Financial Overview and Performance

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Scotiabank

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Financial

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Q4/03

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#1Scotiabank Scotiabank Investor Presentation Fourth Quarter, 2004 November 30, 2004 1 Overview Rick Waugh President & Chief Executive Officer 2#2Scotiabank 2004 - performance highlights Q4/04 Results (vs. Q4/03) ■ EPS: $0.69 - up 9.5% ■ ROE: 18.8% vs. 18.6% 2004 Results (vs. 2003) ■ EPS: $2.82 - up 20.5% ■ ROE: 19.9% vs. 17.6% ■ Provision for credit losses: $390 mm vs. $893 mm Strong Capital Ratios TCE: 9.7% vs. 8.9% Another Dividend Increase ■ +2 cents to 32 cents/quarter effective Q1/05 3 Scotiabank Growth across all business lines Net income, $ millions 1,136 1,094 854 746 721 669 Domestic Scotia Capital 4 2003 2004 195 (7) International Other#3Scotiabank A record of consistent earnings growth ... Net income, $ millions 482 94 95 96 97 98 * charges related to Argentina Scotiabank 110 95 80 60 65 89 50 540* 2,931 99 00 01 02 03 04 H 5 and a record of consistent dividend growth with two increases this year Annual dividend, cents/share adjusted for 100% stock dividend $1.28* 35 29¢ 20 1994 1996 * based on current rate 2004 increase: 31% 1998 2000 2002 2004 6#4Scotiabank Exceeded our 2004 performance targets ROE 2004 Target 19.9% VS. 16-19% EPS Growth 20.5% VS. 10-15% Productivity 56.0% VS. <58% ด Scotiabank 7 Performance Review Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 8#5Scotiabank Results negatively impacted by stronger Canadian dollar $ millions Q4/Q3 Q4/Q4 2004 / 2003 (28) (49) Net Interest Income (321) (21) (19) Other Income (212) (49) (68) Total Revenue (533) ༠།8 20 37 Expenses 227 (22) (22) Net income (210) (2c) (2c) EPS impact (cents) (21c) Scotiabank 9 Underlying revenue growth in 2004 $ millions Change 2004 2003 $ % Reported 10,185 10,165 20 Impact of Stronger Canadian dollar 533 533 Impact of ACG 13 49 49 Underlying 10,767 10,165 602 6 Other Income Net Interest Income 4,512 4,015 497 12 6,255 6,150 105 2 10#6Scotiabank Continued pressure on margins Q4/04 vs. Q3/04 2004 vs. 2003 2.12% (3) bps Net interest margin 2.16% (7) bps Due to: (1) Canadian currency (ex. AcG 13) (9) (3) Foreign currency (ex. AcG 13) w 1 ACG 13/Other (1) Scotiabank 11 Solid growth in other income $ millions Q4/Q3 Q4/Q4 2004 / 2003 (39) (11) Reported 305 8% 21 19 Impact of stronger Canadian $ 212 7 3 Impact of AcG 13 (20) (11) 11 Underlying 497 12% (52) (12) Securities Gains 318 (6) (4) Retail/Discount Brokerage 55 (8) 13 Deposit & Payment services 53 1 Card Revenues 27 (7) (15) Credit Fees (101) 33 6 Other (47) (39) (11) 12 305 8%#7Scotiabank $ millions Higher expenses Q4/Q3 Q4/Q4 2004 / 2003 (11) (33) Reported 131 2% 20 37 Impact of stronger Canadian dollar 227 9 4 Underlying 358 6% (11) 18 Pension & employee benefits 88 (37) (12) Stock & performance-based comp. 70 Mortgage costs/Advertising/Dominican 12 13 47 Republic 14 8 Technology 34 9 (20) Severance (25) 2 (40) Other (83) (11) (33) 131 2% 13 Scotiabank 60 55 59 Strong productivity expenses as % of revenues 50 T 99 00 01 02 03 04 14 56.0#8Scotiabank $ millions Change Q4/04 vs. Q4/03 Lower deduction for non-controlling interest 1 Non-controlling interest Issuance of BaTS securities Inverlat Change 2004 vs. 2003 14 (69) (4) Other (16) (3) Total (71) 1 Preferred dividends* (23) * excluding redemption premiums Scotiabank 12 15 Very strong capital ratios % of risk-adjusted assets 10.8 10 11.3 11.5 Tier 1 8 9.7 9.5 8.9 Tangible Common CO 6 Equity 4 2 ○ Q4/03 Q3/04 16 Q4/04#9Scotiabank Increase in unrealized securities gains $ millions Scotiabank Q4/04 Q3/04 Q4/03 - Emerging Market Debt 507 451 512 - Fixed Income 39 (2) 27 - Equities 502 438 164 1,048 887 703 17 Business Line Results 18#10Scotiabank Net income, $ millions 264 Domestic - strong asset growth offset by lower margins " Net income 289 255 " ■ Q4/03 Q3/04 Q4/04 ◉ Scotiabank - down 3% yr/yr, 12% qtr/qtr Revenue up 4% yr/yr Strong asset growth - residential mortgages up 15% vs. Q4/03 - revolving credit up 17% vs. Q4/03 core deposits up 18% vs. Q4/03 Lower interest margin Expenses up 5% qtr/qtr - higher performance-based compensation, technology, severance and advertising Provisions up $26 mm yr/yr 19 Market share gains in Canada All industry market share VS. September September 2004 2003 (%) (bps) Residential mortgages 12.1 +52 Chequing & savings 10.1 +26 Business current accounts 20 13.8 +70#11Scotiabank Scotia Capital - credit quality Net income, $ millions. 221 196 continues to improve 244 Q4/03 Q3/04 Q4/04 Net income - - up 10% yr/yr, 24% qtr/qtr record results in several areas Lower provisions - Net recovery in Q4/04 of $25 mm vs. net provisions of $22 mm in Q4/03, $28 mm in Q3/04 Revenue down 14% yr/yr, 8% qtr/qtr - lower lending volumes decreased underwriting fees Expenses down 18% yr/yr, 19% qtr/qtr - lower performance-based compensation 21 Scotiabank - International – negative impact of foreign currency translation Net income, $ millions 156 218 165 ◉ Net income - up 6% yr/yr, down 24% qtr/qtr - foreign currency translation reduced 2004 net income by $112 mm Caribbean - growth in retail lending volumes higher provisions related to hurricanes Latin America Inverlat & Chile up strongly offset by lower securities gains Q4/03 Q3/04 Q4/04 ☐ Asia - net income down qtr/qtr 22#12Scotiabank Scotiabank Inverlat - growing contribution earnings contribution, $ millions 43 Q4/03 71 T ด Scotiabank 83 " ◉ Net contribution rose to $83 mm Q4/04 Underlying revenues up 10% qtr/qtr - growth in retail lending & deposits - - higher margins Expenses relatively flat Q3/04 Q4/04 23 Risk Review Warren Walker Executive Vice-President Global Credit Risk Management 24 24#13Scotiabank Credit risk overview ■ Lower gross impaired loans: $2.2 B - down $815 mm vs. Q3/04 ■ Lower net impaired loans: $(496) mm (after general allowance) - down $269 mm vs. Q3/04 - down $543 mm vs. Q4/03 ■ Lower specific provisions: $90 mm - down $10 mm vs. Q3/04 - down $30 mm vs. Q4/03 ■ $100 mm release of general allowance in 2004 25 Negative net formations this quarter Scotiabank $ millions Domestic - - Retail 72 - Commercial སལ (2) International @སྦྱ 70 (3) Scotia Capital - - Canada (47) - U.S. - Europe (88) (19) (154) Total (87) 26#14Scotiabank Continuing positive trend in net impaired loans $ millions, after general allowance 47 12 (104) (227) Q4/03 Q1/04 Q2/04 27 Q3/04 (496) Q4/04 Scotiabank $ millions Q4/04 Significant reduction in specific provisions in 2004 Q3/04 2004 2003 74 70 Domestic 317 272 43 2 International 70 137 Scotia Capital: (10) (15) 280 20 - U.S. 54 270 - Other 52 279 (2) Other (3) (1) 90 100 490 957 Argentina (64) 90 100 Total 490 893 28#15Scotiabank $ millions Scotia Capital - positive trend in net formations and provisions 275 Net Formations PCL 225 175 125 75 25 -25 -75 -125 -175 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 29 Scotiabank # days Low variability of trading revenues ... trading revenues, 2004 = 92%+ days positive 40 35 30 25 20 15 10 5 0 (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 $ millions 30 7 8 9 10 11 12#16Scotiabank ...reflecting moderate market risk $ millions, November 1, 2003 to October 31, 2004 20 Actual P&L VAR 1 day 10 -10 -20 Scotiabank Average 1 day VAR = $8.8 mm 31 Risk summary ■ Much improved credit quality ■ Market risk well controlled ■ Expect further release of general allowance 32#17Scotiabank Scotiabank Outlook Rick Waugh President & Chief Executive Officer 33 Outlook Continuing challenges strong Canadian dollar - weak corporate borrowing margin compression ■ Opportunities - - 3 growth platforms strong capital & reserves 34#182005 targets Scotiabank ■ EPS growth: 5-10% ■ ROE: 17-20% productivity ratio - below 58% ■ maintain strong capital ratios and credit ratings 35 Scotiabank This document includes forward-looking statements which are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. These statements include comments with respect to our objectives, strategies, expected financial results (including those in the area of risk management), and our outlook for our businesses and for the Canadian, U.S. and global economies. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intent," "estimate," "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. The Bank cautions readers not to place undue reliance on these statements, as a number of important factors 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; the effect of changes in monetary policy; legislative and regulatory developments in Canada and elsewhere; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; the Bank's ability to complete and integrate acquisitions; 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; consolidation in the Canadian financial services sector; changes in tax laws; competition; judicial and regulatory proceedings; acts of God, such as earthquakes; the possible impact of international conflicts and other developments, including terrorist acts and war on terrorism; 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. The Bank cautions that the foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Bank, investors and others should carefully consider the foregoing 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 behalf of the Bank. 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. 36

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