#1Scotiabank Investor Presentation Fourth Quarter, 2006 December 8, 2006 Scotiabank This document includes forward-looking statements which are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. These statements include comments with respect to the Bank's objectives, strategies to achieve those objectives, expected financial results (including those in the area of risk management), and the outlook for the Bank's businesses and for the Canadian, United States and global economies. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intent," "estimate," "plan," "may increase," "may fluctuate," and similar expressions of future or conditional verbs, such as "will," "should," "would" and "could." By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. The Bank cautions readers not to place undue reliance on these statements, as a number of important factors could cause actual results to differ materially from the estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the economic and financial conditions in Canada and globally; fluctuations in interest rates and currency values; liquidity; the effect of changes in monetary policy; legislative and regulatory developments in Canada and elsewhere; operational and 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 in receptive markets; the Bank's ability to expand existing distribution channels and to develop and realize revenues from new distribution channels; the Bank's ability to complete and integrate acquisitions and its other growth strategies; changes in accounting policies and methods the Bank uses to report its financial condition and the results of its operations, including uncertainties associated with critical accounting assumptions and estimates; the effect of applying future accounting changes; global capital markets activity; the Bank's ability to attract and retain key executives; reliance on third parties to provide components of the bar of the Bank's business infrastructure; unexpected changes in consumer spending and saving habits; technological entrants and elopments; consolidation in the Canadian financial services sector; changes in tax laws; competition, both from new established competitors; judicial and regulatory proceedings; acts of God, such as earthquakes; the possible impact of international conflicts and other developments including terrorist acts and war on terrorism; the effects of disease or illness on local, national or international economies; disruptions to public infrastructure, including transportation, communication, power and water; and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements. For more information on risks the Bank faces, please see the Risk Management section in the Bank's 2006 Annual Report. The Bank cautions that the foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the foregoing factors, other uncertainties and potential events. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Bank. Additional information relating to the Bank, including the Bank's Annual Information Form, can be located on the SEDAR website at www.sedar.com, and on the EDGAR section of the Securities and Exchange Commission's (SEC) website at www.sec.gov.#2Scotiabank Overview Rick Waugh President & Chief Executive Officer Scotiabank 2006 - Continued earnings momentum EPS ($) 2.82 3.15 3.55 2006 Results vs. 2005 ☐ EPS: $3.55 up 13% 2.34 2.18 18 17 ROE (%) 20 22 21 Dividends/Share ($) 1.50 1.32 1.10 0.84 0.73 2002* 2003 2004 2005 2006 * Excludes charges related to Argentina 4 ■ ROE: 22.1% vs. 20.9% Q4/06 Results vs. Q4/05 ◉ EPS: $0.89 up 11% Dividend Increase +3 cents to 42 cents/quarter effective Q1/07#3Scotiabank Three growth platforms Each greater than $1 billion in earnings net income available to common shareholders, $ millions 1,253 1,279 Domestic 2005 2006 1,054 1,047 915 800 International Scotia Capital Domestic: Strong asset and deposit growth offset by compression in the margin, primarily due to higher funding costs. Solid results in wealth management, small business and commercial banking International: Record net income driven by positive earnings impact of acquisitions (Peru, Costa Rica) and strong organic earnings and asset growth across entire division. Scotia Capital: Record net income and ROE due in large part to strong capital markets performance and solid growth in corporate lending. Scotiabank Strong market share gains in Canada & significant growth in new customers Year-over-Year Increase Residential Mortgages +136 basis points Total Personal Lending +82 basis points Personal Term Deposits +78 basis points Total Personal Deposits +48 basis points Domestic Banking: +180,000 new customers in 2006 International Banking: +1.7 million new customers in 2006 Domestic market share figures as at September 2006 6#4Delivered on 2006 key priorities Scotiabank Priorities Performance 1. Focus on revenue growth Revenue growth of 9% 7 acquisitions in past 18 2. Effectively manage capital months, with a total investment of about $1.5 B 14% dividend growth Strong TCE: 8.3% 3. Leadership development Strong execution across organization Scotiabank 7 Exceeded 2006 performance objectives Q4/06 2006 Objective EPS Growth 11% 13% VS. 5-10% ROE 21.1% 22.1% VS. 18-22% Productivity 56.9% 55.3% VS. <58% 8#5Scotiabank Performance Review Luc Vanneste Executive Vice-President & Chief Financial Officer Scotiabank ☐ Net income* 3,600 2,400 1,200 3,184 Financial Performance -ROE 3,549 30 20 10 0 0 2005 2006 1,000 928 30 890 803 750 500 250 0 Q4/05 Q3/06 Q4/06 * net income available to common shareholders, $ millions 20 10 Overview 2006 vs. 2005 net income: +12% ■ record earnings and high ROE driven by strong asset growth, positive impact of acquisitions and stable credit quality partly offsetting: - negative forex translation ($153) mm, - margin compression from higher funding costs - higher expenses ($400) mm due mainly to acquisitions and revenue growth initiatives Q4/06 vs. Q4/05 net income: +11% ■ positive impact of acquisitions, higher retail volumes & higher trading revenues, partly offset by lower securities gains Q4/06 vs. Q3/06 net income: (4)% ■ VAT recovery in Q3, negative impact of AcG-13 & lower net securities gains " partly offset by lower credit losses and higher trading revenues 10#6Scotiabank - Solid revenue growth – up 9% vs. 2005 revenues (TEB), $ millions. 6,197 6,848 4,529 4,800 2005 2006 Net Interest Income (TEB) ☐ Other Income 1,816 1,783 1,581 1,154 1,173 1,216 Q4/05 Q3/06 Q4/06 2006 vs. 2005 net interest income: +11% strong average asset growth ■ partly offset by margin compression & negative impact of foreign currency translation ($202) mm 2006 vs. 2005 other income: +6% positive impact of acquisitions and solid growth - credit cards +$56 mm - trading +$43 mm & retail brokerage +$54 mm - mutual funds +$48 mm ■ lower net securities' gains ($43) mm and underwriting fees ($40) mm and negative impact of foreign currency translation ($138) Q4/06 vs. Q4/05 revenues: +10% strong asset growth & acquisitions partly offset by margin compression & foreign currency translation Q4/06 vs. Q3/06 revenues flat higher trading, securitization, and investment mgmt, brokerage and trust revenues partly offset by AcG-13 & lower net securities gains 11 Scotiabank average assets, $ billions 309 Strong asset growth 13% 351 34 37 22 72 65 66 2005 88 72 2006 Residential mortgages Personal Loans Business & Government (includes acceptances) Securities Other Residential mortgages: +14% Personal loans: +8% ▪ Business & government: +11% ■ Securities: +22% 12#7Scotiabank expenses, $ millions 6,043 6,443 Higher expenses Investing for future growth 2006 vs. 2005 expenses: +7% ■ more than 60% increase due to acquisitions higher salaries & employee benefits +$280 mm, due partly to acquisitions higher premises and technology: +$66 mm ■ other expenses up $54 mm due to the impact of acquisitions partly offset by VAT recovery of $51 3,768 3,488 1,148 1,214 1,407 1,461 mm 2005 2006 Salaries & employee benefits Premises & technology Other 1,708 1,579 1,608 966 861 940 302 322 313 416 420 355 Q4/05 Q3/06 Q4/06 Scotiabank Q4/06 vs. Q4/05 expenses: +8% ■70% of increase due to the impact of acquisitions primarily in salaries & employee benefits +$105 mm Q4/06 vs. Q3/06 expenses: +6% ■ expenses rose $100 mm, due mainly to $51 mm VAT recovery in Q3 higher remuneration, technology and advertising 13 Risk Review Brian Porter Chief Risk Officer 14#8Scotiabank Stable credit quality $ millions Q4/06 Q3/06 2006 2005 32 74 Provision for Credit 216 230 Losses (PCL) 92 74 Specific Provisions 276 275 570 479 Net Impaired Loans* 570 681 ■ General Allowance: $1,307 mm · - - reduction of $60 mm in Q4/06 offset by $37 mm increase from Peru acquisitions $1.4 billion in credit protection outstanding * after specific allowance for credit losses 15 Scotiabank Credit losses remain low $ millions 18 24 Q4/06 Q3/06 Domestic: 55 538 36 32 268 59 - Retail Banking 10 - Commercial 69 2006 2005 N 229 225 50 49 279 274 International: - Mexico 27 34 - Caribbean & Central America 15 23 - Latin America & Asia 18 13 60 70 Scotia Capital: (60) 8@8' 8༞ཚ (16) - U.S. (41) (93) (3) - Canada & Other (22) 22 (19) (63) (71) Other 2 74 Total Specific Provisions 276 275 - Reduction of General Allowance (60) (45) 74 Total 216 230 16#9Scotiabank $ millions Domestic: Net impaired loan formations in Q4/06 - Retail - Commercial 29 International: - Mexico - Caribbean & Central America 77 72 31 22 106 Domestic Retail: formations in line with strong volume growth - underlying credit trends remain strong. Domestic Commercial: classification of several small accounts, stable credit quality. 23 27 - Latin America & Asia (27) Scotia Capital: - U.S. (18) - Canada & Other 54 36 Total 169 ต Scotiabank International: credit quality remains stable. Scotia Capital: classification of 2 accounts in Europe, partly offset by a loan sale in the U.S. 17 Domestic Banking Chris Hodgson Executive Vice President Domestic Personal Banking 18#10Scotiabank Domestic Banking Solid earnings from asset & revenue growth Net income* 1,253 2006 vs. 2005 net income: +2% ROE % 1,279 40 ▪ strong retail asset & deposit growth, resulting in market share gains 30 1,300 975 650 20 325 10 0 0 2005 2006 400 40 335 326 319 300 30 200 100 0 Q4/05 Q3/06 Q4/06 *net income available to common shareholders, $ millions Scotiabank revenues (TEB), $ millions 3,651 3,741 992 911 ■ solid performance in wealth management, small business and commercial banking ▪ margin compression primarily due to higher funding costs Q4/06 vs. Q4/05 net income: +3% ■ improved wealth management results, strong growth in retail loans +14% higher expenses related to acquisitions, business growth initiatives margin compression 20 Q4/06 vs. Q3/06 net income: +5% 10 0 ■ growth in assets and deposits, increased wealth mgmt. fees and lower credit losses partly offset by higher expenses +$33 mm 19 Domestic Banking Revenue growth 2006 vs. 2005 revenues: +4% Retail & Small Business: +2% ■ strong asset and deposit growth: - loans +11% & GICS +10% higher transaction fees and card revenues Wealth Management: +9% ▪ higher mutual fund, brokerage & Private Client Commercial Banking: +6% strong asset +7% & deposit growth +15% Q4/06 vs. Q4/05 revenues: +4% Retail & Small Business: +2% strong asset and deposit growth higher transaction fees Wealth Management: +10% ■ increase in mutual fund revenues Q4/06 vs. Q3/06 revenues: +3% ■ asset growth & higher brokerage revenues 20 833 884 " 2005 2006 Retail & Small Business Wealth Management Commercial Banking 967 944 956 232 235 255 227 221 233 Q4/05 Q3/06 Q4/06#11Scotiabank ☐ Domestic 2007 Priorities Drive sustainable revenue growth greater emphasis on investment products continue strategy of growing key customer segments focus on higher margin products seek additional strategic alliances and acquisitions Expand distribution and sales capacity - open 35 new branches add 300+ new branch/wealth management sales staff Improve earnings momentum and operating leverage ต Scotiabank 21 International Banking Rob Pitfield Executive Vice President International Banking 22#12International Banking Scotiabank Record earnings from broad-based growth Net income* - ROE % 1,300 30 1,054 975 800 20 650 325 10 0 2006 vs. 2005 net income: +32% ■ record earnings despite negative impact of foreign currency translation ($65) mm significant contributors to growth were Mexico, Caribbean and Central America and acquisitions in Peru ■ broad based asset growth +11%, higher retail banking revenues in Mexico and credit card revenues in C&CA 0 2005 2006 300 285 30 268 200 174 100 0 + Q4/05 Q3/06 Q4/06 * net income available to common shareholders, $ millions 20 10 Q4/06 vs. Q4/05 net income: +54% strong growth in all regions, particularly Mexico and Asia, solid contribution from Peru Q4/06 vs. Q3/06 net income: (6)% ■ lower earnings due to VAT recovery in Q3 partially offset by increased contribution from Peru and Asia higher expenses to fund growth initiatives 23 International Banking Higher revenues in all regions Scotiabank revenues (TEB), $ millions 1,206 1,054 1,308 1,174 534 2005 □ Mexico Caribbean & Central America Latin America & Asia 731 2006 303 305 276 349 332 308 243 207 124 Q4/05 Q3/06 Q4/06 2006 vs. 2005 revenues: +17% Mexico: +14% ■ strong underlying asset growth: - credit cards +54%, - mortgages +28%, - commercial loans +15% ■ higher credit card, brokerage & retail banking fees partly offset by foreign currency translation ($62) mm Caribbean & Central America: +11% ■ increase due to full year impact of El Salvador acquisition ■ underlying loan growth: retail +18% & commercial +22% Latin America & Asia: +37% ■ impact of Peru acquisitions partly offset by lower gains on sale of emerging market securities Q4/06 vs. Q4/05 revenues: +26% positive impact of acquisitions and strong organic retail & commercial asset growth in many countries Q4/06 vs. Q3/06 revenues: +6% ■ increased contribution from Peru and Costa Rica acquisitions and asset growth in Caribbean & Central America 24#13Scotiabank International 2007 Priorities ■ Drive sustainable revenue growth - Leverage sales & service model to drive strong organic growth and to benefit acquisitions Pursue additional acquisition opportunities • increase presence in existing markets • target complementary businesses: insurance & wealth management ■ Aggressively expand distribution network - +125 new branches (100 in Mexico) & 100 ABMS ต Scotiabank Continue double-digit earnings growth 25 Scotia Capital Stephen McDonald Co-Head Scotia Capital 26#14Scotia Capital Record net income & ROE in 2006 Scotiabank Net income* 1,100 -ROE 1,047 % 40 915 825 30 550 275 2006 vs. 2005 net income: +14% 20 10 10 ■ record earnings from solid revenue growth ■ record return on equity: 31.3% benign credit environment ▪ expenses remain well controlled: +3% 0 0 2005 2006 300 278 40 229 235 30 200 100 0 Q4/05 Q3/06 Q4/06 * net income available to common shareholders, $ millions 20 10 0 Q4/06 vs. Q4/05 net income: +3% ■ increased derivatives revenues partly offset by higher loan losses & expenses Q4/06 vs. Q3/06 net income: (15)% ■ lower revenues and higher loan losses, partly offset by lower expenses 27 Scotiabank revenues (TEB), $ millions 1,102 1,234 1,067 1,154 2005 2006 Global Capital Markets (GCM) Scotia Capital 2006 revenues higher Global Corporate & Investment Banking (GC&IB) 244 251 307 369 288 268 Q4/05 Q3/06 Q4/06 2006 vs. 2005 revenues: +10% Global Capital Markets: +12% strong results in derivatives, precious metals & foreign exchange, offset by lower equity trading higher interest income, due primarily to higher dividend income Global Corporate & Investment Banking: +8% higher interest recoveries and increased lending volumes, partly offset by tighter spreads ■record M&A revenues, due in part to full year of Scotia Waterous, and higher net securities gains Q4/06 vs. Q4/05 revenues: +7% Global Capital Markets: +22% ■ higher derivatives revenues Global Corporate & Investment Banking: (7)% higher revenues from Scotia Waterous & loan growth offset by lower net securities gains Q4/06 vs. Q3/06 revenues: (6)% ■ lower net securities gains and interest recoveries compared to high levels in Q3 partly offset by higher derivatives revenues 28#15Scotiabank ■ ■ Scotia Capital 2007 Priorities Enhance NAFTA platform with additional product capabilities Target growing customer segments with new product offerings Build additional global industry specializations - leverage Waterous & Co. acquisition to enhance Oil & Gas develop or acquire expertise in targeted industries Continue to leverage long-standing client relationships ■ Maintain credit discipline Deliver sustainable net income growth with a high ROE Scotiabank 29 Outlook Rick Waugh President & Chief Executive Officer 30#16Scotiabank ☐ 2007 Priorities Continued focus on sustainable revenue growth in all business lines while maintaining strong expense management and credit discipline Deploy capital effectively - ― organic growth acquisitions dividend increases & share buybacks Continued emphasis on leadership development 31 2007 objectives Scotiabank ■ EPS growth: 7-12% ROE: 20-23% Productivity ratio - less than 58% ■ Maintain strong capital ratios & credit ratings 32#17Scotiabank Scotiabank Appendix 33 Impact of foreign currency translation Average exchange rate US dollar/Canadian dollar Mexican peso/Canadian dollar 2006 2005 2004 0.8782 0.8217 0.7586 9.5422 9.0523 8.5968 2006 vs. Impact on income ($ millions) 2005 2005 vs. 2004 Q4/06 vs. Q4/06 vs. Q3/06 Q4/05 Net interest income $(202) $(164) $2 $(47) Other income (138) (123) 1 (24) Non-interest expenses 136 95 (6) 34 Other items (net of tax) 51 47 1 10 Net income (153) (145) (2) (27) Earnings per share (diluted) $(0.15) $(0.14) $(0.03) 34#18Impact of acquisitions Scotiabank Impact on income ($ millions) 2006 2005 Net interest income $247 35 Other income 215 33 Non-interest expenses (304) (48) Other items (net of tax) (58) (4) Net income 100 16 Earnings per share (diluted) $0.10 $0.02 35 2006 Scotiabank $ millions Other Income up reflecting organic growth and impact of acquisitions % Change vs. Q4/05 % Change vs. 2005 Q4/06 Q3/06 Deposit & Payment Services $766 9% $196 8% (1)% Investment Banking 659 (3) 175 2 5 Retail Brokerage & Trust 596 11 152 6 7 Credit Fees 530 (2) 127 (3) (9) Net Gain on Investment Securities 371 (10) 64 (41) (39) Trading Revenues 637 7 138 9 39 Other 1,241 17 364 24 13 Total $4,800 6% $1,216 5% 4% 2006 vs. 2005: Other Income +6% ■ Broad-based growth in several categories, including retail brokerage, mutual funds Positive impact of acquisitions partially offset by lower net securities gains and securitization revenues Q4/06: Other Income up 5% yr/yr and 4% qtr/qtr Yr/yr: broad-based growth and positive impact of acquisitions partially offset by lower securities gains ■ Qtr/qtr: increases in trading, investment management, brokerage and trust and securitization revenues offset by lower net securities gains and credit fees 36#19Scotiabank $ millions Higher salaries & employee benefits due to acquisitions and network expansion % Change vs. % Change vs. 2006 2005 Q4/06 Q4/05 Q3/06 Salaries Stock-based Compensation $2,100 7% $558 8% 4% 164 17 50 19 100%+ Other Performance-based 936 6 217 21 (10) Compensation Pension & Employee Benefits 568 12 141 14 3 Total $3,768 8% $966 12% 3% 2006 vs. 2005: up 8% Higher salaries and employee benefits due to acquisitions, as well as increased performance-based compensation Q4/06: up 12% yr/yr & 3% qtr/qtr " " Yr/yr: higher salaries due to acquisitions and additional sales staff as well as increased performance-based compensation ■ Qtr/qtr: increase in stock-based compensation due to increase in the Bank's share price partially offset by lower performance-based compensation Scotiabank % All Bank 37 Net interest margin 1.97 1.97 1.97 1.98 1.89 Domestic 2.89 2.78 2.74 2.67 2.62 International 4.06 3.93 4.15 4.19 4.20 Scotia Capital 0.76 0.72 0.73 0.70 0.71 All-Bank margin: (9) bps qtr/qtr negative impact of AcG-13 and higher funding costs Domestic margin: (5) bps qtr/qtr ■ primarily from strong mortgage growth at relatively narrower spreads International margin: +1 bps qtr/qtr ■ wider spreads in Latin America & Mexico partly offset by lower spreads in Caribbean & Central America Scotia Capital margin: (5) bps qtr/qtr tighter loan spreads and lower interest recoveries Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 38#20Scotiabank Scotiabank Mexico Continued strong growth Scotiabank Mexico Contribution ($ mm) 2006 2005 Q4/06 Q3/06 Net income in pesos, excluding inflation accounting 5,008 3,445 1,081 1,487 MXP/CAD exchange rate 9.5 9.1 9.8 9.9 Net income in CAD, excluding inflation accounting BNS' share (97%) $525 381 $111 $151 $511 $370 $108 $147 Canadian GAAP and acquisition adjustments $21 $(22) $3 13 Total contribution in CAD $532 $348 $111 $160 Q4/06 strong retail asset growth with residential mortgages up 14% qtr/qtr and credit cards up 11% qtr/qtr • Non-interest expenses up 2% qtr/qtr (excluding tax recovery, f/x impact) due to higher salaries and premises costs related to branch openings, higher profit sharing, increased appraisal and acquisition costs (mainly for credit cards) Scotiabank 39 Earnings in Other segment net income available to common shareholders, $ millions 216 169 2006 vs. 2005 net income: (22)% ■lower net securities gains partially offset by greater reduction in general allowance +$15 mm 74 2005 2006 Q4/05 46 Q3/06 52 Q4/06 The Other category includes Group Treasury and other corporate items, which are not allocated to a business line Q4/06 vs. Q4/05 net income: (30)% ■ lower net securities gains partly offset by greater reduction in general allowance Q4/06 vs. Q3/06 net income: +13% $6 mm increase due to $60 reduction in general allowance and higher securitization revenues largely offset by higher amount of tax- exempt gross-up elimination and AcG-13 40#21Scotiabank $ millions High level of unrealized securities gains Scotiabank Q4/06 Q3/06 Q4/05 Emerging Market Debt 584 536 574 Fixed Income (102) (142) (38) Equities 519 454 499 1,001 848 1,035 Remaining unrealized gain on Shinsei investment: $78 mm 41 Q4/06 Items of note EPS impact (cents) Q4/06 vs. Q4/06 vs. Q3/06 Q4/05 ACG-13 (3) (2) VAT Recovery (5) Reduction of General 4 1 Lower tax rate 3 3 Securities gains (3) (3) Foreign currency (3) translation (4) (4) Business Growth 13 Reported Change (4) cents 9 cents 42 O ACG-13: negative impact in Q4/06 vs. Q3/06 ■ Reduction of General: reduced $60 mm vs. $45 mm in Q4/05 ■ Lower tax rate: higher dividend income & earnings in lower-tax jurisdictions ■ Forex Translation: foreign currency earnings reduced by stronger Canadian $#22Scotiabank $ millions Positive trend in net impaired loans 1,522 388 International Banking ■Domestic Banking Scotia Capital 161 879 201 681 129 125 570 973 183 207 549 245 373 118 2003 2004 2005 2006 after specific allowance 43 Strong capital ratios - despite growth in risk-weighted assets Scotiabank % of risk-weighted assets $ billions 11.1 10.8 197.0 190.3 10.2 10.2 10.0 180.1 168.9 162.8 9.3 9.0 8.5 8.4 8.3 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Tier 1 Tangible Common Equity (TCE) 44 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Loans & Acceptances Residential Mortgages Securities Cash, Other Assets & Off Balance Sheet#23Scotiabank Low variability of trading revenue trading revenue, 2006 # days 40 35 INN ww 15 10 30 25 20 10 50 (8) (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 $ millions ■+95% days had positive results in Q4/06, vs. 85% in Q3/06 ■ 3 days of trading losses in Q4/06, vs. 10 days in Q3/06 45 Scotiabank $ millions Market risk well controlled November 1, 2005 to October 31, 2006 20 20 10 0 (10) (20) ■ Q4/06 Average 1 day VAR: $10.1 mm vs. $9.2 mm in Q3/06 ▪ 2006 Average 1 day VAR: $8.9 mm vs. $7.6 mm in 2005 ■ Q4/06 & 2006: No loss days exceeded the 1 day VAR 46 Actual P&L 1 day VAR Мин