#1Scotiabank Investor Presentation Fourth Quarter, 2009 December 8, 2009 Caution Regarding Forward-Looking Statements Our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include comments with respect to the Bank's objectives, strategies to achieve those objectives, expected financial results (including those in the area of risk management), and the outlook for the Bank's businesses and for the Canadian, United States and global economies. Such statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intent," "estimate," "plan," "may increase," "may fluctuate," and similar expressions of future or conditional verbs, such as "will," "should," "would" and "could." By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. Do not unduly rely on forward-looking statements, as a number of important factors, many of which are beyond our control, could cause actual results to differ materially from the estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: the economic and financial conditions in Canada and globally; fluctuations in interest rates and currency values; liquidity; significant market volatility and interruptions; the failure of third parties to comply with their obligations to us and our affiliates; the effect of changes in monetary policy; legislative and regulatory developments in Canada and elsewhere, including changes in tax laws; the effect of changes to our credit ratings; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions and liquidity regulatory guidance; operational and reputational risks; the risk that the Bank's risk management models may not take into account all relevant factors; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services in receptive markets; the Bank's ability to expand existing distribution channels and to develop and realize revenues from new distribution channels; the Bank's ability to complete and integrate acquisitions and its other growth strategies; changes in accounting policies and methods the Bank uses to report its financial condition and the results of its operations, including uncertainties associated with critical accounting assumptions and estimates; the effect of applying future accounting changes; global capital markets activity; the Bank's ability to attract and retain key executives; reliance on third parties to provide components of the Bank's business infrastructure; unexpected changes in consumer spending and saving habits; technological developments; fraud by internal or external parties, including the use of new technologies in unprecedented ways to defraud the Bank or its customers; consolidation in the Canadian financial services sector; competition, both from new entrants and established competitors; judicial and regulatory proceedings; acts of God, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments, including terrorist acts and war on terrorism; the effects of disease or illness on local, national or international economies; disruptions to public infrastructure, including transportation, communication, power and water; and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements. For more information, see the discussion starting on page 62 of the Bank's 2009 Annual Report. The preceding list of important factors is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf. The "Outlook" sections in this document are based on the Bank's views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. Additional information relating to the Bank, including the Bank's Annual Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC's website at www.sec.gov Scotiabank 2#2Scotiabank Overview Rick Waugh President & Chief Executive Officer 2009 Overview • Successfully managing through a challenging economy Strong financial performance, benefiting from record revenues Net income: $3.5 billion - - EPS: ROE: $3.31 16.7% Record net income in all three business lines • Credit portfolios performing within expectations Well capitalized - Tier 1: TCE: 10.7% 8.2% Scotiabank 4#3Strong Earnings from All Business Lines (net income, $ millions) 1,724 1,851 1,186 1,315 1,451 787 □ 2008 2009 3,547 3,140 Canadian International Scotia Other All-Bank Banking Banking Capital (557) (1,070) Scotiabank Met 2009 Targets EPS Growth ROE 2009 vs. 2008 Target 8.5% VS. 7-12% 16.7% VS. 16-20% Productivity Ratio 53.7% VS. <58% Scotiabank 5 6#4Scotiabank Financial Review Luc Vanneste Executive Vice-President & Chief Financial Officer Solid Quarter Q4/09 Q3/09 Q4/08 Q4/09 vs. Q4/08 Q4/09 vs. Q3/09 Net Income ($MM) 902 931 315 100%+ (3)% EPS $0.83 $0.87 $0.28 100%+ (5)% ROE 16.4% 17.3% 6.0% 10.4% (0.9)% Productivity Ratio 54.2% 51.0% 75.2% (21)% 3.2% Year-over-year earnings comparison Quarterly earnings benefited from... •Significantly lower writedowns • Higher trading revenues • Positive impact of acquisitions Scotiabank Partly offset by... • Increase in specific provisions •Higher expenses • Negative impact of forex 8#5Items of Note Q4/09 Q3/09 Q2/09 Q1/09 2009 2008 CDOS/CLOS (13) 56 (9) (45) (11) (516) AFS Securities (49) (186) (104) (236) (575) (217) Writedowns All Other (2008) (488) Total (62) (130) (113) (281) (586) (1,221) After-tax (43) (86) (86) (185) (400) (822) Scotiabank FX Impact by Business Line 9 Q4/09 vs. Q3/09 International ($ millions) Banking Scotia Canadian Capital Banking Other Total Net Interest Income (49) (11) (3) (1) (64) Other Income (20) (2) (1) (4) (27) Non-Interest 36 4 2 42 Expenses Other Items (net) 17 1 1 19 Net Income (16) (8) (3) (3) (30) EPS (3) cents Scotiabank 10#6Solid Revenues, Impacted by FX Revenues (TEB) ($ millions) 3,843 3,808 1,599 1,636 2,586 550 Q4/09 vs. Q4/08 Revenues ■Net interest income up 7% + Higher margin & asset growth Negative impact of FX ■ Other income up 100% + + Significant increase in securities gains & trading revenues vs. writedowns in Q4/08 + Higher credit & underwriting fees + Increased mutual fund revenues Q4/09 vs. Q3/09 Revenues ■ Net interest income down 3% 2,244 2,036 2,172 - Q4/08 Q3/09 Q4/09 Other Income Net Interest Income (TEB) + Asset re-pricing Decrease in loan volumes Negative impact of financial instruments & FX ■ Other income up 2% + Higher net gains on securities + Higher credit, underwriting & mutual fund fees - Continued strong trading, but down vs. record Q3 - Lower securitization revenues, negative impact of FX Scotiabank Asset Balances Average Assets ($ billions) (2)% Q4/09 vs. Q3/09 Business & Government (1) (11)% Negative impact of FX Loan paydowns in Q4, full quarter impact of loan paydowns in Q3 507 495 Residential mortgages 118(2) • 121(2) • Personal loans 60 60 ■Business & government Securities 120 107 103(2) 98(2) Other 106 109 Q3/09 Q4/09 (1) Includes BAs (2) Residential Mortgages and Securities exclude the impact of MBS which were transferred into securities Scotiabank 11 12#7Stable Net Interest Margin (%) 1.68 1.52 1.76 1.74 1.71 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q4 margin benefited from... . Asset re-pricing • Lower non-earning assets Offset by... • Negative impact of financial instruments Scotiabank 13 Higher Expenses: Growth Initiatives & Seasonality Non-Interest Expenses ($ millions) 2,064 1,959 1,944 1,097 1,058 1,093 394 382 382 73 504 573 484 Q4/09 vs. Q4/08 Expenses - Higher performance & stock-based compensation - Impact of acquisitions Increased capital taxes $23MM relating to VISA rewards points + Positive impact of FX Q4/09 vs. Q3/09 Expenses Higher performance & stock-based compensation Seasonally higher advertising & business development spending Increased professional fees $23MM relating to VISA rewards points Q4/08 Q3/09 Q4/09 + Positive impact of FX Salaries & employee benefits Premises & technology Other Scotiabank 14#8Strong Capital Ratios Tier 1 Ratio (%) 9.3 9.5 9.6 10.4 10.7 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q4/09 vs. Q3/09 Capital Ratios + $352 million of internal capital generation + DRIP & Option Plan: $178 million No net impact from RWA or FX TCE Ratio (%) 7.9 8.2 7.2 7.2 6.6 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Scotiabank 15 Canadian Banking: Record Quarter Net Income ($ millions) 500 503 466 Q4/08 Q3/09 Q4/09 Q4/09 vs. Q4/08 + Revenues up 10% + Increased margin, deposit & asset growth + Higher contributions from wealth management PCLs up $83MM Expenses up 6% $23MM relating to VISA reward points Higher performance-based compensation & wealth management commissions, partly offset by strong cost control Q4/09 vs. Q3/09 + Revenues up 5% + Higher margin (+10 bps) due to asset re-pricing & funding mix + Asset growth, primarily residential mortgages + Increased wealth management revenues PCLs up $21MM Expenses up 6% $23MM relating to VISA rewards points - Higher stock & performance-based compensation - Spending on growth initiatives Scotiabank 16#9International Banking: Impacted by FX 227 Net Income ($ millions) 312 283 Q4/08 Q3/09 Q4/09 Scotiabank Q4/09 vs. Q4/08 + Revenues up 7% + Net securities gains (vs. Q4/08 writedowns) + Underlying retail loan growth & wider interest margins, partly due to acquisitions + Lower effective tax rate - PCLs up $77MM + Expenses down 2% - + FX & strong cost control Q4/09 vs. Q3/09 Revenues down 2% + $79MM Q3/09 writedown on an equity investment + Higher securities gains Negative impact of financial instruments - Lower average Commercial volumes + PCLs down $12MM Expenses up 3% Higher seasonal & professional expenses 17 Scotia Capital: Strong Quarter, 2nd Highest Ever 44 Net Income ($ millions) 470 353 Q4/08 Q3/09 Q4/09 Q4/09 vs. Q4/08 + Revenues up 100% + + Q4/08 writedowns of $503MM + Stronger underlying trading revenues + Record credit fees & investment banking revenues - PCLs up $53MM, from low level in Q4/08 - Expenses up 14% Increased legal provisions, support costs & technology expenses Q4/09 vs. Q3/09 Revenues down 18% - 2nd highest trading quarter, but down vs. record Q3 - Lower average loan volumes, partly offset by wider lending spreads + Record credit fees & investment banking revenues + PCLs down $43MM Expenses up 7% - Increased remuneration & legal provisions, partly offset by lower incentive compensation Scotiabank 18#10Other Segment (1) ($ millions) Q4/09 Q3/09 Q4/08 Funding Net Interest Income (155) (151) (113) Net Securitization Revenues (2) (139) (96) 1 AFS Securities Writedowns (3) (49) (95) (128) Other Items of Note (2008) (207) Financial Instruments 28 25 (66) General Provision (100) Expenses & Net Other Items 27 (66) (18) Taxes (Excl. TEB Offset) 51 132 109 Total Other (237) (351) (422) (1) Includes Group Treasury and other corporate items, which are not allocated to a business line (2) Represents the impact to the Other segment of CMB securitization revenues recognized in other income, and the reduction in mortgage net interest income earned as a result of removing the mortgages from the Balance Sheet (3) Represents the portion of the Bank's AFS securities writedowns which were reported in the Other segment Scotiabank Scotiabank Risk Review Brian Porter Group Head, Risk & Treasury 19#11Q4/09 Risk Overview • Risk in credit portfolios well managed ($ millions) Q4/09 Q3/09 Q4/08 Specific Provisions 424 466 207 Addition to General Allowance 100 Gross Impaired Loans 3,939 3,993 2,494 Scotiabank Decline in Provisions Quarter-over-Quarter ($ millions) Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Specific Canadian Banking 107 155 178 170 International Banking 90 116 115 179 Scotia Capital 10 10 109 117 Total 207 281 402 466 424 8ཎྜ⌘* 192 167 65 Sectoral Canadian Banking Scotia Capital Total General Total PCL Scotiabank 1660 (1) (2) 50 (11) (2) (12) (4) 27 100 207 281 489 554 420 21 22#12Retail: Stable Provisions Quarter-over-Quarter (specific provisions, $ millions) 283 281 252 251 146 122 183 130 125 105 Q4/09 vs. Q3/09 International Banking Lower provisions in Mexico, Peru, Chile & Caribbean Canadian Banking Higher provisions for unsecured revolving credit Provisions in acquired auto business stable and as planned • 159 122 126 137 78 Q4/08 Q1/09 Q2/09 Q3/09 Canadian Banking International Banking Q4/09 PCL ratio (bps) 44 58 60 67 70 Scotiabank Corporate/Commercial: Lower Provisions Quarter-over-Quarter (specific provisions, $ millions) 23 183 151 Q4/09 vs. Q3/09 Scotia Capital 143 • 117 109 59 65 • 45 45 24 29 33 10 10 52 29 33 33 33 -15 -14 -10 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Canadian Banking International Banking Scotia Capital Lower provisions in Canada & U.S. International Higher provisions in Asia, Peru, Caribbean & Central America Lower provisions in Mexico & Chile 88 PCL ratio (bps) 46 60 53 Scotiabank 24 224#13• Specific Provisions Stabilizing ($ millions) 500 400 300 200 100 0 Q4/06 Q1/07 Q2/07 Q3/07 1 Specific PCLS Q4/07 Scotiabank 2010 Risk Outlook • Q1/08 Q2/08 Q3/08 -Specific PCLS as a % of Avg. Loans & BAS Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 • Signs of portfolios stabilizing Overall pace of credit migration slowing 2010 provisions Retail provisions will likely stay at elevated levels Corporate/Commercial provisions to decline gradually Overall, expect downward trend in second half of 2010 Scotiabank 26 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 25#14Scotiabank Canadian Banking 2010 Outlook Chris Hodgson Group Head, Canadian Banking Canadian Banking: 2010 Outlook • Continued focus on growing Wealth Management • • • Build on 2009 launch of Scotia Life Financial - Leverage prospect databases: SCENE and retail banking • Accelerate business development efforts within Commercial Banking Continue to build strength in the Scotiabank brand - Increase consumer awareness and propensity to "shop" Scotiabank Maintain positive operating leverage - Continue to invest in sales force and distribution Scotiabank 28#15Scotiabank International Banking 2010 Outlook Rob Pitfield Group Head, International Banking International Banking: 2010 Outlook Despite challenging economic conditions globally, relative performance has confirmed strategy • Economic outlook improving Asset and revenue growth expected as economies rebound Continue to prudently manage risk Seek opportunistic acquisitions Scotiabank 30#16Scotiabank Scotia Capital 2010 Outlook Stephen McDonald Group Head, Global Corporate & Investment Banking & Co-CEO, Scotia Capital Scotia Capital: 2010 Outlook • Market conditions are normalizing - Expect 2010 to be strong, but unlikely to match record 2009 Prudently managing credit and market risks - PCL ratio has performed much better than in previous downturn • Continue investing in our businesses - Leverage recent investments: equities, fixed income, infrastructure Maintain efforts on cross-selling multiple products to client base Global niche focus Scotiabank 32#17Scotiabank 2010 Outlook Rick Waugh President & Chief Executive Officer 2010 Outlook Cautiously optimistic Economic and regulatory environment Confident of continuing our growth Targets for 2010 remain unchanged Revenues and net interest margins expected to expand Provisions to remain elevated, but expected downward trend in second half Expect positive operating leverage Scotiabank 34#182010: Targets Remain Unchanged EPS Growth ROE Productivity Ratio Capital Scotiabank Scotiabank Appendix Target 7-12% 16-20% <58% Maintain strong ratios 35#19Contribution From Acquisitions (1) ($ millions) 2009 2008 Net Interest Income 629 276 Other Income 352 99 Non-Interest Expenses (455) (202) Other Items (net) (210) (46) Net Income 316 (2) 127 EPS (diluted) $0.31 $0.13 (1) Includes acquisitions made in 2008 and 2009, excluding funding costs. (2) The following contributed greater than $10 million to net income during 2009: Canada: equity stake in CI Investments, loan portfolio purchased from HSBC, E*TRADE Canada International: Banco del Desarrollo (Chile), additional 20% ownership in Scotiabank Peru, Banco del Trabajo & Profuturo (Peru) & additional 24% ownership in Thanachart (Thailand) Scotiabank Impact of FX ($ millions) Net Interest Income Other Income Q4/09 vs. Q4/08 2009 vs. 2008 (75) 235 (34) 111 Non-Interest Expenses 59 (55) Net Income (27) 207 EPS (diluted) (3) cents 20 cents Spot Rate Average Exchange Rate Oct. 31/09 2009 2008 Q4/09 Q3/09 Q4/08 0.93 $US/$CAD 0.86 0.97 0.93 0.88 0.91 12.21 Mexican peso/$CAD 11.59 10.47 12.30 11.53 10.18 2.68 Peruvian new sol/$CAD 2.62 2.86 2.71 2.66 2.73 490.88 Chilean peso/$CAD 497.76 490.44 508.6 472.99 518.40 Scotiabank 37 38#20Canadian Banking: Higher Margin, Wealth Management Revenues Revenues (TEB) ($ millions) 1,886 1,805 1,714 1,038 1,125 1,199 397 388 365 279 292 322 Q4/08 Q3/09 Q4/09 Retail & Small Business ■Commercial Banking Wealth Management Q4/09 vs. Q4/08 Revenues Retail & Small Business + Increased assets & deposits + Higher margin Commercial Banking + Asset re-pricing - Lower asset levels Wealth Management + Increased contributions from CI & Dundee Wealth + Higher revenues from iTRADE Q4/09 vs. Q3/09 Revenues + Higher margin, benefiting from asset re-pricing + Increased wealth management revenues due to stronger market conditions: + Higher full service brokerage revenues + Strong mutual fund sales Scotiabank Canadian Banking: Volume Growth 39 Average Balances ($ billions) Q4/09 Q3/09 Q4/08 Y/Y Q/Q Residential Mortgages (1) 122.9 119.9 115.3 6.6% 2.5% Personal Loans 36.9 35.8 32.3 14.1% 3.1% Credit Cards (2) 9.3 9.2 9.0 3.4% 0.6% Non-Personal Loans & 23.6 25.0 27.7 (14.7)% (5.4)% Acceptances Personal Deposits 93.5 93.8 87.2 7.2% (0.3%) Non-Personal Deposits 54.1 52.5 45.3 19.5% 3.0% Wealth Management AUA 136.8 126.8 127.5 7.3% 7.9% (1) Before securitization (2) Includes ScotiaLine VISA Scotiabank 40#21Canadian Banking: Market Share Market Share (%) 1 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Total Personal Lending 17.89 17.84 17.94 17.85 17.90 Total Personal Deposits 11.16 11.25 11.26 11.12 10.91 Mutual Funds 7.59 7.61 7.63 7.93 8.35 (1) Market share statistics are issued on a one-month lag basis. (Q4 09: September 2009) Total Personal Lending market share is based on a comparison with the big six banks. Total Personal Deposits market share is based on a comparison with the total industry. Mutual Funds market share is based on a comparison with total banks. Sources: Mutual Funds - IFIC; Personal Lending and Personal Deposits - Bank of Canada Scotiabank 41 International Banking: Solid Underlying Revenues Revenues (TEB) ($ millions) 1,275 1,252 1,168 292 298 355 395 424 464 588 530 349 Q4/08 Q3/09 Q4/09 Mexico Caribbean & Central America Latin America & Asia Q4/09 vs. Q4/08 Revenues ■ Up 15% excluding FX ■ Mexico - Negative FX impact + Higher fee income, offset by lower margin ■ Caribbean & Central America Negative FX & financial instrument impact + Higher retail loan growth & wider margins ■ Latin America & Asia + Q4/08 writedowns + Acquisitions/investment (Peru, Thailand) + Higher securities gains Q4/09 vs. Q3/09 Revenues Up 4% excluding FX ■ Mexico + Higher fee & trading income, offset by negative FX impact ■ Caribbean & Central America + $79MM Q3/09 writedown of an equity investment ■ Latin America & Asia - Negative impact of financial instruments + Higher securities gains Scotiabank 42#22Scotia Capital: 2nd Highest Revenue Quarter Revenues (TEB) ($ millions) 1,104 614 910 443 232 490 467 208 24 Q4/08 Q3/09 Q4/09 Global Capital Markets Global Corporate & Investment Banking Scotiabank Q4/09 vs. Q4/08 Revenues + Q4/08 included $503MM in writedowns Global Capital Markets + Stronger fixed income & equity revenues - Lower FX revenues, vs. record in Q4/08 Global Corporate & Investment Banking + Record credit fees & investment banking revenues + Significantly wider lending spreads & higher loan origination fees - Lower loan volumes Q4/09 vs. Q3/09 Revenues Global Capital Markets - - 2nd best trading quarter ever, but down vs. record Q3 Lower derivatives & fixed income revenues Global Corporate & Investment Banking - Lower loan volumes, but wider lending spreads Decreased loan origination fees - + Record credit fees & investment banking revenues 43 Economic Outlook in Key Markets Real GDP (Annual % Change) 2010E 2009F 2008 2000-07 Avg. Mexico 3.4 (6.8) 1.3 2.9 Peru 4.2 1.4 9.8 5.1 Chile 5.0 (1.5) 3.2 4.4 Jamaica 0.0 (4.0) (1.0) 1.5 Trinidad & Tobago 3.0 (0.7) 3.5 8.2 Costa Rica 1.8 (1.5) 2.9 4.7 Dominican Republic 2.0 0.5 4.8 5.4 Thailand 4.0 (3.5) 2.9 4.9 2010E 2009F 2008 2000-07 Avg. Canada 2.7 (2.4) 0.4 2.9 U.S. 3.1 (2.5) 0.4 2.6 Source: Scotia Economics, as of December 7th Scotiabank 44#23Unrealized Securities Gains ($ millions) Emerging Market Debt Other Debt Equities Net Fair Value of Derivative Instruments and Other Hedge Amounts Total Scotiabank Q4/09 Q3/09 502 470 470 450 41 (25) 1,013 895 (185) (162) 828 733 Trend in PCL Ratios (Specific PCL as % average of loans & BAs) Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Canadian Banking Retail Commercial Total 0.20 0.30 0.32 0.33 0.37 0.42 0.50 0.83 0.52 0.55 0.23 0.33 0.39 0.36 0.40 International Banking Retail 2.01 2.26 2.17 2.59 2.30 Commercial (0.15) (0.12) (0.09) 0.32 0.48 Total 0.59 0.68 0.69 1.13 1.13 Scotia Capital Corporate Banking 0.10 0.07 0.80 1.01 0.65 All Bank 0.29 0.36 0.54 0.64 0.63 Scotiabank 45 46#24Gross Impaired Loan Formations ($ millions) Q4/09 Q3/09 Canadian P&C Retail 439 409 Commercial 74 91 513 500 International P&C Retail 254 276 Commercial 90 278 344 554 Scotia Capital Canada 75 U.S. & Europe 218 130 218 205 Total 1,075 1,259 Scotiabank Canadian Retail: higher formations in residential mortgages & credit cards Canadian Commercial: classification of several small accounts International Retail: higher formations in Caribbean; lower formations in Mexico, Peru & Chile International Commercial: lower formations across all geographies Scotia Capital: classification of a number of accounts in U.S. Trend in Gross Impaired Loans ($ millions) 5,000 4,000 3,000 2,000 1,000 III Q4/06 Q1/07 Q2/07 Q3/07 Scotiabank Gross Impaired Loans Q4/07 Q1/08 Q2/08 Q3/08 GILS as a % of Loans & BAS Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 48 47#25Solid Coverage Ratios Earnings Coverage of PCL (1) (2009) 3.7x Specific Allowance (Q4/09) as a % of Gross Impaired Loans 35% Total Allowances (Q4/09) as a % of Gross Impaired Loans 73% (1) Pre-tax, pre-provision income to total PCL Total Allowance as % of Loans and Acceptances 0.91% 0.87% 0.86% 1.07% 1.03% 山 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Scotiabank Canadian Retail: Loans and Provisions (outstandings at Q4/09, $ billions) 124 Total $168B -- 92% secured 23 12 9 49 Mortgages(1) % secured PCL 100% Lines of Credit 70% Personal Loans 93% Credit Cards(2) 36% Q4/09 Q3/09 Q4/09 Q3/09 Q4/09 Q3/09 Q4/09 $ millions (4) (3) 1 36 23 65 68 60 Q3/09 45 % of avg. N/A 1 63 41 229 237 258 194 loans (bps) (1) Before securitizations of $17.5 billion & mortgages converted to MBS of $21 billion 53% insured; LTV in mid-50s for uninsured portfolio (2) Includes $6 billion of Scotialine VISA (3) Recovery of provisions for mortgages reflects lower than expected write-offs Scotiabank 50#26International Retail: Loans and Provisions (outstandings at Q4/09, $ billions) 9.9 2.9 0.8 Total Portfolio = $21B 77% secured ■Personal Loans (total = $6.5B) Credit Cards (total = $1.8B) ■Mortgages (total = $12.6B) 4.6 4.1 1.2 62 6.2 -0.4 12 0.1 2.3 3.0 1.2 2.8 0.5 0.6 C&CA (1) Mexico Chile Peru % of total 48% 24% 18% 10% PCL Q4/09 Q3/09 Q4/09 Q3/09 Q4/09 Q3/09 Q4/09 Q3/09 $ millions 31 36 38 46 14 15 38 49 % of avg. 121 130 306 349 136 149 657 833 loans (bps) (1) Caribbean and Central America Scotiabank International Commercial: Lending Portfolio Q4/09 $33 billion Other 7% Mexico 11% Chile 18% Peru 10% Asia/Pacific -(10 countries) 27% Caribbean & -Central America 27% Well secured Portfolios in Asia/Pacific and Peru are performing well Closely monitoring portfolios in Mexico and Caribbean & Central America Hotel exposures Impact of U.S. slowdown in Mexico. Scotiabank 51 52#27International Commercial: Lending Portfolio Q4/09 $33 billion Holding Companies 3% Financial Services Hotels & Gaming 7% 9% Communications & Media 5% Automotive 3% Agrifoods & Consumer 16% Transportation 9% Industrial Products 5% Infrastructure, -Privatization & Power 14% Other 17% Well secured Real Estate 12% Closely monitoring portfolios in Mexico and Caribbean & Central America Scotiabank Hotel exposures Impact of U.S. slowdown in Mexico Trading Results Within One-Day VaR 40 30 20 10 0 (10) (20) (30) (40) - Actual P&L 1-Day VaR плиилина Scotiabank Average 1-Day VaR Q4/09: $15.0MM Q3/09: $15.5MM 53 54#28Trading Revenue Q4/09 Trading Revenue 10 8 st 2 (# days) 0 (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 18 ($ millions) Scotiabank ■ 91% of days had positive results in Q4/09 Reclassification of Debt Securities to Loans (1) ($ millions) Before (2) After Change Personal Loans 50,719 58,434 7,715 Business & Government 125,503 127,235 1,732 Loans AFS Securities 38,823 30,294 (8,529) Deferred Tax Asset 2,800 2,477 (323) AOCI (3,596) (3,001) 595 ROE Impact Net Income Impact (1) 94% of reclassified AFS securities are investment grade (2) Reclassification as of November 1, 2008 Scotiabank (50) bps NIL 55 55 56