#1INVESTOR PRESENTATION FOURTH QUARTER 2017 Scotiabank®#2CAUTION REGARDING FORWARD-LOOKING STATEMENTS Our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe 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 2017 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 (including those in the area of risk management), 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," "anticipate," "intent," "estimate," "plan," "may increase," "may fluctuate," and similar expressions of future or conditional verbs, such as "will," "may," "should," "would" and "could." By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. Do not unduly rely on forward-looking statements, as a number of important factors, many of which are beyond the Bank's control and the effects of which can be difficult to predict, 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 and funding; significant market volatility and interruptions; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary policy; legislative and regulatory developments in Canada and elsewhere, including changes to, and interpretations of tax laws and risk-based capital guidelines and reporting instructions and liquidity regulatory guidance; changes to the Bank's credit ratings; operational (including technology) and infrastructure risks; reputational risks; the risk that the Bank's risk management models may not take into account all relevant factors; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; the Bank's ability to expand existing distribution channels and to develop and realize revenues from new distribution channels; the Bank's ability to complete and integrate acquisitions and its other growth strategies; critical accounting estimates and the effects of changes in accounting policies and methods used by the Bank as described in the Bank's annual financial statements (See "Controls and Accounting Policies-Critical accounting estimates" in the Bank's 2017 Annual Report) and updated by quarterly reports; global capital markets activity; the Bank's ability to attract and retain key executives; reliance on third parties to provide components of the Bank's business infrastructure; unexpected changes in consumer spending and saving habits; technological developments; fraud by internal or external parties, including the use of new technologies in unprecedented ways to defraud the Bank or its customers; increasing cyber security risks which may include theft of assets, unauthorized access to sensitive information or operational disruption; anti-money laundering; consolidation in the financial services sector in Canada and globally; competition, both from new entrants and established competitors; judicial and regulatory proceedings; natural disasters, including, but not limited to, earthquakes and hurricanes, and disruptions to public infrastructure, such as transportation, communication, power or water supply; the possible impact of international conflicts and other developments, including terrorist activities and war; the effects of disease or illness on local, national or international economies; and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements. For more information, see the "Risk Management" section of the Bank's 2017 Annual Report. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2017 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. The preceding list of factors is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank's results. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events. The forward-looking statements contained in this document are presented for the purpose of assisting the holders of the Bank's securities and financial analysts in understanding the Bank's financial position and results of operations as at and for the periods ended on the dates presented, as well as the Bank's financial performance objectives, vision and strategic goals, 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. Scotiabank® | 2#3TABLE OF CONTENTS Scotiabank Overview . Canada's International Bank 4 5 • • Well Diversified and Profitable Businesses Track Record of Earnings & Dividend Growth Why Invest In Scotiabank Strong Capital Generation and Position 6 • Key Strategic Priorities . Digital Transformation Strategy • Medium-Term Financial Objectives Business Line and Financial Overview • Canadian Banking Overview • • International Banking Overview Global Banking and Markets Overview Credit Performance by Business Lines Treasury and Funding Appendices • Appendix 1: Canadian Housing Market Appendix 2: Canada & International Economies • Appendix 3: International Overview • • Appendix 4: Covered Bonds Appendix 5: Corporate Social Responsibility Contact Information 7 8 9 10 11 12 13 16 23 28 32 33 45 53 58 62 66 68 Scotiabank® | 3#4SCOTIABANK OVERVIEW Scotiabank® 4#5CANADA'S INTERNATIONAL BANK High quality and well-balanced business operating within a clearly defined global footprint HISTORY Established on East Coast of Canada in 1832 In U.S. and Caribbean 125+ years Representative offices in Asia and Latin America since 1960's Began expanding Caribbean presence into Central and South America in 1990's. Focused on the Pacific Alliance countries of Mexico, Peru, Colombia and Chile Q4 2017 (C$) SCOTIABANK CREDIT RATINGS1 SCOTIABANK Moody's S&P Fitch DBRS Net Income $2.1B Senior Rating A1 A+ AA- AA ROE 14.5% Outlook Negative Stable Stable Negative Productivity Ratio 53.8% Covered Bonds Aaa Not Rated AAA AAA CET1 Risk Weighted Assets $376B CET 1 Capital Ratio² 11.5% Total Assets $915B STRONG PRESENCE IN ATTRACTIVE MARKETS Market Capitalization $100B # of Employees 88,645 1 A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revisions or withdrawals at any time. 2 Basel III "all-in" basis Scotiabank® | 5#6WELL DIVERSIFIED AND PROFITABLE BUSINESSES1 Diversified by products, customers and geographies, creating stability and lower risk 52% Canadian Banking 19% Global Banking and Markets BUSINESS LINE EARNINGS² $2.1B Pacific Alliance4 represents two thirds of International Banking earnings GEOGRAPHIC SEGMENT AVERAGE ASSETS3 $898B 1 Excludes Other segment 2 Three months ended October 31, 2017 3 Year ended October 31, 2017 4 Pacific Alliance includes Mexico, Peru, Colombia and Chile 29% International Banking 18% Other International 60% Canada 12% 10% U.S. Pacific Alliance4 Scotiabank® | 6#7TRACK RECORD OF EARNINGS & DIVIDEND GROWTH Stable and predictable earnings with steady increases in dividends EARNINGS PER SHARE (C$) 1,2 $3.05 +10% CAGR TOTAL SHAREHOLDER RETURN³ 19.0% 13.0% 22.2% 20.3% 12.6% 11.2% 9.0% 9.5% 08 09 10 11 12 13 14 15 16 17 Calendar YTD 1 Year 10 Years 20 Years BNS Big-5 Peers (Ex. BNS) DIVIDEND PER SHARE (C$) $0.37 97 98 99 00 01 02 1 Reflects adoption of IFRS in Fiscal 2011 2 Excludes notable items 3 As of October 31, 2017 80 03 60 = 04 95 05 06 90 +12% CAGR $3.05 40 07 08 09 10 11 12 13 14 15 16 17 Scotiabank® | 7#8WHY INVEST IN SCOTIABANK? Attractive growth potential across our footprint supported by strong risk culture DIVERSIFIED BY BUSINESS AND GEOGRAPHY PROVIDING SUSTAINABLE AND GROWING EARNINGS STRONG BALANCE SHEET WITH PRUDENT CAPITAL AND LIQUIDITY POSITIONS ATTRACTIVE GROWTH OPPORTUNITIES IN THE KEY PACIFIC ALLIANCE MARKETS CLEAR DIGITAL STRATEGY LEVERAGED ACROSS OUR FIVE KEY MARKETS ~80% of earnings from high quality and stable retail, commercial and wealth management businesses • Attractive growth potential of International, but with the strong risk management culture of Canada • Attractive dividend yield in the mid-single digits • Consistent record of dividend increases • . • . Strong risk culture, shown through industry leading capital levels Focused on growing the Bank's key markets of Mexico, Peru, Chile and Colombia, with a population of over 230 million Average age of 29, growing middle class and large portion of the young population is underbanked Higher GDP growth forecast compared to Canada and the U.S. Integrated Digital Banking Network with digital factories in each of our five key markets of Canada, Mexico, Peru, Chile and Colombia • Driver of internal innovation and our clear digital targets Attracting new talent and leadership on a global basis Scotiabank® 8#9STRONG CAPITAL GENERATION AND POSITION Capital levels are significantly higher than the minimum regulatory requirements CET1 RATIO +30 bps -16 bps 11.5% +2 bps +4 bps 11.3% Q3/17 Internal Capital Generation Business Growth RWA (ex. FX) Foreign Exchange Translation Other Q4/17 STRONG CAPITAL LEVELS 13.4% 1.9% 1.2% 14.6% 14.7% 14.9% 13.4% 1.8% 2.2% 2.2% 2.2% 1.4% 1.2% 1.6% 1.1% 11.0% 11.3% 11.5% 10.3% 10.1% Q4/15 Q2/16 Q4/16 Q2/17 Q4/17 CET1 AT1 Tier 2 Scotiabank® | 9#10KEY STRATEGIC PRIORITIES Clear and established strategic agenda to deliver value to shareholders STRONG RISK CULTURE We believe every customer has the right to become better off Deliver excellent Customer experience And Grow primary Customers Become more efficient while continuing to improve our customers' experience Balance sheet optimization and higher growth in high-yield products CUSTOMER FOCUS STRUCTURAL COSTS BUSINESS MIX LEADERSHIP DIGITAL TRANSFORMATION Build leaders to reflect the diversity of our customers Continue to develop our digital capabilities across the Bank to become a digital leader in all of our major markets Scotiabank® | 10#11DIGITAL TRANSFORMATION STRATEGY Digital is an enabler of the all-bank strategy and will improve our productivity ratio DIGITAL TRANSFORMATION STRATEGY Transactions in-branch Alignment Customer Experience Culture & Talent Technology Modernization Operational Efficiency DIGITAL VISION: PROGRESS UPDATE Digital Adoption 400 basis points improvement 200 basis points improvement Digital Sales PROGRESSING WELL in priority products Will improve All-Bank productivity ratio The Pulse 100% deployed in our 5 key markets 6 Scotiabank® | 11#12MEDIUM-TERM FINANCIAL OBJECTIVES Achievable objectives driven by strong operations across our footprint METRIC OBJECTIVES Q4 2017 RESULTS (Y/Y) FISCAL 2017 RESULTS (Y/Y) ALL BANK EPS Growth 5-10% 4% 8%1 ROE 14%+ 14.5% 14.6% Operating Leverage Positive 0.4% -0.2%1 Capital Maintain strong ratios 11.5% 11.5% OTHER FINANCIAL OBJECTIVES Dividend Payout Ratio 40-50% 48.2% 46.6% CANADIAN BANKING Net Income Growth 6-9% 12% 9% INTERNATIONAL BANKING Net Income Growth² 8-10% 8% 15% Adjusting for the Q2/16 restructuring charge of $278 million (after tax) or $378 million (before tax) 1 2 On a constant currency basis Scotiabank® | 12#13BUSINESS LINE AND FINANCIAL OVERVIEW Q4 2017 AND FISCAL 2017 Scotiabank® 113#14FISCAL 2017 FINANCIAL PERFORMANCE - ANNUAL Strong performance across all three business lines $MM, EXCEPT EPS 2017 Change¹ Net Income $8,243 +8% • Diluted EPS $6.49 +8% • Revenue $27,155 +3% Expenses $14,630 +3% Productivity Ratio 53.9% +20bps Core Banking Margin 2.46% +8bps • PCL Ratio 45bps -5bps NET INCOME¹ BY BUSINESS SEGMENT ($MM) +9% Y/Y +15% Y/Y +16% Y/Y 3,736 4,064 2,079 2,390 1,571 1,818 Canadian Banking International Banking Global Banking and Markets ■ 2016 2017 1 Adjusting for restructuring charge of $278 million after-tax ($378 million before-tax) in Q2/16 • ANNUAL HIGHLIGHTS1 Diluted EPS grew 8% Revenue up 3% 。 Asset growth and higher core banking margin 。 Banking, wealth management and insurance services 。 Lower trading and net gain on sale of businesses 。 Lower net gains on investment securities only partially offset by higher gains on sale of real estate Expense growth of 3% 。 Technology costs and professional fees 。 Employee-related costs and impact of acquisitions FY2017 operating leverage was flat 。 Structural cost transformation savings of approximately $500 million for the year, ahead of $350 million target 。 Savings contributed to low all-bank expense growth and enabled technology and digital investments 。 Strong positive operating leverage in Canadian Banking and International Banking, but lower non- interest revenues from Global Banking and Markets and Other ⚫ PCL ratio improved 5 bps 。 Lower energy related credit losses Scotiabank® | 14#15Q4 2017 FINANCIAL PERFORMANCE - QUARTERLY $MM, EXCEPT EPS Q4/17 Y/Y Q/Q Net Income $2,070 +3% -2% • Diluted EPS $1.64 +4% -1% • Revenue $6,812 +1% -1% Expenses $3,668 +1% Productivity Ratio 53.8% -30bps +50bps Core Banking Margin 2.44% +4bps -2bps PCL Ratio 42bps -3bps -3bps • DIVIDENDS PER COMMON SHARE +$0.02 +$0.03 • $0.74 $0.74 $0.76 $0.76 $0.79 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Announced dividend increase 1 Adjusting for restructuring charge of $278 million after-tax ($378 million before-tax) in Q2/16 YEAR-OVER-YEAR HIGHLIGHTS Diluted EPS grew 4% Revenue up 1% 。 Asset growth in retail and commercial lending o Higher core banking margin 。 Higher card revenues and net gains on investment securities 。 Partly offset by lower trading, lower fee and commission revenue from sale of HollisWealth and lower gains on sale of real estate Expense growth up 1% 。 Investments in technology, digital banking, and other initiatives 。 Higher employee-related costs o Partly offset by savings from structural cost transformation and impact from sale of HollisWealth PCL ratio improved 3 bps o Broad based improvement across all business lines ⑤Scotiabank® | 15#16CANADIAN BANKING OVERVIEW A leader in personal & commercial banking, wealth and insurance in Canada BUSINESS OVERVIEW 2018 PRIORITIES STRATEGIC OUTLOOK • Full suite of financial advice and banking solutions to retail, small business and commercial customers Investment, pension and insurance advice and solutions ⚫ Customer focus: Deliver a leading customer experience and deepen relationships with customers across our businesses and channels • Structural cost transformation: Reduce structural costs to build the capacity to invest in our businesses and technology to drive shareholder return . • Digital transformation: Leverage digital as the foundation of all our activities to improve our operations, enhance the client experience and drive digital sales Business mix alignment: Optimize our business mix by growing higher margin assets, building core deposits and earning higher fee income Leadership: Grow and diversify talent and engage employees through a performance-focused culture Solid Loan Growth: Expect solid loan growth across retail mortgages, auto lending, commercial loans, credit cards and deposits Margins: Stable to slightly increasing margins • Provisions for Credit Losses (PCL): Higher PCLs driven by change in business mix, but risk adjusted margin should remain stable Productivity: Improving productivity will continue to be an area of focus • • Strategic Priorities: Deepen primary relationships and strengthen customer experience, optimize business mix, focus on cost initiatives and drive digital transformation Scotiabank® | 16#17CANADIAN BANKING - ANNUAL Strong performance from retail and small business banking, commercial banking and wealth management FINANCIAL PERFORMANCE AND METRICS¹ ($MM) ANNUAL HIGHLIGHTS 2017 Revenue $12,851 Expenses 2016 Change $12,188 +5% • Net income up 9% $6,487 $6,324 +3% PCLS $913 $832 +10% Net Income $4,064 $3,736 +9% Productivity Ratio 50.5% 51.9% -140bps Net Interest Margin 2.40% 2.38% +2bps PCL Ratio 0.29% 0.28% +1bps NET INCOME¹ ($MM) AND NIM (%) 2.23% 2.38% 2.40% 4,064 3,736 3,344 FY15 1 Attributable to equity holders of the Bank FY16 FY17 • 。 Strong retail and small business banking, commercial banking and wealth management 。 Gain on sale of HollisWealth was lower than last year's gain on sale of a non-core lease financing business o Higher gains on sale of real estate offset by lower gain on sale of businesses Net interest margin up 2 bps 。 Retail margin expansion from recent rate increases Benefited from the run-off of lower spread Tangerine mortgages Expenses up 3% o Higher investments in digital and technology 。 Partially offset by savings realized from cost reduction initiatives and lower expenses from the sale of HollisWealth Operating leverage of +2.9% for the year Scotiabank® | 17#18CANADIAN BANKING – QUARTERLY - Strong loan growth, margin expansion and positive operating leverage FINANCIAL PERFORMANCE AND METRICS¹ ($MM) Q4/17 Y/Y Q/Q Revenue $3,265 +5% Expenses $1,629 +1% PCLS $218 -3% Net Income $1,067 +12% +2% Productivity Ratio 49.9% -190bps -10bps Net Interest Margin 2.41% +2bps PCL Ratio 0.27% -1bp -1bps . NET INCOME¹ ($MM) AND NIM (%) 2.39% 2.39% 2.38% 2.41% 2.41% • 1,045 1,067 • 954 981 971 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Attributable to equity holders of the Bank 2 Adjusted for the Tangerine run-off mortgage portfolio · YEAR-OVER-YEAR HIGHLIGHTS Net income up 12% 。 +7% was attributed to the HollisWealth gain Strong asset and solid deposit growth Loan growth of 6%, or 7%, adjusting for the Tangerine run-off mortgage portfolio o Residential mortgages up 6%² o Business loans up 13% Deposits up 3% NIM up 2 bps Driven by rising rate environment and changes in business mix PCL ratio improved by 1 bp Expenses up 1% 。 Higher investments in digital and technology o Partially offset by savings realized from cost reduction initiatives and lower expenses from the sale of HollisWealth Operating leverage of +2.9% for the year Scotiabank 18#19CANADIAN BANKING - REVENUE AND LOAN MIX Strong retail and growing commercial 18% Commercial 57% Retail REVENUE MIX1 $3.3B 1 For the three months ended October 31, 2017 25% Wealth 61% Residential Mortgage AVERAGE LOAN MIX1 $325B 15% Business and Government Loans 24% Personal and Credit Cards Scotiabank® 19#20CANADIAN BANKING: RETAIL EXPOSURES Retail loan portfolio ~93% secured: 81% real estate and 12% automotive Residential mortgage portfolio is well-managed 。 49% insured, and the remaining 51% uninsured has a LTV of 51% Credit card portfolio is approximately $7 billion, reflecting ~2.5% of domestic retail loan book or 1.3% of the Bank's total loan book o Organic growth strategy that is focused on payments and deepening customer relationships 。 ~80% of growth is from existing customers (penetration rate low-30s versus peers in the low-40s) 。 Strong risk management culture with specialized credit card teams, customer analytics and collections focus Auto loan book is approximately $34 billion 。 Market leader and portfolio is structurally different than peers with 7 OEM relationships (3 exclusive) o Prime Auto and Leases (~90%), driven by growth in assets o Lending terms have been declining with contractual terms averaging 72 months but effective terms are 48 months • Alberta retail loan book is approximately $41 billion or 15% of the domestic retail loan book 。 No signs of material credit stress or drawdown on lines Credit trends have moved up to/through national levels 。 Majority of exposure is residential mortgages 1 Includes Tangerine balances of $7 billion 4% DOMESTIC RETAIL LOAN BOOK $283B Unsecured 3% Credit Cards 81% Real Estate Secured Lending -12% Automotive ⑤Scotiabank® | 20#21CANADIAN BANKING: RESIDENTIAL MORTGAGE PORTFOLIO High quality and well managed portfolio Residential mortgage portfolio of $206 billion, of which 49% is insured, and an LTV of 51% on the uninsured book Scotiabank has 3 distinct distribution channels; Broker (>50%), Mobile Salesforce (~30%), and Branch (~20%) Mortgage business model is originate to hold New originations1 average LTV of 64% in Q4/17, with Ontario and BC at 63% Majority is freehold properties; condominiums represent approximately 13% of the portfolio 。 The mortgage portfolio is well managed and has good diversification across Canada with approximately half of the portfolio anchored in Ontario CANADIAN MORTGAGE PORTFOLIO³: $206B (SPOT BALANCES AS AT Q4/17, $B) $101.5 11.4 $180B (87%) Freehold O $26B (13%) Condominium 90.1 $36.1 8 $31.1 3.8 $16.0 28.1 27.3 1.8 14.2 $11.7 11.5 0.2 $9.4 8.7 -0.7 Ontario B.C. & Territories Alberta Québec Atlantic Provinces Manitoba & Saskatchewan % of 49% 18% 15% 8% 6% 5% portfolio 1 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® | 21#22TANGERINE OVERVIEW Canada's #1 Digital Bank 63 -95% -97% Industry Leading NPS Digital Onboarding Digital Transactions KEY STRATEGIC PILLARS . Compelling Value Proposition -90% Digital Sales Market-leading products that appeal to value-conscious Canadians • Empower Canadians to make smart financial decisions • Great rates, simple products, and no unfair fees Leading Client Experience Deliver a seamless digital Client Experience • Proactively meet evolving Client needs Industry-leading NPS with focus on simple and relevant experiences Operational Excellence • A low cost, scalable, digital approach Client-first service culture focused on increasing effectiveness Enhanced self-service options, adding convenience & simplicity Modern Platform 90 Scalable: Nimble, low cost systems provide a holistic client view without legacy issues. Speed & Agility Agile-Like: Rapid Development Cycles enable new product & feature delivery quickly and efficiently. Conscious Self-D -Directed Tech-Friendly Higher Client Growth from Cross-buy ~50% Clients Own Multiple Products Primary Clients = Stickier Relationships # Primary Clients Doubled since 2015 Strong Client Advocacy 50% New Clients via Referrals Strategy offers superior growth opportunities: Accelerating momentum on collaboration opportunities between Tangerine and Scotiabank • • • Everyday Banking product suite offers diversified NIAT profile in the face of intensified competition and low rates Strong growth in new Client Acquisition and Primary Banking Building deeper ‘stickier' Client relationships by increasing multi- product penetration Tangerine Investments among fastest growing index funds Line of Credit Offering to be launched in 2018 93% of Tangerine's clients are linked to competitors: Big 5 (ex- Scotiabank), Credit Unions, and Other Client-Driven Innovation Incubator: Identify, explore, and pilot new technologies and solutions to meet evolving Client needs. Unique 'Orange' Culture > Team Tangerine: Our unique culture and lean team are an essential part of how we deliver. Award Winning Approach Consistently Recognized: J.D. Power Customer Satisfaction six years in a row, IPSOS, and Digital Brokerage Awards Scotiabank® | 22#23INTERNATIONAL BANKING OVERVIEW Well established and diversified franchise in select, higher growth regions outside of Canada BUSINESS OVERVIEW 2018 PRIORITIES STRATEGIC OUTLOOK Operate 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: Taking customer experience to the next level by leveraging our Customer Pulse program and implementing a new Employee Pulse program to gather valuable feedback on how to better serve our customers Leadership: Continue to strengthen our teams across our business lines and functions • Structural cost transformation: Continue to make progress on our cost reduction programs, while focusing on developing new capabilities across the Bank • Digital transformation: Scale-up our digital banking units across the four Pacific Alliance countries (and Canada), continue driving digital sales on priority products, and accelerating digital adoption and transaction migration Business mix alignment: Strategically grow in key areas, including core deposits, to improve profitability and reduce funding costs Pacific Alliance: Good momentum and continue to leverage diversified footprint • Growth and Margins: Expect low double digit growth in the Pacific Alliance while optimizing operations in the Caribbean and Central America, with stable margins and credit quality Expense Management: Expense management and delivering positive operating leverage remains a key priority, along with strategic investments that will help deliver a stronger customer experience • Growth Strategy: Focused on organic growth, but will consider acquisition opportunities in our existing footprint ⑤Scotiabank® | 23#24INTERNATIONAL BANKING - ANNUAL Strong results in Latin America and the Caribbean & Central America FINANCIAL PERFORMANCE AND METRICS¹ ($MM) 2017 2016 Change Revenue $10,414 $9,841 +6% Expenses $5,664 $5,523 +3% PCLs $1,294 $1,281 +1% Net Income $2,390 $2,079 +15% Productivity Ratio 54.4% Net Interest Margin 4.79% 4.71% 56.1% -170bps +8bps PCL Ratio 1.21% 1.26% -5bps NET INCOME¹ ($MM) AND NIM (%) 4.71% 4.71% • · 4.79% 2,390 2,079 1,853 • ANNUAL HIGHLIGHTS Net Income up 15% 。 Strong results in Latin America, driven by the Pacific Alliance, and the Caribbean & Central America o Higher net interest income and fees Good loan growth, lower commercial provisions and benefits of cost-reduction initiatives o Partly offset by higher income taxes NIM up 8 bps 。 Changes in business mix, strong retail loan growth and higher spreads related to Central Bank rate changes PCL ratio improved by 5 bps Expenses up 3% 。 Higher investments in digital and technology o Volume growth and inflation o Impact of acquisitions 。 Partly offset by savings from cost reduction initiatives and foreign currency translation Operating leverage of +3.3% for the year FY15 1 Attributable to equity holders of the Bank FY16 FY17 6 Scotiabank® | 24#25INTERNATIONAL BANKING - QUARTERLY Solid volume growth and positive operating leverage FINANCIAL PERFORMANCE AND METRICS¹ ($MM) Q4/17 Y/Y Q/Q Revenue $2,565 +3% -3% Expenses $1,395 -1% -3% PCLS $310 +5% -5% Net Income $605 +11% -1% • Productivity Ratio 54.4% -210bps -10bps Net Interest Margin 4.67% -10bps -10bps · PCL Ratio 1.14% -1bps -2bps NET INCOME¹ ($MM) AND NIM (%) 4.77% 4.73% 5.00% 4.77% 4.67% . 547 576 595 614 605 • YEAR-OVER-YEAR HIGHLIGHTS Net Income up 11% or 8%² 。 Strong asset and deposit growth 。 Good expense control 。 Lower tax benefits and lower contribution from affiliates Loans up 7% or 10%² 。 Latin America loan growth up 15%² Y/Y Deposits up 7% or 11%² NIM down 10 bps 。 Changes in business mix, including strong commercial loan growth 。 Lower net inflation impacts PCL ratio improved by 1 bp Expenses down 1% or up 2%² 。 Volume growth and inflation o Higher investments in digital and technology 。 Offset by savings from cost reduction initiatives and foreign currency translation Operating leverage of +3.3% for the year Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Attributable to equity holders of the Bank 2 Adjusting for foreign currency translation Scotiabank® 25#26INTERNATIONAL BANKING – REVENUE AND LOAN MIX - Focused on Latin America, with good contribution from the Caribbean and Central America 69% Latin America REVENUE MIX1 $2.6B 3% Asia 28% Caribbean & Central America 1 For the three months ended October 31, 2017 26% Residential Mortgages AVERAGE LOAN MIX1 $110B 51% Business and Government Loans 23% Personal and Credit Cards ⑤Scotiabank® | 26#27PACIFIC ALLIANCE OVERVIEW Attractive growth opportunity for the Bank ⚫ With 230 million people, an average age of 29, growing middle-class, a large portion of the population that is underbanked, and a stable banking environment 38% Mexico 。 5th largest bank¹ in Mexico; strong positions in mortgages and auto 。 Business confidence is strong o Investing heavily in education 。 Strong and diversified manufacturing industry Peru o 3rd largest bank¹ in Peru 。 Strong franchise, building great momentum 。 Universal bank with strong presence across all segments Chile 6th largest bank1 in Chile 。 Most developed country in Latin America o A leader in corporate lending and capital markets Colombia 。 Growing presence with acquisition of Colpatria 。 Most educated population within Latin America 。 Very strong in retail and credit cards 1 In terms of loans. 2 For the twelve months ended October 31, 2017 Peru 30% Mexico 32% Mexico 13% Colombia 23% Chile EARNINGS BY COUNTRY2 AVERAGE ASSETS BY COUNTRY2 9% Colombia 28% Peru -27% Chile Scotiabank® | 27#28GLOBAL BANKING AND MARKETS OVERVIEW Wholesale banking and capital markets products to corporate, government and institutional clients BUSINESS OVERVIEW Full service platform in Canada and Mexico. Niche focus in U.S., Central and South America, Asia, Australia and select markets in Europe 2018 PRIORITIES • Enhance Customer Focus: Improving the end-to-end customer experience to seamlessly offer our full capabilities, thereby deepening and strengthening our relationships, while leveraging our global footprint to better serve our multi- regional customers • Leaders in our Primary Markets: Invest in people, process and technology, enhance our capabilities in our primary markets of Canada and the Pacific Alliance. Expand our investment banking and capital markets expertise to increase our relevance and deepen our customer relationships in these markets Optimize Effectiveness: Control costs and invest in the right areas to drive shareholder value, while optimizing our of capital and funding. Invest in technology to enhance the customer experience, improve our data and analytics capabilities, and increase operational effectiveness • • STRATEGIC OUTLOOK • Higher Revenues: Expect higher revenues from focus clients, Global Transaction Banking, Corporate Banking and Investment Banking Expense Management: Cost savings and loan losses are expected to moderate toward historic levels ⚫ Global Outlook: Building franchise as a leading wholesale bank in Canada and the Pacific Alliance, while maintaining a relevant presence in other regions to support its multi-regional customers ⑤Scotiabank® | 28#29GLOBAL BANKING AND MARKETS - ANNUAL Higher client trading activity and significantly lower credit losses FINANCIAL PERFORMANCE AND METRICS¹ ($MM) 2017 2016 Change . Revenue $4,624 $4,432 +4% Expenses $2,160 $2,040 +6% PCLS $42 $249 -83% • Net Income $1,818 $1,571 +16% Productivity Ratio 46.7% 46.0% +70bps Net Interest Margin 1.75% 1.67% +8bp • PCL Ratio 0.05% 0.30% -25bps ANNUAL HIGHLIGHTS Net Income up 16% 。 Stronger results in the equities business related to higher client trading activity 。 Significantly lower provisions were partly offset by higher expenses PCL ratio improved by 25 bps 。 Driven largely by lower energy related provisions vs. prior year Expenses up 6% o Regulatory and compliance costs o Technology investments NET INCOME¹ AND TRADING INCOME² ($MM) 1,561 1,692 1,553 1,571 FY15 1 Attributable to equity holders of the Bank 2 Trading income on an all-bank basis 1,813 1,818 FY16 FY17 Scotiabank® 29 29#30- GLOBAL BANKING AND MARKETS – QUARTERLY Higher contributions from equities and improved credit performance FINANCIAL PERFORMANCE AND METRICS¹ ($MM) Q4/17 Y/Y Q/Q . Revenue $1,089 -7% -3% Expenses $569 +7% +7% PCLs $8 -79% -67% Net Income $391 -15% -11% • Productivity Ratio 52.3% +690bps +490bps Net Interest Margin 1.88% +10bps +12bp • PCL Ratio 0.04% -15bps -7bps NET INCOME¹ AND TRADING INCOME² ($MM) 548 518 YEAR-OVER-YEAR HIGHLIGHTS Net Income down 15% 。 Higher equities and Canadian corporate banking • More than offset by lower results in fixed income, precious metals and negative impact of foreign currency translation PCL ratio improved by 15 bps 。 Lower provisions in U.S., Asia and Canada Expenses up 7% 。 Regulatory and compliance costs o Technology investments 。 Partly offset by lower performance-related and share- based compensation 423 448 299 461 469 517 441 391 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Attributable to equity holders of the Bank 2 Trading income on an all-bank basis Scotiabank® 30 30#31GLOBAL BANKING AND MARKETS: ENERGY EXPOSURES Energy exposure is well diversified across sectors and geographies ⚫ $15.5 billion drawn energy exposure, is 3.0% of the Bank's total loan book, increased 1.2% Q/Q1 。 ~55% is investment grade • $13.1 billion of undrawn energy exposure, increased 10.0% Q/Q¹ 。 -75% is investment grade • Cumulative PCLs of $330 million from Q1/15 to Q4/17 。 Cumulative energy loan loss ratio of 2.1% is below our guidance of less than 3% • We remain committed to our guidance and actively manage our exposures DRAWN ENERGY EXPOSURE BY GEOGRAPHY2 DRAWN ENERGY EXPOSURE BY SECTOR 52% E&P 1 2 3 $15.5B 9% Oil Field Services 16% Downstream 23% Midstream 37%- Canada $15.5B -16% U.S. 47% Other³ Quarter-over-quarter impact is calculated on a constant currency basis (inclusive of FX changes, drawn exposures increased 4.0% and undrawn commitments increased 12.0%) By country of residence Other includes Latin America, Asia and Europe Scotiabank | 31#32CREDIT PERFORMANCE BY BUSINESS LINES Well managed and improving credit performance Total PCL as % of average net loans & BAS Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Canadian Banking Retail 0.31 0.32 0.34 0.31 0.30 Commercial 0.14 0.21 0.14 0.09 0.07 Total PCL 0.28 0.30 0.31 0.28 0.27 Net Interest Margin (%) 2 2.39 2.39 2.38 2.41 2.41 International Banking Retail1 2.01 2.10 2.19 2.08 2.00 Commercial1 0.33 0.35 0.51 0.31 0.32 Total PCL 1.15 1.21 1.33 1.16 1.14 Net Interest Margin (%)² 4.77 4.73 5.00 4.77 4.67 Global Banking & Markets Total PCL 0.19 0.04 0.01 0.11 0.04 Net Interest Margin (%) 2,3 1.78 1.63 1.75 1.76 1.88 All Bank Total PCL Ratio 0.45 0.45 0.49 0.45 0.42 Core Banking Margin (%) 2.40 2.40 2.54 2.46 2.44 1 Colombia small business portfolio reclassed to Retail from Commercial - prior periods have been restated 2 Net Interest Income (TEB) as % of Average Earning Assets excluding Bankers Acceptances 3 Corporate Banking only Scotiabank® 32 22#33TREASURY AND FUNDING 33 Scotiabank® 33#34FUNDING STRATEGY Reducing the Bank's reliance on wholesale funding and diversifying funding sources Build customer deposits in all of our key markets • Continue to reduce wholesale funding (WSF) and shift mix towards longer term funding 。 Absolute level of wholesale funding down $8B to $218B Y/Y 。 Wholesale funding as % of total assets down to 23.8% from 25.2% Y/Y О Asset growth funded through deposits 。 Money market funding as % of total WSF down to 36.8% from 37.7% Y/Y • Achieve appropriate balance between cost and stability of funding 。 Maintain pricing relative to peers ⚫ Diversify funding by type, currency, program, tenor and markets o Regular issuance in all markets executed via wholesale funding centers in Toronto, New York, London and Singapore • Pre-fund at least one quarter ahead, market permitting Funding strategy and associated risk managed from Toronto within policies and limits approved by Board of Directors Scotiabank® 34 34#35CONSISTENT LOAN GROWTH Continued growth in core earning assets Core P&C loan growth has remained steady over 2 years • Loans constitute 56% of the balance sheet (CANADIAN DOLLAR EQUIVALENT, $B) $462 $480 $500 $503 $509 $472 $477 $485 $482 $171 $169 $168 $162 $166 $159 $160 $160 $154 $103 $91 $95 $96 $98 $100 $98 $101 $102 $217 $219 $217 $219 $223 $224 $228 $232 $237 Q4/15 Q1/16 Q2/16 Residential Mortgages Q3/16 Q4/16 Personal and Credit Cards Q1/17 Q2/17 Q3/17 Q4/17 Business and Government Scotiabank® 35 55#361 Calculated as Bus& Gov't deposits less Wholesale Funding, adjusted for Sub Debt Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 $174 . $169 $155 $149 $172 $139 $161 $156 $156 $123 $116 $129 $126 Q4/14 Q1/15 Q2/15 BUSINESS & GOVERNEMENT DEPOSITS1 (SPOT, CANADIAN DOLLAR EQUIVALENT, $B) Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 • 3Y CAGR 14.4% Focusing on operational, regulatory friendly deposits BUSINESS & GOVERNMENT Leveraging relationships to increase share of deposits • 14.4% CAGR over the last 3 years DEPOSIT OVERVIEW Solid growth in both personal and business and government deposits PERSONAL DEPOSITS (SPOT, CANADIAN DOLLAR EQUIVALENT, $B) $180 $175 $186 $181 $193 $190 $196 $195 $202 $199 $200 $199 $198 3Y CAGR -4.5% . PERSONAL DEPOSITS Important for both relationship purposes and regulatory value 4.5% CAGR over the last 3 years 。 83% of personal deposits are in Canada, growing at ~4% CAGR 。 17% of personal deposits are outside Canada and growing at ~9% CAGR Scotiabank® 36#37WHOLESALE FUNDING UTILIZATION Reducing reliance on wholesale funding and growing deposits WSF/TOTAL ASSETS 28.4% 27.0% 26.1% 25.9% 25.2% 24.5% 23.8% 23.7% 23.8% REDUCING RELIANCE ON WHOLESALE FUNDING Continuing to close the gap vs. peers o Reduced reliance on wholesale funding by ~20% over the last two years 。 Scotiabank's WSF balance of $218B o Deposits continuing as an alternate to wholesale funding Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 MONEY MARKET WSF/TOTAL WSF 46.3% 44.1% 41.5% 41.4% 38.7% 37.7% 37.5% 37.4% 36.8% Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 FOCUS ON TERM FUNDING Reducing concentration of money market instrument funding Scotiabank® | 37 32#38LIQUIDITY METRICS Well funded Bank with good liquidity ⚫ Liquidity Coverage Ratio (LCR) 。 Consistently strong performance 。 Net Stable Funding Ratio (NSFR) implementation postponed to 2019 132% 127% 126% 125% 125% 125% 124% 124% 121% Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 • High Quality Liquid Assets (HQLA) 。 Efficiently managing LCR and optimizing HQLA $146 $144 $145 $137 $136 $128 $125 $127 $123 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Scotiabank® 38#39WHOLESALE FUNDING COMPOSITION Wholesale funding diversity by instrument and maturity 1,6,7 37% Medium Term Notes & Deposit Notes MATURITY TABLE (EX-SUB DEBT) (CANADIAN DOLLAR EQUIVALENT, $B) Asset-Backed Commercial Paper³ 4%- 2% Deposits from Banks2 31% $218B Bearer Deposit Notes, Commercial Paper & Certificate of Deposits 2% $29 Asset-Backed Securities $4 $1 -12% Covered Bonds $20 $18 $16 $6 $16 $5 555 $2 9% $1 $12 $24 $1 $8 $1 Mortgage Securitization4 3% Subordinated Debt5 $13 $14 $12 $10 $8 < 1 Year 2 Years 3 Years 4 Years 5 Years 5 Years Senior Debt ABS 1 Wholesale funding sources exclude 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 Wholesale funding sources also exclude 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 Q4/17 7 Wholesale funding sources may not add to 100% due to rounding > Covered Bonds Scotiabank® 39#40DIVERSIFIED WHOLESALE FUNDING PROGRAMS Flexible and well balanced programs . 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 。 CAD 15 billion debt & equity shelf (senior debt, subordinated debt, preferred shares, common shares) CAD 2 billion Principal at Risk (PAR) Note shelf CAD 15 billion START ABS program (indirect auto loans) CAD 7 billion Hollis ABS shelf (unsecured lines of credit) CAD 5 billion Trillium ABS shelf (credit cards) CAD 36 billion global registered covered bond program (uninsured Canadian mortgages) Canada Mortgage Bonds and Mortgage Back Securities USD 20 billion debt & equity shelf (senior debt, subordinated debt, preferred shares, common shares) USD 20 billion EMTN shelf USD 5 billion Singapore MTN program 。 AUD 4 billion Australian MTN program Scotiabank® | 40#41CANADIAN REGULATORY ENVIRONMENT: BAIL-IN AND TLAC Banks to begin reporting TLAC measures in Q1/19 ⚫ October 2011: Financial Stability Board (FSB) drafted recommendations regarding resolution regimes for global systemically important banks • 2014: Canadian consultation process began. In 2016, amendments to CDIC Act, Bank Act and other statutes were passed to allow for a bank recapitalization (bail-in) regime o Provided CDIC statutory power to convert specified eligible liabilities of domestic systemically important banks (DSIBS) into common shares in the event such banks become non-viable 。 Extended existing CDIC powers with respect to managing the unlikely scenario of a bank failure ⚫ 2017-2018: Public consultation on final bail-in regulations and the related Total Loss Absorbing Capital "TLAC" guideline completed July 2017 。 Expect regulations to be applied in 2018 ⚫ 2021: TLAC compliance for DSIBS required by Q1/22 。 Minimum TLAC ratio of 21.5% of RWA and minimum TLAC leverage ratio of 6.75% 。 Banks likely to maintain buffers above the minimum requirements Scotiabank® | 41#42CANADIAN BAIL-IN RESOLUTION FRAMEWORK Principles based approach to bail-in conversion with no explicit conversion ratio • Eligibility criteria for bail-in debt and conversion into common shares under the CDIC Act 。 Senior unsecured debt with original term to maturity > 400 days, issued or re-opened by a D-SIB after regulations come into force 。 Tradeable and transferable; assigned a CUSIP, ISIN or similar designation o Excludes deposits, secured liabilities (e.g. covered bonds), eligible financial contracts (i.e. derivatives) and structured notes • Mechanism - designed using no creditor worse off principle 。 Upon determination by OSFI that a bank has ceased to be viable, CDIC will take temporary control/ownership and carry out bail-in conversion and/or other restructuring activities Creditors should not incur greater losses through bail-in resolution than if institution had been wound-up under normal insolvency proceedings 。 Respects relative creditor hierarchy; complete conversion of all subordinate ranking claims before converting any bail-in securities (including legacy non-NVCC capital securities) 。 Legacy debt not subject to the bail-in regime but subject to other resolution regimes available to CDIC Senior creditors should receive relatively better conversion terms vs. junior creditors Bail-in risk mitigated by extremely low probability of event • Principles based approach to bail-in conversion 。 No explicit conversion ratio Scotiabank® | 42#43TLAC REQUIREMENTS AND ELIGIBILITY Two concurrent minimum TLAC compliance requirements Risk-based TLAC ratio > 21.5% of RWA & TLAC leverage ratio > 6.75% 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 days or more Callable without OSFI prior approval if, following the transaction, the minimum TLAC requirement is satisfied Scotiabank® | 43#44TOTAL LOSS ABSORBING CAPITAL (TLAC) Well positioned to meet requirements 30% TLAC today if all senior debt maturing to Q4/2021 was refinanced to bail-in $57B of senior debt 15.1% 21.5% TLAC requirement maturing to Q4/2021 $54B of total capital 14.9% • $57B of senior debt maturing over the next four years to Q4/2021 Will exceed estimated 21.5% TLAC requirement well before the Nov 1, 2021 deadline based on maintaining current capital levels and refinancing upcoming senior maturities with bail-in SENIOR DEBT¹ MATURITY TABLE (AT Q4/17) (Canadian Dollar Equivalent, $B) $57B $24 $13 $14 $12 $10 $8 Q4/2017 TLAC Stack < 1 Year 2 Years 3 Years 4 Years 5 Years 5 Years > 1 Senior Debt = Medium Term Notes and Deposit Notes as per MD&A Scotiabank® | 44#45APPENDIX 1: CANADIAN HOUSING MARKET Scotiabank® 45 45#46CANADIAN HOUSEHOLD DEBT Household debt has been increasing since the mid-1980s 。 Low interest rates, demographics (including immigration), financial innovation and shift in consumer attitude/behaviour Debt increase has largely been driven by mortgage debt (represents ~72% of total household credit) ⚫ Household debt to disposable income is only one metric to analyze 。 While debt growth is not fast by historical standards, income growth has not kept up, leading to increasing household debt to income ratio o Household debt to income ratio mixes a balance sheet measure "debt" with an income statement measure "disposable income". Borrowers are not expected to pay off their debts with one year's income • Other considerations regarding consumer indebtedness and consumer resilience to shocks: o Housing affordability – Mortgage debt-service ratios are in line with historical averages at the national level Interest and principal mortgage debt payments steady at ~6% of disposable income since 2008 Consumers prudently taking advantage of low rates to repay more principal 。 Net worth - Net asset levels (assets less debt) are at an all-time high of more than 8 times disposable income About half of these assets are financial (not real estate) Asset growth has outpaced debt growth Interest rate shocks - Despite expectations for higher rates, there are mitigating factors ○ Canadians have substantial equity in their homes The majority of mortgage holders are locked in at fixed rates, with the 5-year term the most popular Variable rate borrowers are qualified at the 5 year posted rate to provide a buffer against interest rate shocks. These borrowers have the option to switch into fixed rates _ o Unemployment rate – A key driver of delinquencies and losses that determines borrowers' ability to pay debt ○ Levels are expected to remain fairly stable over the next 2-3 years Scotiabank® | 46#47CANADIAN HOUSEHOLD CREDIT GROWTH IS STEADY • Total household credit growing 5.5% y/y in nominal terms, vs 2008 peak of 12% y/y • Consumer loans excluding mortgages (cards, HELOCs, unsecured lines, auto loans, etc.) are growing 4.7% y/y, vs 11% in late 2007 • Mortgage credit growing 5.8% y/y, vs 2008 peak of 13% HOUSEHOLD CREDIT GROWTH 18 %, 3-month moving average 16 14 y/y % change 12 10 m/m% change, 10 SA 5 8 CO 6 4 CONSUMER LOAN GROWTH RESIDENTIAL MORTGAGE GROWTH 20 %, 3-month moving average 20 %, 3-month moving average 18 15 y/y % change 16 y/y % 14 change 12 10 m/m% 8 0 CO 6 change, SA -5 m/m% change, SA 2 0 -10 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Source: Scotiabank Economics, Bank of Canada. 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Bank of Canada. 4 2 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Bank of Canada. Scotiabank® | 47#48HOUSEHOLD DEBT COMPARISON • In comparable terms, Canadian debt-to-income is 12% below where it peaked in the U.S. 。 In the last 7 years, increases in Canadian debt-to-income ratio have slowed vs 2002-2010 。 On same terms, Canada's debt-to-income is 156% vs 140% 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 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 Household Credit Market Debt to Disposable Income 180 household credit liabilities as % of disposable income Total Household Liabilities 30 As % of Total Assets household debt as % of assets 160 140 120 100 80 60 25 20 Adjusted Canadian 15 Adjusted US Official Canadian 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada, BEA, Federal Reserve Board. 10 US Canada 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada, Federal Reserve Board. Scotiabank® | 48#49CANADIAN MORTGAGE MARKET . . Canadian housing market is less expensive on a global scale, particularly for buyers with U.S dollars Mortgage holders 。 No negative equity mortgages in Canada о 89% of borrowers have 75% or less LTV. Significant price decreases required to reach a negative equity position 。 Amount of non-recourse mortgages are low (~6-7% of total Canadian mortgages at most) and isolated to only Alberta (excluding high-LTV mortgages) and Saskatchewan. 。 High amount of equity: average equity ratio is 74% On average, 40% of available HELOC credit is drawn, 60% is undrawn 。 Approximately half of first-time home buyers in Canada are able to source their down payments from their personal savings • 2014-16 data shows 75% of buyers from that period have 25% or more equity . 。 Partly reflects speed of rising house prices, but also increased emphasis on down payment requirements and tightened mortgage rules 2014-16 data indicates 39% of first-time home buyers had less than 20% down-a low point historically • Efforts to cool the housing market are working, as evidenced by moderating price appreciation. TWO-THIRDS OF CDN HOUSEHOLDS DO NOT HAVE A MORTGAGE 40 % 35 30 25 20 195 15 10 5 0 Owned dwelling Owned dwelling with a mortgage Rented without a mortgage Sources: Scotiabank Economics, Statistics Canada HIGH PERCENTAGE OF EQUITY (REAL ESTATE EQUITY AS % OF REAL ESTATE ASSETS) 80 % 70 60 50 US Canada 40 30 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Federal Reserve Board, Statistics Canada. Scotiabank 49#50RATIO NUMBER OF IMMIGRANTS TO CANADA, 000S CANADIAN HOUSING FUNDAMENTALS REMAIN SOUND INTERNATIONAL IMMIGRATION 290 240 190 140 90 95 00 2017 Target = 300K 05 10 15 Sources: Scotiabank Economics, Statistics Canada. RESIDENTIAL UNIT SALES TO NEW LISTINGS RATIO 1.0 0.8 Sellers' Market 0.6 0.4 Wh Balanced Market 0.2 Buyers' Market 0.0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, CREA MLS. Data through October 2017. % OF MORTGAGES IN ARREARS 3 MONTHS OR MORE % OF DISPOSABLE INCOME 3 2 2 0 MORTGAGE DEBT SERVICE RATIO 1990-2016 average Interest + Required Principal Payments Interest Only 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada. Data through 2017Q2. RESIDENTIAL MORTGAGES ARREARS CO 5 U.S. Canada 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, CBA, MBA. Data through Q3 and August 2017. Scotiabank® | 50#51HOUSING POLICY DEVELOPMENTS IN CANADA 2018 • 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 2%, effective January 1, 2018 2017 • Ontario government imposed 16 measures aimed to cool the rate of house price appreciation. Key aspects include: О 15% non-resident speculation tax imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations 。 Expanded rent control that will apply to all private rental units in Ontario 。 Legislation to allow for a vacant home tax 2016 • $125 million five-year program to encourage construction of new rental apartment buildings by rebating a portion of development charges CMHC 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 CMHC updated low-ratio mortgage insurance eligibility requirements for lenders wishing to use portfolio insurance ○ Maximum amortization 25 years O $1 million maximum purchase price ○ Minimum credit score of 600 。 Property must be owner occupied 2016 • • Canada Revenue Agency now requires reporting of a disposition of a property for which the principal residence exception is claimed. Foreign buyers are not able to claim the primary residence tax exemption Department of Finance launched a public consultation process regarding lender risk sharing. Comments were submitted in February 2017 B.C. government introduced an additional 15% land transfer tax on non-resident purchases in Metro Vancouver Minimum down payment on insured mortgages on homes valued C$0.5 - C$1 million increased from 5% to 10% 2014 CMHC discontinued offering mortgage insurance on second homes and to self employed individuals without 3rd party income validation 2012 • Maximum amortization on insured mortgages reduced to 25 years (from 30) Maximum amount borrowed on insured mortgages at refinancing reduced to 80% (from 85%) CMHC insurance availability is limited to homes with purchase price < $1 million For insured mortgages, maximum gross debt service ratio of 39% and maximum total debt service ratio of 44% Maximum LTV for HELOCS lowered to 65% (from 80%) Scotiabank | 51#52HOUSING MARKET STRUCTURAL DIFFERENCES VS. U.S. Regulation and taxation Product Underwriting Canada Mortgage interest not tax deductible Full recourse against borrowers in most provinces (in all of Saskatchewan and for low-ratio mortgages in Alberta, recourse is only to the value of property) Ability to foreclose on non-performing mortgages with no stay periods. Mandatory default insurance for any mortgage with Loan-to-value >80% CMHC insurance backed by the government of Canada (AAA). Private insurers are 90% government backed o Insurance available for homes up to $1 million О Premium is payable upfront by the customer 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% on non-insured mortgages Maximum 25-year amortization on mortgages with LTV > 80% Maximum 30-year amortization on conventional < (LTV 80%) 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#53APPENDIX 2: CANADA & INTERNATIONAL ECONOMIES Scotiabank® 53 53#54CANADIAN ECONOMY AND FINANCIAL SYSTEM Stable economy with sound financial system • • CANADIAN ECONOMY The 10th largest economy in the world, with a strong export orientation Economy diversified, with particular strength in service, primary, manufacturing, construction, and utility sectors Proactive governments and central bank that has begun unwinding exceptionally accommodative monetary policy Manageable government deficits and debt burdens Stronger growth outlook, with firmer 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 O Prudent lending standards 。 Few sub-prime mortgages Relatively little securitization Primarily originate-to-hold model Canadian banks well-capitalized and profitable Scotiabank® | 54#55% OF GDP CANADIAN ECONOMY Diverse economy with a strong balance sheet 20.1%- Finance, Insurance, & Real Estate 14.4% Other 4.5% Transportation & Warehousing 5.4% Professional, Scientific, & Technical Services 6.3% CANADIAN GDP BY INDUSTRY (AUG 2017) Public Administration -11.7% Health & Education -11.7% Wholesale & Retail Trade -10.4% Manufacturing -8.5% Mining and Oil & Gas Extraction 6.9% Construction GENERAL GOVERNMENT NET FINANCIAL LIABILITIES REAL GDP GROWTH ANNUAL % CHANGE 3 2 Canada US Eurozone UK Japan 2000-2016 2017f-2018f Sources: Scotiabank Economics, OECD (2016 Estimates, Statistics Canada. Forecasts as of November 3, 2017. GOVERNMENT FINANCIAL DEFICITS 125.5 130.6 92.8 79.1 81.3 68.8 40.1 31.3 Canada Germany OECD France US UK Sources: Scotiabank Economics, OECD (2016 estimates). As of November 20, 2017. % OF GDP ŵ Ń 0.8 (1.1) (1.9) (2.4) (3.1) (3.3) (4.2) (4.4) -4 -5 Japan Italy GermanyOECD* Canada Italy UK France Japan US *Arithmetic mean. Sources: Scotiabank Economics, IMF (2016 estimates). As of November 20, 2017. Scotiabank® 55#56STABLE ECONOMIC FUNDAMENTALS IN CANADA Low unemployment rate supporting growth in Canadian Economy UNEMPLOYMENT RATE 14 12 10 6 864 2 0 Canada US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2017. INFLATION 6 . 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 strong immigration Stable inflation within Bank of Canada target band LABOUR FORCE PARTICIPATION RATE 1. Canada Bank of Canada Target Inflation Band US -2 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2017. (%) 70 68 66 64 2069 Canada US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2017. Scotiabank® | 56#57ECONOMIC OUTLOOK IN KEY MARKETS No Significant Exposure to the BRICS 2017 AND 2018 REAL GDP GROWTH FORECAST (%) Real GDP (Annual % Change) Country 2000-15 Avg. 2016A 2017F 2018F Mexico 2.4 2.3 2.4 2.7 Peru 5.1 4.0 2.5 3.7 Chile 4.1 1.6 1.4 2.8 Colombia 4.0 2.0 1.6 2.5 2000-16 Avg. 2016A 2017F 2018F Canada 2.1 1.5 3.1 2.2 U.S. 1.9 1.5 2.2 2.4 Source: Scotiabank Economics. Forecasts as of November 3, 2017. Scotiabank® | 57#58APPENDIX 3: INTERNATIONAL OVERVIEW 99 Scotiabank® 58#59LATIN AMERICA Attractive growth opportunity for the Bank Pacific Alliance 。 Identified as a key area of growth for the Bank 。 Reflects a trade bloc with a free trade agreement to liberalize commerce and improve integration among Mexico, Peru, Chile, and Colombia (and it is expanding) 。 The strategic purpose is to strengthen trade flows with Asia and to compete with Brazil and Argentina, which participate in Mercosur 。 The Pacific Alliance 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 • Presents an Attractive Long-Term Opportunity o Reflects the 7th largest goods exporter 。 Trade bloc with respective governments supporting growth/significant infrastructure spending Strong and favourable relative GDP growth rates Considerable room to increase banking penetration (avg. domestic credit/GDP of 66%) 。 Fast-growing middle-class with increasing financial needs 。 Favourable demographics for banking needs (median age of 30 years old) 。 Relatively stable legal, tax and regulatory infrastructure in place 。 Central bankers have earned credibility and banking system is well-capitalized Scotiabank® 59#60CARIBBEAN, CENTRAL AMERICA, AND ASIA Strong contribution from efficient C&CA region and portfolio investments in Asia Caribbean and Central America 。 Well-established, diversified franchise that serves more than 15 million retail, corporate and commercial customers 。 Largest bank in the region, with significant presence in Jamaica, Trinidad & Tobago, Dominican Republic, Bahamas, Barbados, Puerto Rico, and 13 other countries 。 Industry expertise in Infrastructure, Power, Automotive, Fuel Distribution, Real Estate, and Hospitality Mature market and remains very profitable for the Bank Opportunity to optimize operations, improve customer profitability and reduce structural cost 。 Recognized by Euromoney for the Best Commercial Banking capabilities in the Caribbean and Bahamas (2017) O O O Recognized by Global Finance Magazine for the "Best Bank Award 2017" in the Bahamas, Barbados, Costa Rica, Turks & Caicos and U.S. Virgin Islands, the "World's Best Consumer Digital Bank 2017" in 24 countries across Latin America and the Caribbean, and the "Best in Mobile Banking" in the region • Asia 。 Strategic portfolio investments in Asia-Pacific 。 Thailand (49%) - Invested in Thanachart Bank in 2007 $2.8 billion carrying value1 $508 million of net income for twelve months ended October 31, 2017 China (19.9%) Invested in Bank of Xi'an in 2009 ○ $711 million carrying value1 $411 million of net income for twelve months ended October 31, 2017 1 As at October 31, 2017 Scotiabank® | 60 60#61NAFTA REVIEW AND CONSIDERATIONS Scotiabank is operating in the right markets across the Pacific Alliance and committed to long term growth • Impact on Pacific Alliance 。 No material impact expected on Peru, Chile, or Colombia 。 Mexico is highly exposed to disruptions in NAFTA, but we do not expect any major negative changes in the trading relationship with the US • Viewpoint 。 NAFTA came into effect in 1994. Much has changed since then in the global economy. Efforts to 'modernize' elements of NAFTA in the areas of e-commerce, intellectual property, and professional labour mobility are welcome 。 Mexico has a strong manufacturing industry with 40 bilateral trade agreements with other countries 。 NAFTA has helped Mexico to advance on a number of meaningful structural reforms in sectors that include Energy, Telecommunications, and Transportation, amongst others, that will support growth 。 Mexico invests heavily in education and produces more engineers each year than Germany Overall Outlook 。 We do not expect a consensus on a 'renegotiated and modernized' NAFTA by the current deadline of end-March 2018, nor do we expect NAFTA to be ripped up with an increase in tariff and non-tariff barriers to trade with the US o Instead, we expect uncertainty over NAFTA to continue through 2018 。 We expect Mexico to continue delivering double-digit loan growth: NAFTA-related uncertainty does not appear to have dented investment so far o Mexico 'mainstreet' continuing to perform well and Scotiabank gaining market share in both retail and commercial activities Scotiabank® | 61#62APPENDIX 4: COVERED BONDS Scotiabank® 62 62#63SCOTIABANK GLOBAL REGISTERED COVERED BOND PROGRAM CAD $36.5 billion global covered bond program Active in multiple currencies: USD, EUR, GBP and AUD • 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 Guarantor Guarantee Status Program Size Ratings Cover Pool Asset Percentage Law Issuance Format The Bank of Nova Scotia 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% 92% (8% minimum overcollateralization) Ontario, Canada 144A/Reg S (UKLA Listed) ⑤Scotiabank® | 63#64PORTFOLIO DETAILS: SCOTIABANK GLOBAL REGISTERED COVERED BOND PROGRAM1 LOAN-TO-VALUE RATIOS2 CREDIT SCORES 44% 57% 27% 23% 5% 6% 20% 1% 1% 2% 13% 0-20% 20-40% 40-60% 60-80% 80+% <599 600-650 651-700 701-750 751-800 800< REMAINING TERM DISTRIBUTION (MONTHS) 25% 12% 13% 23% 16% 12% <12 12-23.99 24-35.99 36-41.99 42-47.99 48< 13.7% PROVINCIAL DISTRIBUTION Alberta 0.2% Yukon 2.8% Saskatchewan 8.0% Quebec 0.3% P.E.I. 1 As at October 31,2017 2 Uses indexation methodology as outlined in Footnote 1 of the Scotiabank Global Registered Covered Bond Monthly Investor Report 50.5% Ontario 17.5% British Columbia 1.3% Manitoba 1.3% New Brunswick 1.9% Newfoundland 2.5% Nova Scotia Scotiabank® | 64#65DETAILS: CANADIAN LEGISLATIVE COVERED BONDS (CMHC REGISTERED) Issuance Framework . Eligible Assets Mortgage LTV Limits Basis for Valuation of Mortgage Collateral Canadian Registered Covered Bond Programs' Legal Framework (Canadian National Housing Act) 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% Starting in July 2014, 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 10% of the aggregate value of (a) the loans (b) any Substitute Assets and (c) all cash held by the Guarantor Substitute Assets • Repos of Government of Canada securities having terms acceptable to CMHC . Substitute Assets Limitation Cash Restriction Coverage Test • . Credit Enhancement • Swaps Market Risk Reporting 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 Covered Bond Supervisory Body • CMHC Requirement to Register Issuer and Program Registry Disclosure Requirements • 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 disclosure requirements in Canada, the U.S. and UK Scotiabank® 65#66APPENDIX 5: CORPORATE SOCIAL RESPONSIBILITY Scotiabank® 99 66#67CORPORATE SOCIAL RESPONSIBILITY OUR BELIEF We believe every customer has the right to become better off. Through our CSR commitments we aim to create value for both society and Scotiabank, building a better future. FINANCIAL KNOWLEDGE ACCESS TO FINANCE 698 DIVERSITY AND INCLUSION INVESTING IN YOUNG PEOPLE RESPONSIBLE FINANCING MAINTAINING TRUST CLIMATE CHANGE 660,000 Canadian students participated in Talk With Your Kids About Money day in 2017 More than $5 BILLION in microlending globally in 2017 33% women in leadership positions (VP+) in 2017 $80 MILLION in donations globally in 2017 to support the communities we operate in $4.7 BILLION in calculated authorized exposure to the renewable energy sector globally in 2017 Greenhouse gas reduction target: 10% GLOBALLY BY 2021 based on 2016 levels We received feedback from over 2 MILLION customers in 2017 from "The Pulse" - our customer experience management system MEMBERSHIPS THE GLOBAL COMPA 77 United Nations Global Compact CDP DRIVING SUSTAINABLE ECONOMIES EQUATOR PRINCIPLES Scotiabank® | 67#68CONTACT INFORMATION INVESTOR RELATIONS Adam Borgatti Vice President 416-866-5042 [email protected] Steven Hung Director 416-933-8774 [email protected] FUNDING Andrew Branion Executive Vice President & Group Treasurer 416-933-7458 [email protected] Michael Lomas Managing Director, Treasury Sales and Market Development 416-866-5734 [email protected] Dave Tersigni Managing Director, Senior Funding 416-863-7080 [email protected] Christy Bunker Managing Director, Alternate Funding 416-933-7974 [email protected] For further information, please contact: www.scotiabank.com/investorrelations Scotiabank® | 68