SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q

(Mark One)
|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31,2001
                                                         -------------
     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 number     1-14103


                             NB CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)



                 Maryland                            52-2063921
    (State or other jurisdiction of               (I.R.S. Employer
    incorporation or organization)                Identification No.)



125 West, 55th Street, New York, New York                10019
(Address of principal executive offices)               (Zip Code)


                                  212-632-8532
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report)

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 ____

Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court.
Yes ______  No ______


Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

         Class                      Outstanding at May 15, 2001
       Common Stock
       par value $0.01 per share             100

<PAGE>

                             NB CAPITAL CORPORATION

                                      Index
                                      -----

                                                                            Page
                                                                            ----

Part I. FINANCIAL INFORMATION:

         Item 1. Financial Statements

                  Balance Sheets -
                     As of  March 31, 2001 and December 31, 2000              1

                  Statements of Income -
                     For the three-month periods ended
                        March 31, 2001 and 2000                               2

                  Statements of Stockholders' Equity -
                     For the three-month periods ended
                        March 31, 2001 and 2000                               3

                  Statements of Cash Flows -
                     For the three-month periods ended
                        March 31, 2001 and 2000                               4


                 Notes to the financial statements                            5

         Item 2. Management's Discussion and Analysis of
                  Financial Conditions and Results of Operations              8

Part II. OTHER INFORMATION

         Item 6. Exhibit and Reports on Form 8-K                             11

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

This report contains certain forward-looking statements and information relating
to NB Capital Corporation (the "Company" or "NB Capital") that are based on the
beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. When used in this
report, the words "anticipate", "believe", "estimate", "expect" and similar
expressions, as they relate to the Company or the Company's management, are
intended to identify forward-looking statements. Such statements reflect the
current view of the Company's management with respect to future events and the
Company's future performance and are subject to certain risks, uncertainties and
assumptions. Should management's current view of the future or underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or expected. The Company
does not intend to update these forward-looking statements.

References to $ are to United States dollars; references to C$ are to Canadian
dollars. As of March 31, 2001, the Canadian dollar exchange rate was C$1.5763 =
$1.00 and certain amounts stated herein reflect such exchange rate.


<PAGE>


NB CAPITAL CORPORATION
BALANCE  SHEETS
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
 ( in U.S. dollars )                                                2001 (1)            2000
--------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>
Assets
   Cash and cash equivalents                                     $   38,280,563     $  97,133,758
   Due from an affiliated company                                    10,393,091         5,285,479
   Promissory notes                                                 434,844,576       379,543,070
   Accrued interest on cash equivalents                                  12,742            75,850
   -----------------------------------------------------------------------------------------------
                                                                    483,530,972       482,038,157
   ===============================================================================================
Liabilities
   Due to the parent company                                            348,130           302,486
   Accounts payable                                                      31,575            46,979
   Dividend payable                                                           0         1,500,000
   -----------------------------------------------------------------------------------------------
                                                                        379,705         1,849,465
   -----------------------------------------------------------------------------------------------
Stockholders' equity
   Preferred stock, $0.01 par value per share;
           10,000,000 shares authorized,
                  110 Senior preferred shares issued and paid                 1                 1
              300,000 Series A shares issued and paid                     3,000             3,000

   Common stock, $0.01 par value per share;
                1,000 shares authorized,
                  100 shares issued and paid                                  1                 1

   Additional paid-in capital                                       476,761,014       476,761,014

   Retained earnings                                                  6,387,251         3,424,676
   ----------------------------------------------------------------------------------------------
                                                                    483,151,267       480,188,692
   ----------------------------------------------------------------------------------------------


   ----------------------------------------------------------------------------------------------
                                                                    483,530,972       482,038,157
   ==============================================================================================
-------------------------------------------------------------------------------------------------
</TABLE>
(1) Unaudited

See accompanying notes to financial statements.

                                      - 1 -
<PAGE>


NB CAPITAL CORPORATION
STATEMENTS OF INCOME

(Unaudited)
<TABLE>
<CAPTION>
                                                             Three-month periods ended
                                                                     March 31,

 (in U.S. dollars)                                             2001               2000
------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>
Revenue
          Interest income
               Cash equivalents                           $    595,598       $  1,184,638
               Promissory  notes                             9,026,664          7,585,974
------------------------------------------------------------------------------------------------
                                                             9,622,262          8,770,612
------------------------------------------------------------------------------------------------
Expenses
          Servicing and advisory fees                          348,132            283,573
          Legal and other professional fees                     41,267            158,845
------------------------------------------------------------------------------------------------
                                                               389,399            442,418
------------------------------------------------------------------------------------------------
Net income                                                   9,232,863          8,328,194
------------------------------------------------------------------------------------------------
Preferred stock dividends                                    6,270,288          6,270,626
------------------------------------------------------------------------------------------------
Income available to common stockholders                      2,962,575          2,057,568
------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding               100                100
------------------------------------------------------------------------------------------------
Earnings per common share - basic                               29,626             20,576
------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.

                                      - 2 -
<PAGE>


NB CAPITAL CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)
<TABLE>
<CAPTION>
                                                            Three-month periods ended
                                                                     March 31,

( in U.S. dollars )                                          2001                  2000
---------------------------------------------------------------------------------------------
<S>                                                     <C>                  <C>
PREFERRED STOCK
      Balance, beginning and end of period              $        3,001       $         3,001
      ---------------------------------------------------------------------------------------
COMMON STOCK AND PAID-IN CAPITAL
      Balance, beginning and end of period                 476,761,015           476,761,015
      ---------------------------------------------------------------------------------------
RETAINED EARNINGS
      Balance, beginning of period                           3,424,676             3,906,403
      Net income                                             9,232,863             8,328,194
      Preferred stock dividends                             (6,270,288)           (6,270,626)
      ---------------------------------------------------------------------------------------
      Balance, end of period                                 6,387,251             5,963,971
      ---------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                 483,151,267           482,727,987
---------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.

                                      - 3 -

<PAGE>


NB CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS

(Unaudited)
<TABLE>
<CAPTION>
                                                                        Three-month periods ended
                                                                                March 31,

( in U.S. dollars )                                                      2001               2000
----------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>
OPERATING ACTIVITIES
Net income                                                           $  9,232,863       $  8,328,194
       Items not affecting cash resources
             Due from an affiliated company                            (5,107,612)         8,696,720
             Due to the parent company                                     45,644            (44,232)
             Accounts payable                                             (15,404)            30,725
             Accrued interest receivable on cash equivalents               63,108             55,954
----------------------------------------------------------------------------------------------------
Net cash provided by operating activities                               4,218,599         17,067,361
----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
       Dividends                                                        (7,770,288)       (9,270,626)
----------------------------------------------------------------------------------------------------
Net cash used in financing activities                                   (7,770,288)       (9,270,626)
----------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
----------------------------------------------------------------------------------------------------
       Investment in promissory notes                                 (107,179,965)
       Repayments of promissory notes                                   51,878,459        56,100,390
----------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                    (55,301,506)       56,100,390
----------------------------------------------------------------------------------------------------
Cash position, beginning of period                                      97,133,758        58,048,336
----------------------------------------------------------------------------------------------------
Cash position, end of period                                            38,280,563       121,945,461
====================================================================================================

----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.

                                      - 4 -

<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
March 31, 2001
(unaudited)
(in U.S. dollars)

1) Incorporation and nature of operations

     NB Capital Corporation (the "Company") was incorporated in the State of
     Maryland on August 20, 1997. The Company's principal business is to
     acquire, hold, finance and manage mortgage assets. The Company issued,
     through an Offering Circular dated August 22, 1997, $300 million of
     preferred stock and simultaneously, National Bank of Canada, the parent
     company, made a capital contribution in the amount of $183 million. The
     Company used the aggregate net of proceeds of $477 million to acquire
     promissory notes of NB Finance, Ltd., a wholly-owned subsidiary of National
     Bank of Canada.

2) Significant accounting policies

     Financial statements

     The financial statements are prepared in accordance with accounting
     principles generally accepted in the United States of America and are
     expressed in U.S. dollars.

     Income taxes

     The Company has elected to be taxed as a Real Estate Investment Trust
     ("REIT") under the Internal Revenue Code of 1986, as amended, and
     accordingly, is generally not liable for United States federal income tax
     to the extent that it distributes at least 95% of its taxable income to its
     stockholders, maintains its qualification as a REIT and complies with
     certain other requirements.

     Per share data

     Basic earnings per share with respect to the Company for the three-month
     periods ended March 31, 2001 and 2000 are computed based upon the weighted
     average number of common shares outstanding during the period.

     Estimates

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America 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.


                                      - 5 -
<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
March 31, 2001
(unaudited)
(in U.S. dollars)

3) Promissory notes

     The Company entered into loan agreements evidenced by promissory notes with
     NB Finance, Ltd., an affiliated company. The promissory notes are
     collateralized only by mortgage loans which are secured by residential
     first mortgages and insured by the Canada Mortgage and Housing Corporation.

     The promissory notes have maturities ranging from April 2001 to March 2006,
     at rates ranging from 6.714% to 9.774%, with a weighted average rate of
     approximately 7.895% per annum.

     These rates approximate market interest rates for loans of similar credit
     and maturity provisions and, accordingly, management believes that the
     carrying value of the promissory notes receivable approximates their fair
     value.

     Promissory notes as of December 31, 2000            $  379,543,070
     Acquisitions                                           107,179,965
     Principal repayments                                   (51,878,459)
     -------------------------------------------------------------------
     Promissory notes as of March 31, 2001               $  434,844,576
     -------------------------------------------------------------------

     The scheduled principal repayments as of March 31,2001 are as follows:

                                                $
                              2001         147,068,814
                              2002          37,550,363
                              2003          96,940,955
                              2004          57,467,152
                              2005          90,695,309
                              2006           5,121,983

4) Transactions with an affiliated company

     During the quarters ended March 31, 2001 and March 31, 2000, the Company
     earned interest from NB Finance, Ltd. on the promissory notes in the amount
     of $9,026,664 and $7,585,974, respectively (see Note 3).

     The amount of $10,393,091 due from an affiliated company as of March 31,
     2001 and $5,285,479 as of December 31, 2000, represent interest and
     principal repayments due on the promissory notes.

5) Transactions with the parent company

     The Company entered into agreements with National Bank of Canada in
     relation to the administration of the Company's operations. The agreements
     are as follows:

     Advisory agreement

     In exchange for a fee equal to $25,000 per year, payable in equal quarterly
     installments, National Bank of Canada will furnish advice and
     recommendations with respect to all aspects of the business and affairs of
     the Company. During the three-month periods ended March 31, 2001 and March
     31, 2000, fees of $6,250 were charged to the Company.

                                      - 6 -
<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
March 31, 2001
(unaudited)
(in U.S. dollars)

5) Transactions with the parent company (continued)

     Servicing agreement

     National Bank of Canada will service and administer the promissory notes
     and the collateralized mortgage loans and will perform all necessary
     operations in connection with such servicing and administration.

     The fee will equal to one-twelfth (1/12) of 0.25% per annum of the
     aggregate outstanding balance of the collateralized mortgage loans as of
     the last day of each calendar month. For the three-month periods ended
     March 31, 2001 and March 31, 2000, the average outstanding balance of the
     collateralized mortgage loans were $569,796,242 and $449,143,432,
     respectively. During the three-month periods ended March 31, 2001 and March
     31, 2000, fees of $341,882 and $277,323 respectively, were charged to the
     Company.

     Custodian agreement

     National Bank of Canada will hold all documents relating to the
     collateralized mortgage loans. During the three-month periods ended March
     31, 2001 and March 31, 2000, no fee was charged to the Company.

6) Stockholders' equity

     Common stock

     The Company is authorized to issue up to 1,000 shares of $ 0.01 par value
     common stock.

     Preferred stock

     The Company is authorized to issue up to 10,000,000 shares of $0.01 par
     value preferred stock as follows:

     300,000 shares authorized and issued as 8.35% Non-cumulative Exchangeable
     Preferred Stock, Series A, non-voting, ranked senior to the common stock
     and junior to the Adjustable Rate Cumulative Senior Preferred Shares, with
     a liquidation value of $1,000 per share, redeemable at the Company's option
     on or after September 3, 2007, except upon the occurrence of certain
     changes in tax laws in the United States of America and in Canada, on or
     after September 3, 2002.

     Each Series A share is exchangeable, upon the occurrence of certain events,
     for one newly issue 8.45% Non-cumulative First Preferred Share, Series Z,
     of National Bank of Canada.

     These Series A shares are traded in the form of Depositary Shares, each
     representing a one-fortieth interest therein.

     1,000 shares authorized and 110 shares issued as Adjustable Rate Cumulative
     Senior Preferred Shares, non-voting, ranked senior to the common stock and
     to the 8.35% Non-cumulative Exchangeable Preferred Stock, Series A, with a
     liquidation value of $3,000 per share, redeemable at the Company's option
     at any time and retractable at the holder's option on December 30, 2007 and
     every ten-year anniversary thereof.


                                      - 7 -
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
        AND RESULTS OF OPERATIONS

The Company's principal business objective is to acquire, hold, finance and
manage assets consisting of obligations secured by real property as well as
other qualifying REIT assets ("Mortgage Assets"). The Company has elected to be
taxed as a REIT under the Internal Revenue Code of 1986, as amended, and,
accordingly, is generally not liable for United States federal income tax to the
extent that it distributes at least 95% of its taxable income, subject to
certain adjustments, to its stockholders.

Results of operations:

For the three-month periods ended March 31, 2001 and March 31, 2000, the Company
reported net income of $9,232,863 and $8,328,194, respectively. Revenues, which
were comprised entirely of interest income, were $9,622,262 and $8,770,612
respectively, and expenses were $389,399 and $442,418, respectively. Since the
Company has elected to be taxed as a REIT, no income tax was recorded during the
period.

Ninety-four percent of revenues for the three-month period ended March 31, 2001
and eighty-six percent of revenues for the three-month period ended March 31,
2000 were derived from the Mortgage Assets issued by NB Finance, Ltd., an
affiliated company ("NB Finance"). The Mortgage Assets issued by NB Finance are
collateralized by the "Mortgage Loans" that consist of twenty-six pools of
residential first mortgages insured by Canada Mortgage and Housing Corporation
and which are secured by real property located in Canada. The balance of the
revenues result from interest on cash equivalents.

Expenses for the three-month periods ended March 31, 2001 and 2000, totaled
$389,399 and $442,418, respectively, of which $348,132 and $283,573,
respectively, represent servicing and advisory fees paid to National Bank of
Canada, the Company's direct parent (the "Bank") pursuant to the Servicing
Agreement between the Bank and the Company (the "Servicing Agreement") and the
Advisory Agreement between the Bank and the Company (the"Advisory Agreement"),
whereby the Bank performs all necessary operations in connection with
administering the Mortgage Assets issued by NB Finance and the Mortgage Loans.
Legal and other professional fees include payment to the transfer agent, annual
fees to Security Exchange Commission and other professional fees.

During the three-month period ended March 31, 2001, the Board of Directors of
the Company authorized dividends of, in the aggregate, $6,270,288 ($6,270,626
for the three-month period ended March 31, 2000) on Preferred Stock (i.e.,
Adjustable Rate Cumulative Senior Preferred Shares (the "Senior preferred
Shares") and 8.35% Non-cumulative Exchangeable Preferred Stock, Series A (the
"Series A Preferred Shares") and, accordingly, the Depositary Shares). Such
dividends were paid on March 30, 2001.


                                      - 8 -
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
        AND RESULTS OF OPERATIONS (continued)

Capital Resources and Liquidity:

The Company's revenues are derived from its Mortgage Assets. As of March 31,
2001, $435 million of Mortgage Assets issued by NB Finance were
over-collaterized by the C$802 million ($544 million) of Mortgage Loans. The
Company believes that the amounts generated from the payment of interest and
principal on such Mortgage Loans will provide more than sufficient funds to make
full payments with respect to the Mortgage Assets issued by NB Finance and that
such payments will provide the Company with sufficient funds to meet its
operating expenses and to pay quarterly dividends on the Senior Preferred Shares
and the Series A Preferred Shares and, accordingly, the Depositary Shares. To
the extent that the cash flow from its Mortgage Assets exceeds those amounts,
the Company will use the excess to fund the acquisition of additional Mortgage
Assets and make distributions on the Common Stock.

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

As at March 31, 2001, the Company had cash equivalents of $38,280,563 which
represent 7.9% of total assets compared to $97,133,758 or 20% of total assets as
at December 31, 2000. The decrease in liquidity is attributable to investment in
Mortgage Assets. It is expected that the Company will invest in additional
Mortgage Assets when cash resources reach over 20% of total assets. While this
continues to be the Company's investment policy, the Company maintains
flexibility in this regard. On January 30, 2001, the Company has bought $107
millions in additional Mortgage Assets in order to reduce the increase of
liquidity. The liquidity level is sufficient for the Company to pay fees and
expenses pursuant to the Servicing Agreement and the Advisory Agreement.

The Company's principal short-term and long-term liquidity needs are to pay
quarterly dividends on the Senior Preferred Shares and the Series A Preferred
Shares and, accordingly, the Depositary Shares, to pay fees and expenses of the
Bank pursuant to the Servicing Agreement and the Advisory Agreement, and to pay
franchise fees and expenses of advisors, if any, to the Company.

The Company does not have any indebtedness (current or long-term), other
material capital expenditures, balloon payments or other payments due on other
long-term obligations. No negative covenants have been imposed on the Company.


                                      - 9 -
<PAGE>


Disclosure About Market Risk

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


                                     - 10 -
<PAGE>


                           PART II. OTHER INFORMATION


ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K

(a)      Exhibit:
                       Exhibit No.         Description

                       11                  Computation of Earnings Per Share


(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed during the quarter for which this
report is filed.


                                     - 11 -
<PAGE>


                                   SIGNATURES

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

     Pursuant to the requirements of the Securities Exchange Act of 1934,
     the registrant has duly caused this report to be signed on its behalf
     by the undersigned thereunto duly authorized.

--------------------------------------------------------------------------------
                                         NB CAPITAL CORPORATION
     Date May 15, 2001                             /s/ Tom Doss
          ------------                   -------------------------------------
                                                       Tom Doss
                                         Chief Financial Officer and Treasurer


                                     - 12 -