Toronto, October 22, 2001: : Premium Income Corporation (the "Company") had declared quarterly dividends of $0.226696 on each of its Preferred Shares and $0.20 on each of its Class A shares, payable October 31, 2001 to shareholders of record on that date. In addition, the Company has declared a special dividend on each of its Class A shares of $0.75 payable on the same date for a total dividend of $0.95 to Class A shareholders.

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 will from time to time, write covered call options in respect of all or part of the common shares in the Portfolio. In addition, the Company may write cash covered put options in respect of securities in which the Company 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.