Press Release

Mulvihill Premium Canadian Bank
Shareholders Approve Special Resolution
(For Immediate Release, May 16, 2003)

Toronto, May 16, 2003: Premium Income Corporation (the "Company") today announced that its shareholders have approved a special resolution to extend the life of the Company for an additional 7 years to November 1, 2010. The resolution extends the participation of holders of Class A Shares and Preferred Shares in the performance of the Companyıs underlying portfolio of Canadian Bank shares beyond the original redemption date of November 1, 2003 while maintaining the rights originally provided to shareholders. Details of the proposal have been provided in an information circular previously delivered to holders of Class A Shares and Preferred Shares.

Premium Income Corporation is a mutual fund corporation which invests in the common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and The Toronto-Dominion Bank. To generate additional returns above the dividend income earned on the Portfolio, the Company may from time to time write covered call options in respect of all or part of the common shares in the portfolio. In addition, the Fund may write cash covered put options in respect of securities in which the Fund is permitted to invest.

The Company's investment portfolio is managed by its investment manager, Mulvihill Capital Management Inc. The Company's Preferred and Class A shares are listed on The Toronto Stock Exchange under the symbols PIC.PR.A and PIC.A.

For further information, please contact:

John Mulvihill, President & CEO
Mulvihill Structured Products

David Middleton, CFO

Mulvihill Premium Canadian Bank Fund
121 King Street West, Suite 2600
Toronto, Ontario M5H 3T9
(416) 681-3966   (800) 725-7172