
    <C>    <S>
     3.1   Articles of Incorporation.(1)

     3.2   Certificate of Amendment.(1)

     3.3   Bylaws.(1)

     4.1   Master Trust Indenture between Drummond Financial
           Corporation and Harris Trust Company of New York, as
           trustee, dated August 26, 1993. Incorporated by reference to
           Form S-1 filed June 7, 1993.

     4.2   First Supplemental Indenture between Drummond Financial
           Corporation and Harris Trust Company of New York, as
           trustee, dated November 30, 1993.(1)

     4.3   Second Supplemental Indenture between Drummond Financial
           Corporation and Harris Trust Company of New York, as
           trustee, dated October 23, 1996. Incorporated by reference
           to Drummond Financial Corporation's Form 10-QSB for the
           period ended September 30, 1996.

     4.4   Third Supplemental Indenture between Drummond Financial
           Corporation, Harris Trust Company of New York and The Bank
           of Nova Scotia Trust Company of New York dated for reference
           May 13, 1997.(1)

     4.5   Fourth Supplemental Indenture between Drummond Financial
           Corporation, The Bank of Nova Scotia Trust Company of New
           York and Drummond Financial (B.C.) Ltd. dated for reference
           February 4, 1998.(1)

     4.6   Master Trust Indenture between MFC and Norwest Bank
           Minnesota, National Association, as trustee, dated
           March 31, 1998.(1)

    10.1   Memorandum of Agreement between MFC and Wabush Iron Co.
           Limited, Stelco Inc. and Dofasco Inc. dated November 24,
           1987.(2)

    10.2   Amendment to Mining Lease between MFC and Wabush Iron Co.
           Limited, Stelco Inc. and Dofasco Inc. dated January 1,
           1987.(2)

    10.3   First Amendment to Memorandum of Agreement between MFC and
           Wabush Iron Co. Limited, Stelco Inc. and Dofasco Inc.(2)

    10.4   Assignment Agreement between MFC and Prada Holdings Ltd.
           dated as of January 1, 1992.(1)

    10.5   Employment Agreement dated July 1, 1994 between MFC and
           Michael J. Smith.(1)

    10.6   Separation Agreement between Mercer International Inc. and
           MFC dated for reference March 29, 1996.(1)

    10.7   Amendment Agreement made effective March 19, 1996, between
           MFC and Michael J. Smith.(1)

    10.8   Purchase Agreement between MFC and Volendam Securities C.V.
           dated for reference May 16, 1996.(1)

    10.9   Purchase Agreement between MFC and Volendam Securities C.V.
           dated for reference May 27, 1996.(1)

    10.10  Share Purchase Agreement between MFC and Frederick Wong
           dated June 6, 1996.(1)

    10.11  Subscription Agreement between MFC and Drummond Financial
           Corporation dated June 20, 1996. Incorporated by reference
           to Drummond Financial Corporation's Form 8-K dated
           June 27, 1996.

    10.12  Share Purchase Agreement between MFC and Med Net
           International Ltd. dated June 20, 1996.(3)

    10.13  Share Purchase Agreement among MFC and various shareholders
           of Logan International Corp. dated June 20, 1996.(3)
</TABLE>

                                       49
<PAGE>
<TABLE>
    <C>    <S>
    10.14  Subscription Agreement between Drummond Financial
           Corporation and Logan International Corp. dated June 20,
           1996. Incorporated by reference to Logan International
           Corp.'s Form 8-K dated June 27, 1996.

    10.15  Share Purchase Agreement between Lehman Brothers Bankhaus AG
           and MFC dated October 3, 1996.(1)

    10.16  Purchase Agreement between MFC and Robabond Holding AG dated
           June 27, 1997.(1)

    10.17  Share Purchase Agreement between MFC and Procom Holding AG
           dated September 22, 1997.(1)

    10.18  Supplementary Agreement to Share Purchase Agreement between
           MFC and Procom Holding AG dated September 22, 1997.(1)

    10.19  Agreement between MFC and the holders of MFC's Class A
           Preferred Shares dated December 1, 1996.(1)

    10.20  Subscription Agreement between MFC and Logan International
           Corp. dated December 2, 1996. Incorporated by reference to
           MFC's Schedule 13D/A (Amendment No. 1) dated December 16,
           1996 with respect to Logan International Corp.

    21.    Subsidiaries of MFC.
</TABLE>

---------------

(1) Incorporated by reference to MFC's Form 20-Fs filed in prior years.

(2) Incorporated by reference to MFC's Form 10-K for the year ended
    December 31, 1989.

(3) Incorporated by reference to MFC's Schedule 13D dated June 27, 1996 with
    respect to Logan International Corp.

                                       50
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 12 of the SECURITIES EXCHANGE ACT OF
1934, the Registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.

    Dated at Geneva, Switzerland this 1st day of May, 2000.

<TABLE>
  <S>  <C>
  MFC BANCORP LTD.

  By:  /s/ MICHAEL J. SMITH
       Michael J. Smith
       Chief Executive Officer
</TABLE>

                                       51