#1Investor Presentation Fourth Quarter 2018 Scotiabank®#2CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, 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. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management's Discussion and Analysis in the Bank's 2018 Annual Report under the headings "Outlook" and in other statements regarding the Bank's objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank's businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as "believe," "expect," "foresee," "forecast," "anticipate," "intend," "estimate," "plan," "goal," "project," and similar expressions of future or conditional verbs, such as "will," "may," "should," "would" and "could." By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank's ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank's information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; 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 preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank's results, for more information, please see the "Risk Management" section of the Bank's 2018 Annual Report, as may be updated by quarterly reports. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2018 Annual Report under the headings "Outlook", as updated by quarterly reports. The "Outlook" sections are based on the Bank's views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. 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. Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank's shareholders and analysts in understanding the Bank's financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, 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. 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#3TABLE OF CONTENTS Scotiabank Overview • . • • Canada's International Bank Well Diversified and Profitable Business Increased Scale, Improving Focus Track Record of Earnings & Dividend Growth Why Invest in Scotiabank? Strong Capital Generation and Position . Progress in Digital Banking • Medium-Term Financial Objectives Business Line and Financial Overview . 2018 Financial Performance • Q4 2018 Financial Performance • • • • Canadian Banking Overview International Banking Overview Global Banking and Markets Overview Credit Performance by Business Lines Treasury and Funding • Funding Strategy • 456 7 8 9 10 11 12 13 14 15 16 23 27 29 30 31 • • Wholesale Funding Composition Deposit Overview Wholesale Funding Utilization Liquidity Metrics Corporate Social Responsibility Appendix 1: Bail-in and TLAC Appendix 2: Canadian Housing Market Appendix 3: Key Market Profiles Appendix 4: Covered Bonds Contact Information 32 33 34 35 36 38 45 53 65 70 Scotiabank® | 3#4Scotiabank Overview Scotiabank®#5Canada's International Bank Top 10 Bank in the Americas 1,2 Americas 2018 Bank of the Year in Latin America and the Caribbean by LatinFinance 7th by market capitalization¹ 8th by assets 1 Full Service Canada Mexico Peru • Chile • Colombia Caribbean Wholesale Operations • • USA UK Hong Kong Singapore Australia Ireland China • Brazil South Korea Uruguay Malaysia India • Japan • Change Scotiabank³ 2018 Y/Y Revenue $28.8B +6% Net Income $9.1B +10% Europe Return on Equity 14.9% +20bps Operating Leverage 3.7% +390bps Productivity Ratio 51.7% -190bps Total Assets $998B 9% Ranking by Market Share4 Canada 3 USMCA Asia PAC U.S.A. Mexico Peru Chile Top 10 Foreign Bank Colombia 6335 1 Source: Bloomberg; 2 By assets and market capitalization; 3 Figures adjusted for Acquisition-related costs, including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions and amortization of intangibles related to current and past acquisitions; 4 Market share in loans as of September 2018 for PACS, as of July 2018 in Canada; 5 For the twelve months ended October 31, 2018; 6 Excluding Corporate adjustments LEADING BANK IN THE AMERICAS Earnings by Geography3,5,6 Other Other Americas 10% 7% PAC 21% Canada 55% 7% U.S.A Americas (90%) Scotiabank® 5#6Well Diversified and Profitable Business Diversified by business and by country, creating stability and lowering risk Earnings by Business 1,2,3 Earnings by Country 1,2,3 Global Wealth Management Canadian Banking 51% 12% Global Banking and Canadian Banking P&C Markets 19% EARNINGS MIX 39% $8.9B International Banking 30% Other International 10% Colombia Other Americas 1% 7% Chile 5% EARNINGS MIX Peru 8% $8.9B Canada 55% Mexico 7% U.S. 7% Adjusted Return on Equity by Division 23.0% 15.8% 16.0% 14.9% Canadian Banking International Banking Global Banking and Markets All Bank 1 For the twelve months ended October 31, 2018; 2 Figures adjusted for Acquisition-related costs, including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions and amortization of intangibles related to current and past acquisitions; 3 Excluding Corporate adjustments GREATER SCALE, GREATER FOCUS 6 Scotiabank®#7Increasing Scale, Improving Focus¹ Gaining scale in key markets to drive earnings growth, improve earnings quality and reduce risk profile Gaining Market Share (Total Loans) 2013 2018 0 2 4 6 8 10 12 14 16 18 20 Canada Increasing Scale with Strategic Acquisitions (2017-2019) MD Canada Chile MD Financial Management СМАСО JARISLOWSKY FRASER GLOBAL INVESTMENT MANAGEMENT BBVA Increases wealth management assets to $230B. Adds 110,000 primary customers. Doubles market share. Creates 3rd largest bank. Mexico Chile Peru Colombia Improving Earnings Quality Peru banco cencosud Creates #2 bank in credit cards. Colombia Citibank Creates market leader in credit cards. Dominican Republic Doubles customer base. Creates 4th largest bank. PROGRESO Reducing Risk Profile Increased wealth AUM by $78B in 2018. Targeting earnings contribution to All-Bank earnings from Reduced exposure to Trade Finance in Asia by $7B Reduced contribution of trading to All-Bank revenue from 7.5% to 4.9% • 12% to 15% 15-year period 2013-2018 INCREASING SCALE, IMPROVING FOCUS 57 countries 2013 38 countries 2018 Between 2013 and 2018, exited 19 countries with either low returns, small scale or higher operational risk: • Turkey • Russia • Haiti ⚫ Egypt Taiwan UAE ⚫ plus 13 others • Reduced wholesale funding (% of assets) from 29.6% to 24.2% Reduced asset exposure in Asia by 21% 7 Scotiabank®#8Track Record of Earnings and Dividend Growth Stable and predictable earnings with steady increases in dividends Earnings per share (C$)1.2 Total shareholder return³ $3.05 +9% CAGR $7.11 III Scotiabank Big 5 peers (ex. Scotiabank) 13.2% 11.1% 11.8% 12.0% 10.4% 6.6% 08 09 10 11 12 13 14 15 16 17 18 5 Year 10 Years 20 Years Dividend per share (C$) $1.92 08 09 +6% CAGR $3.28 10 11 12 13 14 15 16 17 18 1 Reflects adoption of IFRS in Fiscal 2011 2 Excludes notable items for years prior to 2016. For 2016 onwards, results adjusted for acquisition-related costs including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions and amortization of intangibles related to current and past acquisitions. 3 As of October 31, 2018 INCREASING SCALE, IMPROVING FOCUS 8 Scotiabank®#9Why Invest in Scotiabank? CANADA'S INTERNATIONAL BANK AND A TOP 10 BANK IN THE AMERICAS DIVERSIFIED EXPOSURE TO HIGH QUALITY GROWTH MARKETS INCREASING SCALE AND MARKET SHARE IN KEY MARKETS IMPROVING QUALITY OF EARNINGS WHILE REDUCING RISK PROFILE ENHANCING COMPETITIVE ADVANTAGE IN TECHNOLOGY AND TALENT . • • • • Diversified by business and geography, providing sustainable and growing earnings and dividends Strong balance sheet, capital and liquidity ratios • Attractive dividend yield and long-term shareholder returns - Leading bank in the Pacific Alliance growth markets of Mexico, Peru, Chile and Colombia a region of 230 million people o Under-banked market with average age of 29 Earnings momentum in personal, commercial and wealth businesses Gaining market share in key markets of Canada and Pacific Alliance Top 3 bank in Canada, Chile and Peru Increasing scale in Wealth and Pacific Alliance with $7B of strategic acquisitions in 2018 Approx. 80% of earnings from core personal and commercial banking businesses Exited over 20 non-core countries and businesses since 2014 Strong Canadian risk management culture - building stronger capabilities for AML, cyber and reputational risk Leading levels of technology investment supports digital banking strategy. Increasing digital sales adoption with clear targets • Well positioned in the Pacific Alliance to leverage technology platform versus local and global competitors Named to Top 25 "World's Best Workplaces" (2018) 9 Scotiabank®#10Strong Capital Generation and Position Capital levels are significantly higher than the minimum regulatory requirements CET1 Ratio 11.2% 11.4% +33 bps +14 bps -65 bps 11.1% -10 bps +1 bp +10 bps Q3/18 Internal Capital RWA Impact Generation (ex. FX) Impact of Acquisitions Share issuance / (buybacks) (net) Other Including FX Q4/18 Impact of Announced Dispositions Q4/18 Pro- Forma Strong Capital Levels 14.9% 1.8% 1.6% 15.3% 14.6% 14.5% 14.3% 1.8% 1.9% 1.7% 1.5% 1.5% 1.4% 1.8% 1.4% 12.0% 11.5% 11.2% 11.4% 11.1% Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 CET1 Tier 1 Tier 2 Scotiabank® 10 110#11Progress in Digital Banking Progressing well against 2018 Investor Day digital targets Digital Retail Sales +11% 15 11 22 22 Digital Adoption +7% 26 29 29 33 33 In-Branch Financial Transactions -6% 26 23 20 F2016 F2017 F2018 F2016 F2017 F2018 F2016 F2017 F2018 Goal >50% Goal >70% Goal <10% • Solid progress made in all five key markets across various product suites including deposits, personal loans, insurance, etc. • Digitally-active users up over 30% in Mexico, Colombia and Peru. High single digit growth in Canada and Chile • Mobile transactions up over 30% in Canadian Banking, while in-branch transactions declined 6% Scotiabank® 11#12Medium-Term Financial Objectives 2018 results consistent with medium-term objectives METRIC OBJECTIVES 2018 FY RESULTS1 (Y/Y) ALL BANK EPS Growth 7%+ +9% ROE 14%+ 14.9% Operating Leverage Positive 3.7% Capital Strong Levels 11.1% OTHER FINANCIAL OBJECTIVES Dividend Payout Ratio 40-50% 47.7% CANADIAN BANKING Net Income Growth Productivity Ratio 7%+ +8% <49% 49.3% INTERNATIONAL BANKING Net Income Growth² Productivity Ratio 9%+ <51% +16% 52.4% 1 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and the Day 1 PCL impact on acquired performing loans in Q3/18; 2 On a constant dollar basis Scotiabank® 12 12#13Business Line and Financial Overview Scotiabank®#142018 Financial Performance Strong adjusted earnings growth with positive operating leverage and productivity gains $MM, except EPS YEAR-OVER-YEAR HIGHLIGHTS 2018 Y/Y Reported Net Income $8,724 +6% . Adjusted Net Income up 10%³ Diluted EPS $6.82 +5% Revenue $28,775 +6% Expenses $15,058 +3% Productivity Ratio 52.3% (160bps) Core Banking Margin 2.46% PCL Ratio 1, 2 48bps +3bps PCL Ratio on Impaired Loans 1, 2 Adjusted³ 43bps (2bps) Net Income $9,144 +10% Diluted EPS $7.11 +9% Expenses $14,871 +2% Productivity Ratio 51.7% (190bps) PCL Ratio 1, 2 41bps (4bps) ADJUSTED NET INCOME³ BY BUSINESS SEGMENT ($MM) Revenue up 6% 。 Net interest income up 8% 。 Non-interest income up 4% Expense growth of 2%3 Productivity ratio improved 190 bps³ Full year operating leverage of +3.7%³ • Improved PCL ratio on impaired loans 1,2 . • • • +8% Y/Y +16% Y/Y 4,090 4,416 2,424 2,819 Canadian Banking -3% Y/Y 1,818 1,758 International Banking Global Banking and Markets ■ 2017 ■ 2018 12018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39 2 Provision for credit losses on certain assets - loans, acceptances and off-balance sheet exposures 3 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and the Day 1 PCL impact on acquired performing loans in Q3/18 Scotiabank® 14#15Q4 2018 Financial Performance Strong revenue growth and higher NIM $MM, except EPS Q4/18 Y/Y Q/Q Reported Net Income $2,271 +10% +17% · Diluted EPS $1.71 +4% +10% Revenue $7,448 +9% +4% · Expenses $4,064 +11% +8% Productivity Ratio 54.6% +80bps +210bps Core Banking Margin 2.47% +3bps +1bp PCL Ratio 1,2 39bps (3bps) (30bps) • PCL Ratio on Impaired Loans 1, 2 42bps +1bp • Adjusted³ Net Income $2,345 +13% +4% • Diluted EPS $1.77 +7% +1% Expenses $3,962 +9% +6% Productivity Ratio 53.2% (40bps) +140bps PCL Ratio 1, 2 39bps (3bps) (1bp) DIVIDENDS PER COMMON SHARE 0.03 0.03 0.79 0.79 0.82 0.82 0.85 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 ■ Announced Dividend Increase YEAR-OVER-YEAR HIGHLIGHTS Adjusted Net Income up 13%³ Revenue up 9% 。 Net interest income up 10% 。 Non-interest income up 8% Expenses up 9%* 3 Productivity ratio improved 40 bps³ Flat PCL ratio 1.2 on impaired loans 12018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39 2 Provision for credit losses on certain assets - loans, acceptances and off-balance sheet exposures 3 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and the Day 1 PCL impact on acquired performing loans in Q3/18 Scotiabank® 15#16Canadian Banking Overview A leader in personal & commercial banking, wealth and insurance in Canada BUSINESS OVERVIEW 2019 PRIORITIES STRATEGIC OUTLOOK • Canadian Banking provides a full suite of financial advice and banking solutions, supported by an excellent customer experience to Retail, Small Business, Commercial Banking, and Wealth Management customers ⚫ It serves customers through its network of branches ABMs, as well as internet, mobile and telephone banking and specialized sales teams • Customer focus: Deliver a leading customer experience and deepen relationships with customers across our businesses and channels • Productivity: Reduce structural costs while driving tangible revenue initiatives in order to build the capacity to invest in our businesses and technology Digital transformation: Leverage digital as the foundation of all our activities to improve our operations, enhance the client experience and drive digital adoption Business mix alignment: Optimize our business mix by growing higher margin assets, building core deposits and expanding fee based income Leadership: Grow and diversify talent and engage employees through a performance-oriented culture Canadian Banking's growth in 2019: Expected to be driven in part by a favourable economic outlook and rising interest rate environment in Canada • Assets are projected to grow across retail and business banking products; Deposits are also expected to grow across retail chequing and savings, and business banking • • Margins are expected to strengthen during 2019 and non-interest revenues are expected to grow underpinned by our wealth acquisitions Key priorities for 2019: Integrating MD Financial and Jarislowsky Fraser, and driving operational improvements Scotiabank® 16#17Q4 2018 Canadian Banking Financial Performance Solid asset and deposit growth, margin expansion and positive operating leverage4 FINANCIAL PERFORMANCE AND METRICS ($MM)¹ YEAR-OVER-YEAR HIGHLIGHTS Adjusted Net Income up 7%4 。 Asset and deposit growth, margin expansion Revenue up 5% 。 Net interest income up 6% Q4/18 Y/Y Q/Q Reported • Revenue $3,443 +5% +2% Expenses $1,747 +7% +5% • PCLS $198 (9%) +9% Net Income $1,115 +4% (1%) Productivity Ratio 50.7% +80bps +150bps • Loan growth of 5% Net Interest Margin 2.45% +4bps (1bp) PCL Ratio 2, 3 0.23% (4bps) +2bps PCL Ratio on Impaired Loans², 3 0.22% (5bps) +1bp Adjusted4 Expenses $1,705 +5% +4% Net Income $1,146 +7% Productivity Ratio 49.5% (20bps) +70bps ADJUSTED NET INCOME 14 ($MM) AND NIM (%) 2.41% 2.41% 2.43% 2.46% 2.45% • · · • 1,073 1,107 1,022 1,141 1,146 。 Business loans up 13% o Residential mortgages up 3%; credit cards up 7% Deposit growth of 6% 。 Personal up 5%; Non-Personal up 7% NIM up 4 bps 。 Rising rate environment and improved business mix Expenses up 5%4 。 Investments in technology and regulatory initiatives 。 Full-year productivity ratio improvement of 90bps4 Full-year operating leverage of +1.9%4 PCL ratio23 improved by 4 bps due to lower retail PCLs Q4/17 Q1/18 1 Attributable to equity holders of the Bank Q2/18 Q3/18 Q4/18 2 2018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39 3 Provision for credit losses on certain assets-loans, acceptances and off-balance sheet exposures 4 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions Scotiabank® 17#18Canadian Banking: Revenue and Loan Mix Strong retail and growing commercial and wealth 18% Commercial 57% Retail REVENUE MIX1 $3.4B 1 For the three months ended October 31, 2018 25% Wealth 2% Credit Cards 60% Residential Mortgage AVERAGE LOAN MIX1 $340B 16% Business and Government Loans 22% Personal Loan Scotiabank® 18#19Canadian Banking: Retail Exposures High quality retail loan portfolio: ~92% secured • Residential mortgage portfolio is high quality 。 43% insured, and the remaining 57% uninsured has a LTV of 54%¹ • Market leader in auto loans 。 $37 billion auto loan portfolio with 7 OEM relationships (3 exclusive) o Prime Auto and Leases (~91%) 。 Lending terms have been declining with contractual terms averaging 77 months with effective terms averaging 54 months • Growth opportunity in credit cards o $7.3 billion credit card portfolio represents ~3% of domestic retail loan book and 1.3% of the Bank's total loan book Organic growth strategy focused on payments and deepening customer relationships 。 Upside potential from existing customers: ~80% of growth is from existing customers (penetration rate mid-30s versus peers in the low-40s) 。 Strong risk management culture with specialized credit card teams, customer analytics and collections focus 5% DOMESTIC RETAIL LOAN BOOK $286.2B 1 LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet HPI data. Unsecured 3% Credit Cards 79% Real Estate Secured Lending -13% Automotive Scotiabank® 19#20Canadian Banking: Residential Mortgages High quality, well managed portfolio o Residential mortgage portfolio of $213 billion: 43% is insured; LTV is 54% on the uninsured book1 Mortgage business model is “originate to hold" . • • New originations2 had average LTV of 63% in Q4/18 Majority is freehold properties; condominiums represent approximately 13% of the portfolio 。 Scotiabank has three distinct distribution channels: 1. Broker (~55%); 2. Branch (~25%); and 3. Mobile Salesforce (~20%) О All adjudicated under the same standards 。 The mortgage portfolio has good diversification across Canada with approximately half of the portfolio in Ontario CANADIAN MORTGAGE PORTFOLIO: $213B (SPOT BALANCES AS AT Q4/18, $B) Freehold $185B Condos $28B $107.0 43% Insured $12.2 Total Portfolio: $213 billion $94.8 $38.6 $9.2 $30.7 $3.6 $15.9 $29.4 $27.1 $1.8 $14.1 $11.4 $11.2 $0.2 $9.5 $8.8 $0.7 57% Uninsured Ontario BC & Territories Alberta Quebec Atlantic Provinces Manitoba & Saskatchewan % of 50% 18% 14% 8% 5% 5% portfolio 1 LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet HPI data 2 New originations defined as newly originated uninsured residential mortgages and have equity lines of credit, which include mortgages for purchases refinances with a request for additional funds and transfer from other financial institutions Scotiabank® 20 20#21Canadian Banking: Residential Mortgages (continued) High quality portfolio, lower originations in Vancouver and Toronto NEW ORIGINATIONS: UNINSURED LTV* DISTRIBUTION GVA 59% BC & Territories 61% Q4/17 Q3/18 Q4/18 Y/Y Canada Total Originations ($B) Uninsured LTV 12.9 11.9 10.5 -19% 64% 63% 63% -1% GTA Total Originations ($B) Uninsured LTV 3.9 3.6 3.2 -18% 63% 62% 62% -1% Prairies 67% ON 63% QC 65% Atlantic Provinces 69% GVA Total Originations ($B) Uninsured LTV 1.8 1.4 1.1 -39% 61% 60% 59% -2% *Average LTV ratios for our uninsured residential mortgages originated during the quarter FICO® DISTRIBUTION - CANADIAN UNINSURED PORTFOLIO Average FICO Canada Score 787 GTA 790 GVA 790 57% . 16% 11% 12% 4% < 635 636-706 707- - 747 748-788 > 788 FICO is a registered trademark of Fair Isaac Corporation • <0.65% of uninsured portfolio has a FICO® score of <620 and an LTV >65% Canadian uninsured mortgage portfolio is $121 billion as at Q4/2018 Scotiabank® 21 21#22Tangerine Canada's #1 Digital Bank and the official and exclusive Bank to the Toronto Raptors & their fans #1 -96% -97% Industry Leading NPS Digital Onboarding Digital Transactions KEY STRATEGIC FOCUS: • • • • • Simplicity ~91% Digital Sales Simple market-leading products that appeal to value-conscious Canadians Deliver a seamless Client Experience through digital innovations Great rates, simple products, and no unfairfees Velocity Enhanced self-service options, adding speed & agility Nimble modern platform supporting rapid development cycles A low cost, scalable, digital approach Partnerships Accelerating momentum through the Toronto Raptors Deepening client relationships by introducing SCENE Loyalty • Partnership with Scotiabank continues to deepen Speed & Agility • • • Conscious Self-Directed Tech-Friendly Higher Client Growth from Cross-buy ~50% Clients Own Multiple Products Primary Clients = Stickier Relationships # Primary Clients +23% Y/Y Strong Client Advocacy 50% New Clients via Referrals Ignite Growth Strategy. Focus will be on P&L expansion via client acquisition and growth on both sides of the balance sheet: Deliver strong NIAT growth and positive operating leverage Deepen Relationships by establishing incremental Primary Banking Customers Leverage strategic partnerships to drive growth in the client base and key segments (Quebec and Millennials) Ignite growth in Deposits, Earning Assets, and AUM Drive multi-product client relationships Maintain Industry Leading NPS Position 93% of Tangerine's clients are linked to competitors: Big 5 (ex- Scotiabank) and Credit Unions Client-Driven Innovation Unique 'Orange' Culture Award Winning Approach Modern Platform 90 Scalable: Nimble, low cost systems provide a holistic client view. Rapid Deployments: Agile best practices enable quick & efficient new product & feature delivery. Incubator: Identify, explore, and pilot new technologies and solutions to meet evolving Client needs. Team Tangerine: Our unique culture and lean team are an essential part of how we deliver. Consistently Recognized: J.D. Power Customer Satisfaction seven years in a row, Finovate "Best in Class" for digital experiences. Scotiabank® 22#23International Banking Overview Well established and diversified franchise in high quality growth markets BUSINESS OVERVIEW 2019 PRIORITIES • International Banking operates primarily in Latin America, the Caribbean and Central America with a full range of personal and commercial financial services, as well as wealth products and solutions • Customer focus: Leverage our investments in our new customer experience system to keep strengthening our service oriented culture ⚫ Leadership: Continue attracting and developing exceptional and diverse leadership talent to keep pace with the changing needs of an increasingly competitive global market • Structural cost transformation: Prudently continue to deliver cost reductions Digital transformation: Continue accelerating our digital transformation to gain scale and deliver business impact • Business mix alignment: Continue achieving profitable growth by increasing core deposits, growing our insurance revenues and integrating strategic acquisitions into our operations Strong risk culture: Improving our risk management practices by strengthening our leadership team and continued investment in technology STRATEGIC OUTLOOK • Pacific Alliance: Good momentum and will continue to leverage its diversified footprint - with particular emphasis on the Pacific Alliance - and focus on successfully integrating recent acquisitions in Chile, Peru, Colombia and Dominican Republic Margins and credit quality are expected to remain stable with the level in Q4/18 Expense management and delivering positive operating leverage remains a key priority Scotiabank® 23#24Q4 2018 International Banking Financial Performance Strong performance in the Pacific Alliance supported by acquisitions FINANCIAL PERFORMANCE AND METRICS ($MM) 1,5 YEAR-OVER-YEAR HIGHLIGHTS2 Q4/18 Y/Y Q/Q Reported • Adjusted Net Income up 22% 6 Revenue $3,134 +22% +11% Expenses $1,721 +23% PCLS $412 Net Income $712 +15% +32% (45%) +18% +36% Productivity Ratio 54.9% +50bps +200bps Net Interest Margin 4.52% (15bps) (18bps) PCL Ratio 1.05% (9bps) (153bps) 。 Strong asset and deposit growth in Pacific Alliance o Includes impact of acquisitions and alignment of reporting period Revenues up 22% o Pacific Alliance up 28% PCL Ratio on Impaired Loans³, 4 Adjusted 1.20% +6bps (13bps) • Loans up 29% Expenses $1,661 PCLs $412 Net Income $746 Productivity Ratio 53.0% PCL Ratio 3, 4, 6 1.05% +19% +14% +32% +14% +22% +6% (100bps) +130bps (9bps) (18bps) o Pacific Alliance loans up 42% • NIM down 15 bps • ADJUSTED NET INCOME¹6 ($MM) AND NIM5 (%) 1,6 4.67% 4.66% 4.74% 4.70% 4.52% 613 675 683 715 746 • Q4/17 Q1/18 1 Attributable to equity holders of the Bank Q2/18 Q3/18 Q4/18 · 。 Mainly driven by the business mix impact of acquisitions Expenses up 19%Ⓡ o Business volume growth, inflation and higher technology costs 。 Full year productivity ratio improvement of 150bps6 Full-year positive operating leverage of 3.1% PCL ratio3, 4, 6 down 9 bps 2 Y/Y and Q/Q growth rates (%) are on a constant dollars basis, while metrics and change in bps are on a reported basis 3 2018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39 4 Provision for credit losses on certain assets - loans, acceptances and off-balance sheet exposures 5 Net Interest Margin is on a reported basis 6 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and the Day 1 PCL impact on acquired performing loans in Q3/18 Scotiabank® 24 24#25International Banking: Revenue and Loan Mix Focused on Latin America, with good contribution from the Caribbean and Central America 71% Latin America REVENUE MIX1,2 $2.8B 6% Asia 24% Caribbean & Central America 1 For the three months ended October 31, 2018 2 On a constant dollar basis 51% Business and Government Loans 6% Credit Cards AVERAGE LOAN MIX 1, 2 $144B 16% Personal Loans 27% Residential Mortgages Scotiabank® 25 25#26Scotiabank In The Pacific Alliance Countries Well positioned to grow now and in the future Population 1,2 Government Presidential Elections Financial Stability Economy GDP1 Exports5 Trade Partners5 Business Environment HDI Score Rank6 Banking Penetration1 Foreign Direct Investment¹ Scotiabank Market Share7 Key Highlights of Pacific Alliance countries (PACS) 6x Canada's population; projected growth outpaces Canada, other EM³ and G7 countries; median age4 of 29 vs. 42 in Canada • No elections expected until 2021 All sovereign credit ratings in IG category with central banks targeting inflation since 1999 Ranks as the 9th largest economy in the world Manufacturing is the largest source of exports for the PACs at 64% US, China and Canada are the PACS' largest trading partners, representing 72% of exports • Ranks "High" or "Very High," comparable to Canada and the U.S. Under-banked with average banking penetration at 50% compared to over 90% in Canada and the U.S. FDI averaging 3.2% of GDP compared to 1.7% in Canada and the U.S. PACs (Total11/Average) 11.3% 4th Market Share Ranking? Mexico 7.1% 6th Peru 18.2% 3rd Chile 13.8% 3rd Colombia 6.2% 5th Strengths Mortgages and Auto Commercial, Personal and Credit cards Commercial, Credit cards and Mortgages Retail and Credit Cards Well positioned Average Assets³(C$B) $32.3 $24.0 $32.9 $12.3 $101.5 Revenue³(C$B) $2.2 $2.0 $1.7 $1.3 $7.2 Net Income after NC18,9 (C$B) $0.6 $0.7 $0.4 $0.1 $1.9 ROE8,9 # of Employees 8,10 26% 13,204 24% 11% 6% 17% 11,032 9,386 9,658 43,280 1 Source: World Bank 2017 2 Population growth: World Bank DataBank 2017-2022 3 EM countries include: Argentina, Brazil, China, Greece, India, Indonesia, Poland, South Africa, Turkey, and Russia 4 Source: The World Factbook, CIA 2017 5 Source: United Nation Conference on Trade and Development (UNCTAD) 2017; Organization for Economic Co-operation and Development (OECD) 2016 6 Human Development Index. Source: United Nations Development Programme (UNDP) 2017. For more information, please refer to: http://hdr.undp.org/sites/default/files/2018_human_development_statistical_update.pdf 7 Total loans market share as of September 2018 8 As of October 31, 2018 or for the fiscal year 2018 9 Earnings adjusted for acquisition-related costs including the Day 1 PCL on acquired performing loans, integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions 10 Employees are reported on a full-time equivalent basis 11May not add due to rounding 26 Scotiabank® 26#27Global Banking And Markets Overview Wholesale banking and capital markets business serving global clients . BUSINESS OVERVIEW Full-service wholesale bank in priority markets of Canada, the United States and Latin America; also offers a range of products and services in select markets in Europe and Asia-Pacific 2019 PRIORITIES • • Strategic Approach to Lending: Scotiabank GBM is focused on up-tiering corporate relationships and increasing our lending penetration where we have greater opportunities to win ancillary business Strengthening Investment Banking: Scotiabank GBM will continue its multi- year buildout to expand regional expertise for investment banking and equity capital markets to focus on local and cross-border M&A and advisory deals Deeper penetration of Pacific Alliance: Scotiabank GBM will meaningfully invest in the Pacific Alliance countries to become a true market leader in local and cross border banking and capital markets capabilities STRATEGIC OUTLOOK . By executing its client-focused strategy, leveraging the Bank's unique footprint, and having strong alignment across its global operations, Global Banking and Markets is projected to grow in-line with the Bank's overall growth profile • Global Banking and Markets expects to deliver continued strong growth in deposits, improved corporate lending and investment banking results to absorb required regulatory and technology investments Scotiabank® 27 27#28Q4 2018 Global Banking and Markets Financial Performance Solid loan growth, strong credit quality and lower productivity ratio FINANCIAL PERFORMANCE AND METRICS ($MM) YEAR-OVER-YEAR HIGHLIGHTS Reported Net Income up 6% Loans up 7% o U.S. loans up 13% NIM down 16 bps Q4/18 Y/Y Q/Q • Revenue $1,073 (1%) (3%) • Expenses $553 (3%) +2% PCLS ($20) N/A N/A Net Income $416 Productivity Ratio 51.5% Net Interest Margin PCL Ratio², 3 PCL Ratio on Impaired Loans², 3 (0.09%) (0.07%) +6% (6%) (80bps) +260bps 1.72% (16bps) (10bps) (13bps) (4bps) (11bps) (1bp) • • PCL ratio², 3 improved by 13 bps 。 Mainly driven by lower deposit and lending margins Expenses down 3% Productivity ratio improved 80 bps NET INCOME AND ROE 14.9% 16.2% 16.9% 15.6% 15.3% 447 441 454 416 391 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 1 Attributable to equity holders of the Bank 2 2018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39 3 Provision for credit losses on certain assets-loans, acceptances and off-balance sheet exposures o Impaired loan provision reversals in Europe Scotiabank® 28#29Credit Performance by Business Lines Stable all-bank PCL ratios on impaired loans IAS 39 ¦ IFRS 9 Q4/17 ¦ Q1/18 Q2/18 Q3/18 Q4/18 (As a % of PCLs on PCLs on PCLs on PCLs on Total PCLs on Total Total Total Average Net Loans & Acceptance) Impaired Impaired Loans Loans Impaired Impaired PCLs Impaired PCLS PCLs PCLS Loans Loans (adj) Loans Canadian Banking Retail 0.30 I 0.29 0.28 0.28 0.28 0.25 0.24 0.25 0.25 Commercial 0.07 0.11 0.08 0.09 0.09 (0.04) 0.06 0.06 0.15 I Total 0.27 0.27 0.25 0.25 0.25 0.21 0.21 0.22 0.23 Total - Excluding Credit Mark 0.28 | N/A N/A N/A N/A N/A N/A N/A N/A Benefits I I International Banking I Retail 2.00 2.28 2.39 2.26 2.16 2.36 2.254 2.38 2.21 Commercial 0.32 I 0.28 0.201 0.55 0.341 0.38 0.311,4 0.07 (0.06) Total 1.14 I 1.25² 1.261,2 1.382 1.221,2 1.33 1.234 1.20 1.05 Total - Excluding Credit Mark 1.34 N/A N/A N/A N/A N/A N/A N/A N/A Benefits I Global Banking and Markets 0.04 I (0.01) (0.04) 0.02 (0.05) (0.06) (0.05) (0.07) (0.09) All Bank 0.42 0.43 0.42 0.46 0.42 0.41 0.40 0.42 0.39 1 Excludes provision for credit losses on debt securities and deposit with banks 2 Not comparable to prior periods, which were net of acquisition benefits 3 On an reported basis; includes impact of Day 1 PCLs from acquisitions 4 On an adjusted basis; adjusted for Day 1 PCLs from acquisitions Scotiabank® 29 29#30Treasury and Funding Scotiabank®#31Funding Strategy Flexible, well-balanced and diversified funding sources Funding Strategy • Build customer deposits in all of our key markets Continue to manage wholesale funding (WSF) and focus on longer term funding Endeavouring to fund asset growth through deposits • Achieve appropriate balance between cost and stability of funding ○ Maintain pricing relative to peers ⚫ Diversify funding by type, currency, program, tenor and markets • Pre-fund at least one quarter ahead, market permitting ⚫ Centralized funding strategy and associated risk management SHORT-TERM FUNDING 。 USD 25 billion Bank CP program USD 3 billion Subsidiary CP program 。 CD Programs (Yankee/USD, EUR, GBP, AUD, HKD) ⚫ TERM FUNDING & CAPITAL Canadian Dollar o CAD 36 billion global registered covered bond program (uninsured Canadian mortgages) o Canada Mortgage Bonds and Mortgage Back Securities CAD 15 billion debt & equity shelf 。 (senior/sub debt, prefs, common shares) CAD 15 billion START ABS program (indirect auto loans) CAD 7 billion Halifax ABS shelf (unsecured lines of credit) 。 CAD 6 billion Principal at Risk (PAR) Note shelf 。 CAD 5 billion Trillium ABS shelf (credit cards) Foreign Currency o USD 20 billion debt & equity shelf (senior/sub debt, prefs, common shares) 。 USD 20 billion EMTN shelf 。 AUD 8 billion Australian MTN program 。 USD 7.5 billion Singapore MTN program Scotiabank® 31#32Wholesale Funding Composition Wholesale funding diversity by instrument and maturity1,6,7 36% Senior Notes 0% Bail-inable Notes MATURITY TABLE (EX-SUB DEBT) (CANADIAN DOLLAR EQUIVALENT, $B) 2% Asset-Backed Securities 13% $25 $24 $22 $6 $4 $8 $19 Covered Bonds $233B $4 $3 $1 Asset-Backed Commercial Paper³ 3% 31% Bearer Deposit Notes, Commercial Paper & Short-Term Certificate 2% Deposits from Banks2 of Deposits -10% Mortgage Securitization4 3% Subordinated Debt5 $16 $2 $13 $5 $18 $15 $14 $15 $14 $8 < 1 Year 2 Years 3 Years 4 Years 5 Years 5 Years Senior Debt ABS Covered Bonds 1 Excludes repo transactions and bankers acceptances, which are disclosed in the contractual maturities table in the MD&A of the Interim Consolidated Financial Statements. Amounts are based on remaining term to maturity. 2 Only includes commercial bank deposits raised by Group Treasury. 3 Excludes asset-backed commercial paper (ABCP) issued by certain ABCP conduits that are not consolidated for financial reporting purposes. 4 Represents residential mortgages funded through Canadian Federal Government agency sponsored programs. Funding accessed through such programs does not impact the funding capacity of the Bank in its own name. 5 Although subordinated debentures are a component of regulatory capital, they are included in this table in accordance with EDTF recommended disclosures. 6 As per Wholesale Funding Sources Table in MD&A. As of Q4/18 7 May not add to 100% due to rounding Scotiabank® 32 32#33Deposit Overview Stable trend in personal & business and government deposits PERSONAL DEPOSITS (SPOT, CANADIAN DOLLAR EQUIVALENT, $B) $193 $190 $195 $196 $204 $211 $215 $202 $199 $200 $201 $199 $198 3Y CAGR -4.1% PERSONAL DEPOSITS • Important for both relationship purposes and regulatory value . Good momentum with 4.1% CAGR over the last 3 years Q4/15 Q1/16 Q2/16 Q4/15 Q1/16 Q2/16 1 Calculated as Bus& Gov't deposits less Wholesale Funding, adjusted for Sub Debt Q3/16 Q4/16 Q1/17 $174 $169 $168 $155 $149 $179 $172 $139 $170 $161 $156 $156 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 • 3Y CAGR -12.3% BUSINESS & GOVERNMENT DEPOSITS1 (SPOT, CANADIAN DOLLAR EQUIVALENT, $B) Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 $197 • BUSINESS & GOVERNMENT Gaining share of deposits through leveraging of relationships • 12.3% CAGR over the last 3 years Focusing on operational, regulatory friendly deposits Scotiabank® 33#34Wholesale Funding Utilization Managing reliance on wholesale funding and growing deposits WHOLESALE FUNDING / TOTAL ASSETS 25.2% 25.1% 24.6% 24.5% 24.2% 23.8% 23.7% 23.8% 23.4% REDUCING RELIANCE ON WHOLESALE FUNDING Targeting to be in line with peers o Reduced reliance on wholesale funding over the last two years 。 Sustained focus on deposits as an alternate to wholesale funding Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 MONEY MARKET WHOLESALE FUNDING / TOTAL WHOLESALE FUNDING 39.9% 38.7% 38.3% 37.7% 37.5% 37.4% 36.8% 35.6% 36.0% Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 FOCUS ON TERM FUNDING Reduced reliance on money market funding and termed out funding book Scotiabank® 34 54#35Liquidity Metrics Well funded Bank with strong liquidity • Liquidity Coverage Ratio (LCR) 。 Stable and sound management of liquidity 。 Net Stable Funding Ratio (NSFR) implementation date is January 2020 132% 127% Q4/16 128% 127% 126% 125% 125% 125% 124% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 • High Quality Liquid Assets (HQLA) 。 Efficiently managing LCR and optimizing HQLA $144 $140 $136 $138 $132 $128 $125 $127 $123 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Scotiabank® 35 55#36Corporate Social Responsibility Scotiabank®#37Corporate Social Responsibility Financial Knowledge Access to Finance 200 Our Priorities Diversity and Inclusion Investing in Young People Responsible Financing Climate Change 618 Maintaining Trust MEMBERSHIPS & ASSOCIATIONS MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM < ✓ CDP DRIVING SUSTAINABLE ECONOMIES TCFD ANGIORAL C THE GLOBAL COMPACT TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES 900,000 Canadian students participated in Talk With Our Kids About Money day in 2018 34% women in leadership positions (VP+) globally in 2018 Named as a Top 100 Company in 2018 by Thomson Reuters Diversity & Inclusion index Our Achievements $80 Million in donations globally in 2018 to support the communities we operate in Joint Lead Manager on $1 Billion World Bank Sustainable Development Bond to support women and youth Internal Carbon Price set at $15/tonne CO₂ reinvested in energy efficiency initiatives Achieved recognition on the 2018 Dow Jones Sustainability Index North America Our Ability United Nations Global Compact EQUATOR PRINCIPLES CP CARBON PRICING LEADERSHIP COALITION We have financial expertise 97,000+ employees We have the reach We have the resources FINANCE UNEP INITIATIVE 25 Million+ customers around the globe $998 Billion in assets EURONEXT vige eiris INDICES WORLD 120 Scotiabank® 37#38Appendix 1: Bail-in and TLAC Scotiabank®#39Overview of Canadian Bail-in Regulations Introduction • In effect since September 23, 2018 • Canada's resolution authority is Canada Deposit Insurance Corp (CDIC) • Bail-in framework provides CDIC the statutory power to convert certain eligible debt into common equity to recapitalize a non-viable DSIB Supplements existing NVCC framework and other resolution tools 。 Several tools available including bail-in and restructuring the bank 。 Goal to return the bank to viability Applies to six Canadian DSIBs, including Scotiabank Bail-In Basics A statutory conversion power that allows for the permanent conversion of eligible shares and liabilities of a non-viable bank into common shares, incremental to OSFI's conversion of NVCC Bail-in conversion would occur in the context of an open bank; the bank remains open and operating and continuing to provide critical services to its customers CDIC has flexibility to determine: Quantum of conversion - portion of bail-in debt to be converted into common shares Timing of conversion - if it will take place immediately or over a period of time Process for converting - if conversion will take place in one or more steps CDIC must adhere to certain parameters Adequate recapitalization Order of conversion Equally ranking instruments Relative creditor hierarchy Scotiabank® 39#40Overview of Canadian Bail-in Regulations Scope of Bail-in Debt ⚫ Scope emphasizes operational feasibility, credibility and preserving access to liquidity in stress • What's in scope: o Issued, originated or renegotiated after September 23, 2018 o Long term (original term >400 days) o Tradeable and transferrable 。 Unsecured • What's not in scope: 。 Deposits 。 Most structured notes 。 Secured liabilities o Covered bonds 。 Derivatives Bail-in Outcomes Bank stays open and operating ⚫ DSIB is recapitalized with limited or no taxpayer support and able to re-access markets • Recoveries are consistent with relative hierarchy of claims (shared losses) 。 Significant dilution of original common shareholders through conversion of NVCC and Bail-in debt 。 New common shares issued to NVCC and Bail-in debt holders according to their relative rankings • No creditor worse off • Legacy (non-NVCC) instruments are not in scope but would be subject to other resolution tools to ensure that senior bail- in debt holders are better off than holders of legacy capital instruments Scotiabank® 40 40#41Bail-in Process Business as usual Good financial health Resolution Bail-in Conversion Heightened risk Financial difficulties ⚫ DSIB may implement recovery plan actions under OSFI oversight • CDIC may monitor and undertake necessary preparatory activities ⚫ DSIB may experience declining market confidence, credit rating downgrades and funding / capital raising challenges Point of non-viability • OSFI declares the DSIB non- viable • Minister of Finance has Federal Cabinet issue orders authorizing CDIC to assume temporary control or ownership of the DSIB and to execute a Bail-in conversion • Resolution weekend CDIC takes control / ownership of the DSIB • OSFI triggers NVCC conversion • Management and Board of DSIB replaced if necessary Stabilization / restructuring CDIC exits • 1-week to 1- year timeframe • Common shares resulting from NVCC and BID conversion are issued (voting rights suspended) Execution of restructuring plan Liquidity support if necessary • 1 to 5-year timeframe • Voting rights are resumed ⚫ "No creditor worse off" determination and payment of compensation Scotiabank® 41#42Overview of Canadian Bail-in Regulations Compensation Regime ⚫ No creditor worse off: Creditors and shareholders are compensated where they have been made worse off than they would have been in a liquidation • Persons who hold the following claims at the time of entry into resolution are entitled to compensation: o Shares of the institution 。 Subordinated debt vested in CDIC at the time of entry into resolution 。 NVCC subordinated debt subsequently converted into common shares pursuant to contractual terms Liabilities subsequently converted into common shares pursuant to Bail-in power 。 Any liability of the institution if the institution was wound-up at the end of the resolution process 。 Any liability of the institution that was assumed by a CDIC- owned work-out company or bridge bank which was subsequently liquidated or wound-up • Compensation = liquidation value - resolution value • Right to compensation is not transferrable Resolution Tools • CDIC has a number of tools to assist or resolve a failing DSIB 1. Liquidation of the bank and reimbursement of insured deposits 2. Bank is placed under temporary CDIC control to complete its sale to a willing buyer (forced sale) via one of two approaches: О All shares are transferred to CDIC and it becomes the sole shareholder to facilitate the sale; or CDIC is appointed receiver to sell all or some of the assets and liabilities to the buyer Under both approaches, critical banking operations are maintained 3. Bank is placed under temporary CDIC control and CDIC transfers certain functions to a bridge bank which is temporarily owned by CDIC Meant to bridge the gap from when an institution fails and when a buyer or private-sector solution can be found о Critical banking operations are maintained 4. Bail-in regime Scotiabank® 42 42#43TLAC Requirements and Eligibility Two concurrent minimum TLAC compliance requirements by Q1/22 21.5% minimum risk-based TLAC ratio & 6.75% minimum TLAC leverage ratio TLAC eligibility Tier 1 and 2 regulatory capital as per CAR guideline + Bail-in debt • Eligibility criteria for bail-in debt to qualify as TLAC Subject to permanent conversion into common shares in whole or in part pursuant to CDIC Act Directly issued by Canadian parent operating company Not secured or covered by a guarantee of the issuer or related party Perpetual or have remaining term >365 days No acceleration rights outside of bankruptcy, insolvency, wind-up, liquidation or failure to make principal or interest payments for 30 business days or more Callable without OSFI prior approval if, following the transaction, the minimum TLAC requirement is satisfied By Q1/22, Scotiabank will exceed the minimum TLAC requirement (plus Domestic Stability Buffer requirement) based on maintaining current capital levels and refinancing upcoming senior maturities Scotiabank® 43#44Overview of Canadian Bail-in Regulations NVCC vs. Bail-in • NVCC are regulatory capital instruments other than common shares that are converted to CET1 at non-viability • Authorities would trigger NVCC only where there was a high level of confidence that the conversion plus additional measures would restore the viability of the bank • NVCC improves regulatory capital quality, not quantity 。 Conversion of NVCC increases CET1 but not total capital - a gap that Bail-in addresses • NVCC is a prerequisite to Bail-in Enhanced Disclosures ⚫ Bail-in debt will be subject to robust disclosure requirements to promote transparency, legal certainty and market discipline • Contractual terms must include a clause whereby investors expressly submit to the Canadian Bail-in regime notwithstanding any foreign law to the contrary Disclosures regarding Bail-in power are required in offering documents ⚫ DSIBS are not permitted to advertise or otherwise promote Bail-in debt, including in its name, to a purchaser in Canada as a deposit • Failure to meet these requirements would not exempt an issuance from being eligible for Bail-in Scotiabank® 44#45Appendix 2: Canadian Housing Market Scotiabank®#46Canadian Household Credit Growth Moderating Public policy changes are having their intended effects • Total household credit growing 4.4% in nominal terms in 2018, vs 2008 peak of 12% y/y • Consumer loans excluding mortgages (cards, HELOCs, unsecured lines, auto loans, etc.) are growing 4.4% in 2018, vs 11% in late-2007 • Mortgage credit growing 4.4% year-to-date, vs 2008 peak of 13% HOUSEHOLD CREDIT GROWTH CONSUMER LOAN GROWTH RESIDENTIAL MORTGAGE GROWTH 20 20 %, 3-month moving average 20 %, 3-month moving average %, 3-month moving average 18 18 16 15 y/y % yly % change 16 14 change 14 12 m/m% change, yly % 10 change 12 SA 10 10 8 5 8 6 CO m/m% change, SA 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Bank of Canada. 6 st 4 2 0 m/m% change, SA 4 2 0 -5 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Bank of Canada. 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Bank of Canada. Scotiabank® 46 46#47Household Debt: Canada vs. U.S. Canadian households' balance sheets compare favourably to those of their southern neighbours • In comparable terms, Canadian debt-to-income ratio is now 5.5% below the U.S. peak 。 In the last 7 years, increases in Canadian debt-to-income ratio have slowed vs. 2002-10 Calculated on the same terms, Canada's debt-to-income is currently 164% vs. 134% in the U.S. Canadian debt-to-assets ratio remains below U.S. o U.S. households have incentive to pursue higher asset leverage in light of mortgage interest deductibility o Debt is a stock concept, to be financed over one's lifetime. Income is a flow concept measuring one single year's earnings. Debt should be compared to lifetime or permanent income, or assets • Ratio of total household debt to GDP remains lower in Canada than U.S. 。 Calculated on a comparable basis, the ratio of household credit market debt is 98.2% in Canada vs. 101.3% in the U.S. Household Credit Market Total Household Liabilities Debt to Disposable Income 30 180 household credit liabilities 169.1 as % of disposable income 160 163.6 25 140 120 100 80 133.8 20 Adjusted Canadian* 15 Official Canadian Official US 60 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 10 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. As % of Total Assets household debt as % of assets US Household Credit Market Debt to GDP 130 % of GDP 120 110 US with unincorporated business debt 102.7 100 68 .*Original Canada 101.3 98.2 Canada* 90 18.0 80 70 10 Canada 16.7 560 75.1 Original US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Federal Reserve Board, Statistics Canada. 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. Scotiabank® 47#48Canadian Mortgage Market Less than half of households have a mortgage or a HELOC ⚫ Mortgage holders о Less than 50% of Canadian households have exposure to a mortgage and/or a HELOC 。 Negligible number of negative equity mortgages in Canada о о 91% of all homeowners have equity ratios of 25% or higher. Significant price decreases required to reach a negative equity position High share of equity: average equity ratio is 74% (excluding HELOCs) Approximately half of first-time home buyers in Canada are able to source their down payments from their personal savings ⚫ 2014-17 data show 79% of buyers from that period have 25% or more equity o Reflects speed of rising house prices, increased down payment requirements and tightened mortgage rules • 2014-17 data indicate only 42% of first-time home buyers had less than 20% down More than 50% of Households Do Not Have a Mortgage or HELOC 45 % of households, 2017 40 10.6 with HELOC 35 30 25 20 32.0 15 30.7 22.8 10 10 5 0 3.4 Owned dwelling Owned dwelling w/ mortgage w/o mortgage Sources: Scotiabank Economics, Mortgage Professionals Canada. Rented High Percentage of Equity (real estate equity as % of real estate assets) Efforts to cool the housing market are working, which implies moderating price appreciation 80 % Official (excludes HELOCS) 75 70 Cda estimate including HELOCS 65 US estimate 60 with NFPs excluding HELOCS 55 50 45 40 445 Official FRB with NFPs (includes HELOCs) 35 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, OSFI, FCAC, Statistics Canada, Federal Reserve Board. Scotiabank® 48 42#49Canadian Housing Fundamentals Remain Sound Solid indicators on several dimensions INTERNATIONAL IMMIGRATION 290 240 190 140 2018 Target = 310K чий % OF DISPOSABLE INCOME TOTAL DEBT-SERVICE RATIO 16 15 14 13 1990-2017 average 12 11 10 NUMBER OF IMMIGRANTS TO CANADA, 000S RATIO 90 95 00 05 10 15 Sources: Scotiabank Economics, Statistics Canada. RESIDENTIAL UNIT SALES TO NEW LISTINGS RATIO 1.0 0.8 0.6 0.4 0.2 0.0 سلہ Sellers' Market Balanced Market Buyers' Market 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, CREA MLS. Data through September 2018. % OF MORTGAGES IN ARREARS νε S MONTHS OR MORE www 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Statistics Canada. Data through 2018Q2. RESIDENTIAL MORTGAGES ARREARS 0 CO 5 + 3 2 0 U.S. Canada 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, CBA, MBA. Data through 2018Q3 (US) and June 2018 (Canada). Scotiabank® 49#50Households Can Sustain Higher Rates Real interest rates are still negative and will turn only mildly positive in 2019 • Scotiabank Economics expects the Bank of Canada to raise its target overnight rate an additional 125 bps by Q1/2020 • Average mortgage borrowers have only just begun renewing their loans at higher interest rates 6 8 % Further Rate Hikes Ahead from BoC & Fed 965432 1 0 93 98 Fed Funds Target Rate (Upper Limit) 03 forecast Вос Overnight Target Rate 08 13 18 Sources: Scotiabank Economics, Haver Analytics. Scotiabank® 50 50#51. Housing Policy Developments in Canada Consistent policy initiatives to maintain a balanced and sustainable market 2018 Ontario: Elimination of rent control on new rental units first occupied on or before November 1, 2018 ⚫ British Columbia: Extension of the Property Transfer Tax on non-resident buyers. Investment of more than $1.6 billion through FY2021 toward the goal of building 114,000 affordable housing units in the next 10 years • Canada: OSFI imposes more stringent stress tests for uninsured mortgages, including a minimum qualifying rate at the greater of the five-year fixed posted rate or the contractual rate plus 200 bps, effective January 1, 2018 • 2017 Ontario: 16 measures aimed to slow rate of house price appreciation Key aspects include: 。 15% non-resident speculation tax Expanded rent control to all private rental units in Ontario 。 Vacant home tax 。 $125 million five-year program to encourage construction of new rental apartment buildings • • 2016 Canada: Qualifying stress rate for all new mortgage insurance must be the greater of the contract mortgage rate or the Bank of Canada's conventional five-year fixed posted rate Low-ratio mortgage insurance eligibility requirements updated for lenders wishing to use portfolio insurance: 。 Maximum amortization 25 years o $1 million maximum purchase price o Minimum credit score of 600 。 Property must be owner occupied Elimination of primary residence tax exemption for foreign buyers • Minimum down payment on insured mortgages on homes valued $0.5-$1 million increased from 5% to 10% • British Columbia: 15% land transfer tax on non-resident purchases in Metro Vancouver introduced Scotiabank® 51 554#52Housing Market Differences vs. U.S. Canada's housing market features distinct practices and policies Regulation and Taxation Product Underwriting Canada Mortgage interest not tax deductible Full recourse against borrowers in most provinces Foreclosure on non-performing mortgages - no stay periods Insurance Mandatory default insurance mortgages with LTV >80% CMHC backed by Government of Canada (AAA). Private insurers are 90% government backed o Insurance available for homes up to $1 million o Premium is payable upfront O Covers full amount for life of mortgage Homebuyers must qualify for mortgage insurance at an interest rate that is the greater of their contract mortgage rate or the Bank of Canada's conventional five-year fixed posted rate Re-financing cap of 80% LTV on non-insured mortgages Amortization Maximum 25-year amortization on mortgages with LTV > 80% Maximum 30-year amortization on conventional mortgages Down payment of > 20% required for non-owner occupied properties Conservative product offerings, fixed or variable rate options Much less reliance upon securitization and wholesale funding Asset-backed securities not subjected to US-style off-balance sheet leverage via special purpose vehicles • Terms usually 3 or 5 years, renewable at maturity Extensive documentation and strong standards U.S. • Tax-deductible mortgage interest creates incentive to borrow and delay repayment ⚫ Lenders have limited recourse in most states • 90-day to 1-year stay period to foreclose on non-performing mortgages • • No regulatory LTV limit Private insurers are not government backed • Can include exotic products (adjustable rate mortgages, interest only) 30-year term most common • Wide range of documentation and underwriting requirements Scotiabank® 52 52#53Appendix 3: Key Market Profiles Scotiabank®#54Canadian Economy and Financial System Stable economy with sound financial system • . CANADIAN ECONOMY The 10th largest economy in the world, with an outward orientation Economy diversified, with particular strength in services, primary industries, manufacturing, construction, and utility sectors Proactive government and central bank that have begun unwinding exceptionally accommodative monetary policy Manageable government deficits and debt burdens Strong growth outlook, with firm commodity prices, resilient consumer activity, and solid U.S. demand for Canadian goods and services STRONG FINANCIAL SYSTEM Effective regulatory framework o Principles-based regime Single regulator for major banks 。 Conservative capital requirements 。 Proactive policies and programs Risk-management practices 。 Prudent lending standards 。 Few sub-prime mortgages 。 Relatively little securitization Primarily originate-to-hold model Canadian banks well-capitalized and profitable Scotiabank® 54 54#55% OF GDP Canadian Economy Diverse economy with a strong balance sheet 19.9%- Finance, Insurance, & Real Estate 14.3% Other 4.5% Transportation & Warehousing 5.6% Professional, Scientific, & Technical Services 6.2% CANADIAN GDP BY INDUSTRY (AUG 2018) Public Administration -11.8% Health & Education -11.3% Wholesale & Retail Trade -10.4% Manufacturing -8.9% Mining and Oil & Gas Extraction -7.0% Construction GENERAL GOVERNMENT NET FINANCIAL LIABILITIES 127.2 128.1 87.3 76.1 80.3 66.9 36.6 24.8 % OF GDP ANNUAL % CHANGE REAL GDP GROWTH 2 3 US 2000-2016 Canada Eurozone 2018f-2019f UK Japan Sources: Scotiabank Economics, Haver Analytics, Statistics Canada. Forecasts as of October 15, 2018. GOVERNMENT FINANCIAL DEFICITS 3 2 1.0 (0.6) (1.1) (1.8) (2.3) (2.6) (3.8) (4.3) -4 -5 Canada Germany OECD France US UK Italy Japan Germany OECD* Canada UK Italy France US Japan Sources: Scotiabank Economics, OECD (2017 estimates). As of May 2018. * Arithmetic mean of all OECD Financial Deficits as a % of GDP. Sources: Scotiabank Economics, IMF (2017 estimates). As of October 2018. Scotiabank® 55#56Stable Economic Fundamentals Low unemployment rate reflects solid growth in Canadian economy UNEMPLOYMENT RATE 14 12 10 6 4 2 0 Canada - official US Canada comparable to US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2018. • Strengthening economic growth and a gradual rebound in non-energy exports Household spending remains buoyant, underpinned by relatively low and stable unemployment, as well as low borrowing costs Population and labour force growth . supported by increasing immigration Stable inflation within Bank of Canada target band HEADLINE INFLATION 6 Canada Bank of Canada Target Inflation Band (%) LABOUR FORCE PARTICIPATION RATE 64 62 22 22% 70 68 66 US -2 60 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through September (Canada) and October 2018 (US). Canada US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2018. Scotiabank® 56#57USMCA: Preserves Access to U.S. Market Scotiabank is committed to long-term growth across the Pacific Alliance Key Features of NAFTA 2.0 。 Autos. Maintains integrated supply chains for vehicle and parts manufacturing across North America. Both Canada and Mexico would be shielded from any US move to impose so-called 'national security' Section 232 tariffs on automobiles. Mexico has negotiated an additional cushion to the transition to the new tighter auto rules of origin that maintains tariff- free access for 1.6MM vehicles a year under NAFTA's existing terms ○ Agriculture. Limited increases in bilateral access to specific commodity markets 。 Natural resources. Recent Mexican oil reforms institutionalized in the agreement, while US claims under NAFTA on a proportionate share of Canadian oil shipments is ended 。 Sunset clause. No automatic expiry. Agreement will be reviewed every six years with 10 ensuing annual reviews to address outstanding concerns 。 Dispute settlement. Existing state-state dispute-settlement mechanisms under NAFTA's chapters 19 and 20 preserved; investor protections under NAFTA's chapter 11 maintained between US and Mexico; bilateral Canada-Mexico issues covered by CPTPP. 。 IP. Extends patent and copyright protections in Canada and Mexico in line with previous understandings under draft TPP 。 Government procurement. No intensification of 'Buy American' rules 。 Visas. No change in NAFTA visa framework • Next steps 。 Signing expected in late 2018. Side letters that shield Canada and Mexico from Sec. 232 auto tariffs become active o Ratification process in US could take six months or more. Any demands for changes likely to be handled in side letters o In Mexico and Canada, the legislative process should be completed within a few months • Implications for the Pacific Alliance 。 Little impact expected on Peru, Chile, or Colombia 。 Canada and Mexico will continue to pursue their trade diversification agendas with the members of the Alliance. Article 32.10 should not impede negotiation of future trade agreements with so-called 'non-market economies' Scotiabank® 44 57#58Economic Outlook In Key Markets Growth expected to accelerate across the Pacific Alliance 2018 AND 2019 REAL GDP GROWTH FORECAST (%) Real GDP (Annual % Change) Country 2000-17 Avg. 2018F 2019F 2020F Mexico 2.2 1.8 2.1 2.4 Peru 5.0 3.7 4.0 4.1 Chile 3.9 3.9 3.2 3.2 Colombia 3.9 2.5 3.5 3.6 PACS Avg. 3.8 3.0 3.2 3.3 2000-17 Avg. 2018F 2019F 2020F Canada 2.2 2.1 2.2 1.8 U.S. 2.0 2.9 2.4 1.7 Source: Scotiabank Economics. Forecasts as of October 15, 2018. Scotiabank® 58#59Focused on the Pacific Alliance Attractive growth opportunity for Scotiabank Pacific Alliance 。 Portfolio of high quality growth markets for Scotiabank ○ 223 million people with median age of 29 O Largest trading partner is the United States (64% of exports) О Largest sector is manufacturing (64% of exports) 。 Trade bloc with free trade agreements to liberalize commerce and improve integration • Supports trade flows with Asia in order to compete with Brazil and Argentina which participate in Mercosur 。 Accounts for 36% of Latin America's GDP, comparable to Brazil 。 Canada has bilateral free-trade agreements with all four Pacific Alliance countries and it has initiated an application for Associate Membership in the Alliance • Pacific Alliance is an Attractive Long-Term Opportunity o Region is the 6th largest goods exporter in the world 。 Trade bloc with governments supporting growth/significant infrastructure spending 。 Solid GDP growth rates relative to peers 。 Considerable room to increase banking penetration (avg. domestic credit/GDP of 66%) 。 Fast-growing middle-class with increasing financial demands 。 Favourable demographics for banking needs 。 Relatively stable legal, tax, and regulatory infrastructure in place o Central bankers have earned credibility and banking system is well-capitalized 59 Scotiabank® 59#60Mexican Economy Diverse economy with a strong balance sheet • The Mexican economy reflects a solid mix of commodities, goods production, and services. Trade remains dominated by the US, but Mexico's diversification agenda is underpinned by 13 free-trade agreements with 47 countries that account for 40% of global GDP Despite NAFTA-related uncertainty, investment has rebounded in 2018 and trade has returned to making a positive contribution to economy- wide growth Contributions to Mexican GDP Growth 16.0% Finance, Insurance, & Real Estate 16.0% Other 3.2% Natural Resources 5.8% Health & Education MEXICAN GDP BY INDUSTRY (Q2 2018) 6.5% Transportation 1.9% & Warehousing Professional, 3.9% Scientific, & Technical Public Services Administration Top 5 Trading Partners 17.4% Wholesale & Retail Trade 15.9% Manufacturing 6.3% Mining and Oil & Gas Extraction 7.0% Construction 5 y/y % change 4 3 2 1 0 -1 -2 -3 16 Other Net Exports Inventories Investment Government Consumption Real GDP 17 Sources: Scotiabank Economics, Haver Analytics. 18 Others 21% Germany 3% Japan 3% United Canada 4% States 59% China 10% Scotiabank® 60 60#61Chilean Economy Advanced economy with wide-ranging trade links Chile's mix of economic activities reflects its status as an advanced market economy Chile's diversified trading relationships are supported by 21 free-trade agreements with 59 countries that account for 70% of global GDP Investment has been a strong contributor to growth in Chile over the past year, which should underpin future productivity gains. 15.1% Finance, Insurance, & Real Estate 8.9% Other 1.9% Restaurants & Hotels 8.4% Transportation & Warehousing 3.5% Natural Resources CHILEAN GDP BY INDUSTRY (JUN 2018) 19.1% Housing & Personal Services 9.6% Wholesale & Retail Trade -10.3% Manufacturing .12.4% Mining and Oil & Gas Extraction 6.2% Construction 4.6% Public Administration 8 y/y % change 6 4 2 0 -2 -4 -6 16 Contributions to Chilean GDP Growth 17 Sources: Scotiabank Economics, Haver Analytics. Net Exports Inventories Investment Government Consumption Real GDP 18 Top 5 Trading Partners Others 40% China 27% United States South Korea 4% 16% Japan Brazil 6% 7% Scotiabank® 61 199#62Peruvian Economy Resilient economic fundamentals • Peru's important resource sectors are increasingly balanced by stronger service-sector activity and solid economic fundamentals Peru has 16 free-trade agreements with 49 countries that account for 66% of global GDP Investment is making a consistently strong contribution to GDP growth, which should make the recent upturn in growth rates more sustainable 13.7% Manufacturing 9.4% Finance, Insurance, & Real Estate 29.9% Other PERUVIAN GDP BY INDUSTRY (Q2 2018) 19.7% Transportation, Information & Commerce 5.5% Construction 14% 7.7% Mining & Energy Natural Resources Contributions to Peruvian GDP Growth 8 y/y % change 6 4 2 0 Top 5 Trading Partners China 26% Others 44% -2 -4 Net Exports Inventories Investment United States Government 18% Consumption -6 Real GDP South Korea 16 17 18 Sources: Scotiabank Economics, Haver Analytics. 3% Spain Brazil 4% 5% Scotiabank® 62 62#63Colombian Economy Gaining momentum . Services account for a rising share of Colombian GDP compared with traditional strengths in extractive industries Colombia continues to build on its 10 free-trade agreements with 42 countries that account for 38% of global GDP Rising consumption, supported by public spending, reflects an expanding middle class as growth gains momentum and converges toward the economy's underlying potential 14.1% Finance, Insurance, & Real Estate 6.8% Other 6.5% Natural Resources 2.9% Information & Communication 2.6% Arts & Entertainment COLOMBIAN GDP BY INDUSTRY (Q2 2018) 7.5% Professional, Scientific, & Technical Services 17.4% Wholesale, Retail Trade, Accommodation & Food Services 12.2% Manufacturing 8.2% Mining and Oil & Gas Extraction -15.2% 6.6% Construction Public Administration Top 5 Trading Partners Contributions to Colombian GDP Growth 5 y/y % change 4 3 2 United States Others 29% 44% 1 0 -1 -2 -3 16 17 Real GDP 18 Other Net Exports Investment Government Consumption Germany China 14% Brazil Mexico 3% Sources: Scotiabank Economics, Haver Analytics. 4% 6% Scotiabank® 63 80#64Other Regions Strong contribution from leading C&CA franchise and portfolio investments in Asia Caribbean & Central America 。 Operations in 16 countries contributing ~$0.7B in earnings in 2018 。 Well-established, diversified franchise that serves retail, commercial and corporate customers 。 Actively managing footprint to ensure scale in larger growth markets and reduce risk profile: Announced acquisition in Dominican Republic in August 2018 which doubles customer base and creates 4th largest bank. Announce sale of operations in 9 smaller countries in Caribbean in November 2018 Recognized by Euromoney for the "Best Commercial Banking" capabilities in the Caribbean and Bahamas (2017) o Recognized by Global Finance Magazine as: • Asia "Best Bank Award 2017" in the Bahamas, Barbados, Costa Rica, Turks & Caicos and U.S. Virgin Islands; "World's Best Consumer Digital Bank 2017" in 24 countries across Latin America and the Caribbean; and "Best in Mobile Banking" in the Caribbean region 。 Strategic portfolio investments in Asia 。 Thailand: 49% interest in Thanachart Bank (2007) $3.0 billion carrying value as of October 31, 2018 $590 million of net income for twelve months ended October 31, 2018 。 China: 19.9% interest in Bank of Xi'an (2009) $772 million carrying value as of October 31, 2018 $456 million of net income for twelve months ended October 31, 2018 Scotiabank® 64 -#65Appendix 4: Covered Bonds Scotiabank®#66Global Registered Covered Bond Program CAD$36 billion global covered bond program • Active in multiple currencies: USD, EUR, GBP, AUD and CHF • Extensive regulatory oversight and pool audit requirements • Mandatory property value indexation • Established high level of safeguards and disclosure requirements • Program carries the ECBC Covered Bond Label Issuer The Bank of Nova Scotia Guarantor Guarantee Status Program Size Ratings Cover Pool Asset Percentage Law Issuance Format Scotiabank Covered Bond Guarantor Limited Partnership Payments of interest and principal in respect of the covered bonds are irrevocably guaranteed by the Guarantor. The obligations under the Covered Bond Guarantee constitute direct obligations of the Issuer and are secured by the assets of the Guarantor, including the Portfolio. The covered bonds will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and will rank pari passu with all deposit liabilities of the Bank without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future. CAD $36 billion Aaa/AAA/AAA (Moody's / Fitch / DBRS) First lien uninsured Canadian residential mortgage loans with LTV limit of 80% 94.8% (5.5% minimum overcollateralization) Ontario, Canada 144A/Reg S (UKLA Listed) Scotiabank® 66 99#67Global Registered Covered Bond Program1 CAD$36 billion global covered bond program LOAN-TO-VALUE RATIOS² CREDIT SCORES 43% 29% 56% 22% 4% 7% 20% 13% 1% 1% 2% 0-20% 20-40% 40-60% 60-80% 80+% <599 600-650 651-700 701-750 751-800 800< REMAINING TERM DISTRIBUTION (MONTHS) 35.9% 24.8% 12.8% Alberta 0.2% Yukon 2.6% Saskatchewan 7.9% PROVINCIAL DISTRIBUTION 17.1% 9.3% 7.9% Quebec 5.0% <12 12-23.99 24-35.99 36-41.99 42-47.99 48< 0.3% P.E.I. 51.7% 1 As at October 31, 2018 2 Uses indexation methodology as outlined in Footnote 1 of the Scotiabank Global Registered Covered Bond Monthly Investor Report Ontario 18.0% British Columbia 1.3% Manitoba 1.2% New Brunswick 1.8% Newfoundland 2.3% Nova Scotia Scotiabank® 67 20#68Canadian Legislative Covered Bonds (CMHC Registered) • Canadian Registered Covered Bond Programs' Legal Framework (Canadian National Housing Act) Issuance Framework Eligible Assets Mortgage LTV Limits Basis for Valuation of Mortgage Collateral Substitute Assets Substitute Assets Limitation Cash Restriction . • Coverage Test • . Credit Enhancement • Swaps Market Risk Reporting Covered Bond Supervisory Body Requirement to Register Issuer and Program Registry • Disclosure Requirements Canadian Registered Covered Bond Programs Guide issued by Canada Mortgage and Housing Corporation (CMHC) Uninsured loans secured by residential property in Canada LTV limit of 80% Issuers are required to index the value of the property underlying mortgage loans in the covered pool while performing various tests Securities issued by the Government of Canada Repos of Government of Canada securities having terms acceptable to CMHC 10% of the aggregate value of (a) the loans (b) any Substitute Assets and (c) all cash held by the Guarantor The cash assets of the Guarantor cannot exceed the Guarantor's payment obligations for the immediately succeeding six months Asset coverage Test Amortization Test Overcollateralization Reserve Fund Prematurity Liquidity Covered bond swap, forward starting Interest rate swap, forward starting Valuation calculation Mandatory property value indexation • CMHC • Yes; prior to first issuance of the covered bond program Yes Monthly investor report with prescribed disclosure requirements set out by CMHC Investor reports must be posted on the program website Required to meet applicable regulatory disclosure requirements Scotiabank® 68#69Notes Scotiabank® 69#70Contact Information Investor Relations Philip Smith Senior Vice President 416-863-2866 [email protected] Steven Hung Vice President 416-933-8774 [email protected] Lemar Persaud Director 416-866-6124 [email protected] Funding Andrew Branion Executive Vice President & Group Treasurer 416-933-7458 [email protected] Tom McGuire Senior Vice President & Deputy Treasurer 416-860-1688 [email protected] Michael Lomas Dave Tersigni Managing Director, Treasury Sales and Market Development 416-866-5734 Managing Director, Senior Funding 416-863-7080 [email protected] [email protected] Christy Bunker Managing Director, Alternate Funding 416-933-7974 [email protected] For further information, please contact: www.scotiabank.com/investorrelations Judy Lai Director 416-775-0485 [email protected] Scotiabank® 70 0