#11 2 Investor Presentation February 29, 2000 Scotiabank Performance Review Sabi Marwah Executive Vice-President & Chief Financial Officer#23 • • • Performance Highlights Solid earnings momentum EPS up 14% year-over-year ROE 15.9% vs. 14.8% Productivity 58.6% Improved performance in Retail & Commercial Strong capital ratios and reserves • Stable asset quality Solid Earnings Momentum Net Income, $ millions 400 300 200 100 4 Scotiabank EPS, $ 0.75 0.50 0.25 0 0.00 Q1/98 Q3/98 Q1/99 Q3/99 Q1/00 Scotiabank#3Diversification: Higher % of Core Retail & Commercial % of net income* January 31, 1999 January 31, 2000 37% 38% 52% 44% 11% Domestic Retail/Commercial 18% International Scotia Capital Scotiabank * excludes smaller operating segments & Corporate Adjustments 5 Steady Growth in Revenues $ millions Q1/00 Q1/99 change change Net interest (TEB) 1,202 1,218 (16) (1)% Other income* 822 730 92 12% Total revenues 2,024 1,948 76 4% * Excludes: special gain ($77MM, Q1/99) 6 Scotiabank#4Solid Growth in Fee Income Change Q1/00 vs. Q1/99 $MM % Investment Management & Trust $33 22% Credit Fees 34 27 Securitization revenues 26 90 90 Foreign Exchange (other than trading) 9 25 Institutional/Underwriting (9) (16) Securities Gains/Trading/Other (1) $92* 12% * Excludes: special gain of $77MM in Q1/99 7 Scotiabank Continued Productivity Leadership expenses as a % of revenues* 60 50 80 58.6% Q1/99 Q2/99 Q3/99 Q4/99 Q1/00 * Q1/99 excludes special gain of $77MM Scotiabank#5Capital Ratios - Strengthened Significantly % of risk-adjusted assets 9 10 LQ 5 0 10.6 11.7 Total 8.0 Tier 1 7.2 6.1 6.9 Common Equity Q1/99 Q1/00 Scotiabank Higher General Provision & Securities Surplus $ billions 2.0 1.5 $1.0 1.0 0.5 $1.9 Securities Surplus General Provision 0.0 Q1/99 Q1/00 10 Scotiabank#611 200 150 Business Line Results Bruce Birmingham President Domestic - earnings up 13% Net Income*, $ millions • • 100 • 50 12 Q1/99 Q1/00 * includes Wealth Management Mortgages up 8% Credit cards up 11% • Strong fee growth ➤ retail brokerage up 34% Continued deposit growth - personal deposits up 6% ➤ current accounts up 16% market share increase Scotiabank#7Domestic Franchise Initiatives underway ⚫ Forms-free teller in 700 branches completion by June 2000 SERVICIO • Sales and service focus - 90 branches to date increased sales, higher customer retention ⚫ New product packages A Scotia One Service, Scotia Line Visa • Streamline operations, reduce costs Staffing down 1,350 year/year 13 Scotiabank Develop Electronic Banking & e-commerce 14 Business → Consumer . Electronic wallet . "Smarty" - download cash electronically Wireless banking - enhance functionality A mobile terminals, pagers, cell phones Online customer growth - up 95% year-over-year Business Business • Scotiabank & Microsoft A Scotia Web store Identrus - consortium of international banks ➤ secure infrastructure for trade on Internet Scotiabank#815 16 Strong Growth in Wealth Management Q1/00 vs. Q1/99 % change Retail brokerage fees 34% Total Wealth Management revenues 26% Discount brokerage trades 80% Full service managed accounts 45% Personal Trust new sales 63% 70% of Scotia Funds in 1st or 2nd quartile Scotiabank Integrating Wealth Management Strengths A leader in personal trust & Private Client Investment Management Large full-service brokerage sales force Strong branch distribution - mutual funds New organization structure Progress on integration initiatives: sales forces, Internet platform, high-end offerings New products . 2 index mutual funds, US Stock-indexed GIC Scotiabank#975 50 50 25 25 17 International - Better Results in 2000 Net Income, $ millions Q1/99 Q1/00 Asia & Latin America Caribbean • Continued strong • returns in Caribbean ⚫ Profitability improving in Asia and Latin America Caribbean - Market Leader Dominant market presence 25 countries ➤ $14B in assets ➤ 240+ branches ➤ 265+ ABMS • Leveraging products & skills ➤ sales & service delivery new mortgage program ➤ ScotiaLine roll-out ➤ stock market deposits U.S. & local currencies ➤ roll out Central Accounting Units 18 Scotiabank Scotiabank#10Latin America - Foundation for Long-Term Earnings Growth • Mexico: A Finalize Inverlat within next 3 months Adding branches & ATMs New senior executive to run Casa de Bolsa Argentina: A Reinvesting in Scotiabank Quilmes ➤ Infilling branch network ervicio al Client • Chile: 19 Taken control of Banco Sud Americano - 61% Installed new management team - 8 Scotiabankers Regained #1 rating from regulator Asia Broad Network & - Improving Profitability 20 20 • India Scotiabank Countries: 13 9 offices & branches ScotiaMocatta success High ROE • Japan Ripplewood finalized • Taiwan Refocused on trade finance Other new locations break-even after 1st year Scotiabank#11Scotia Capital Net Income, $ millions 250 200 Special Gains 150 100 21 22 50 0 Q1/99 Q1/00 • Credit fees continue strong • Wider margins · Lower underwriting & trading Risk Review Dennis Belcher Executive Vice-President Scotiabank#1223 24 Risk Management: Overview • Asset quality stable • • - negative net impaired loans Chile reserved at 114% Specific provisions: < $540 million for 2000 General provision unchanged at $1.3 billion Change in Gross Impaired Loans $ millions Scotiabank Q1/00 vs. Q4/99 Q1/99 Canada Retail 6 (65) - Commercial 6 (101) International 114 156 Scotia Capital (135) (2) Change (9) (12) Chile 121 121 Scotiabank#13Negative Net Impaired Loans $ billions % of loans & acceptances 2 1.5% 1.5 1 0.5 0 2 1.5 0.7% 1 0.5% 0.3% 0.5 (0.1)% (0.1)% -0.5 -0.5 1995 1996 1997 1998 1999 Q1/00 25 Scotiabank Steady Provisioning Over Past 5 Years specific provisions $ millions as % of loans & acceptances 0.4 600 500 400 300 200 100 0.3 0.2 0.1 0 0 1996 1997 1998 1999 2000 (E) 26 Scotiabank#1422 27 Summary Bruce Birmingham Business objectives for 2000 Domestic A Focus on top-line revenue growth Grow Electronic Banking & Wealth Management Streamline operations, reduce costs International Build on dominant position in Caribbean ➤ Focus on Mexico, Argentina & Chile Scotia Capital Reap benefits from "Scotia Capital" integration 28 Scotiabank#15Key performance targets for 2000 • Increased earnings: 12-15% Higher ROE: 16%+ • Enhanced productivity: <60% 29 29 Scotiabank This presentation includes forward-looking statements about objectives, strategies, and expected financial results. Such forward-looking statements are inherently subject to risks and uncertainties beyond the Bank's control, including but not limited to economic and financial conditions globally, regulatory developments in Canada and elsewhere, technological developments, and competition. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements, and the reader is cautioned not to place undue reliance on such forward-looking statements. 30 Scotiabank