#1Investor Presentation tiabank nium Be FIRST QUARTER 2016 March 1, 2016 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 2015 Annual Report under the headings "Overview-Outlook," for Group Financial Performance "Outlook," for each business segment "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 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; critical accounting estimates and the effects of changes in accounting policies and methods used by the Bank (See "Controls and Accounting Policies-Critical accounting estimates" in the Bank's 2015 Annual Report, as updated by this document); 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; consolidation in the Canadian financial services sector; 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 starting on page 66 of the Bank's 2015 Annual Report. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2015 Annual Report under the heading "Overview - Outlook," as updated by this document; and for each business segment "Outlook". 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 Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf. Additional information relating to the Bank, including the Bank's Annual Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC's website at www.sec.gov. Scotiabank®#3Overview tiabank nium Be Brian Porter President & Chief Executive Officer Scotiabank®#4Q1 2016 Overview ● Strong start to the year . Net income of $1.8 billion • Diluted EPS of $1.43 per share ROE of 13.8% Revenue growth of 9% year-over-year Capital position remains strong at 10.1% Quarterly dividend increased by 2 cents to $0.72 per share Scotiabank® 4#5Delivering on our key strategic priorities Customer Experience Leadership Low Cost by Design Digital Transformation Business Mix LO 5 Scotiabank®#6tiabank nium Be Financial Review Sean McGuckin Chief Financial Officer Scotiabank#7Q1 2016 Financial Performance $ millions, except EPS Q1/16 Q/Q Y/Y1 Net Income $1,814 -2% +5% . Diluted EPS $1.43 -1% +6% • Revenues¹ $6,514 +5% +9% $3,568 +9% +12% Expenses Productivity Ratio 54.8% +180bps +110bps Core Banking Margin² 2.38% +3bps -3bps Dividends Per Common Share +$0.02 +$0.02 +$0.02 $0.70 $0.70 $0.68 $0.68 $0.66 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Announced dividend increase (1) Taxable equivalent basis Highlights Diluted EPS growth of 6% Y/Y Revenue growth of 9% Y/Y1 Solid asset growth in business segments Positive impact of FX translation and impact of acquisitions Higher banking fees, Trading revenues and wealth management/insurance revenues, partly offset by lower net gains on investment securities and lower underwriting/advisory fees. Expense up 12% Y/Y, or up 5% Y/Y excluding the impact of FX translation and acquisitions Technology-related expenses, driven by focused investment in business initiatives Quarterly dividend increased to $0.72 per share 7 Scotiabank®#8Capital - Strong Position Basel III Common Equity Tier 1 (CET1) (%) • 10.3 10.6 10.4 10.3 10.1 III Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 CET1 Risk-Weighted Assets ($B) 358 348 335 329 374 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 8 · • Highlights Internal capital generation of $0.9 billion Repurchased 1.2 million shares Quarterly dividend of $0.72 per share reflects a dividend payout ratio of approximately 50% CET1 risk-weighted assets were up $16 billion Q/Q • • Impact of FX translation Growth in retail and business lending Acquisitions Basel III Leverage ratio of 4.0% Capital position remains strong Scotiabank®#9Canadian Banking Net Income ($MM) 815 829 863 837 875 IIIII Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 • • Highlights Net income up 7% Y/Y Loan growth of 4% Y/Y Ex. Tangerine run-off portfolio, up 6% Double digit growth in credit cards, auto lending and commercial banking Deposits up 7% Y/Y . Retail chequing was up 11% and savings deposits were up 15% NIM up 19 bps Y/Y • Impact of acquisition • Higher spread personal lending growth. • 297 298 301 304 307 14 13 12 10 Average Assets ($B) Net Interest Margin (%) • • 2.35 9 2.26 2.25 2.26 2.16 283 285 289 294 298 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Tangerine run-off mortgage portfolio (1) Attributable to equity holders of the Bank Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Run-off of low spread Tangerine mortgages PCL loss ratio up 3bps Y/Y Expenses up 9% Y/Y or 6% excluding acquisition Technology/business investment Partially offset by benefits realized from cost reduction initiatives AUM up 4% Y/Y and AUA flat Y/Y Flat reported operating leverage Strong volume growth and margin expansion Scotiabank®#10International Banking 1 Net Income ($MM) 447 417 485 504 505 • Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Average Assets ($B) Net Interest Margin (%) 143 135 128 129 4.77 120 4.71 4.67 4.70 4.57 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 (1) Attributable to equity holders of the Bank 10 • Highlights Net Income up 21% Y/Y Strong loan, deposit and fee income growth in Latin America • Positive impact of FX translation Partly offset by low tax benefits Loans up 19% and deposits up 27% Y/Y • Ex. FX translation, total loans were up 12% (Latin America was up 17%) and total deposits were up 18% NIM down 14 bps Y/Y • • Asset mix Margin compression in Latin America, partly offset by acquisition impact PCL loss ratio down 19 basis points Y/Y Expenses up 17% Y/Y, or up 6% Y/Y excluding the impact of FX translation and acquisitions • Primarily due to business volumes and inflationary increases Positive operating leverage of 0.9% Strong asset and deposit growth in Latin America Scotiabank®#11Global Banking and Markets Net Income ($MM) • Highlights Net Income down 9% Y/Y 449 404 375 366 325 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Average Loans² ($B) Net Interest Margin³ (%) 75 81 1.72 71 70 65 1.64 1.62 1.60 1.58 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 (1) (2) (3) Attributable to equity holders of the Bank Average Business & Government Loans & Acceptances Corporate Banking only 11 • • • • Lower contributions from equity, FX and investment banking . Higher PCLs, partly offset by stronger results in precious metals and the positive impact of FX translation Revenue up 2% Y/Y Loans up 24% Y/Y, or up 10% excluding impact of FX translation NIM down 14 bps Y/Y Expenses up 9% Y/Y . . Excluding negative impact from FX translation, expenses were up 4% Higher salaries and technology costs, partly offset by lower performance-based compensation Improved results notwithstanding challenging market conditions Scotiabank®#12(1) (2) Other Segment¹ 2 Net Income ($MM) 117 72 43 32 12 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Highlights Year-over-year net income was lower driven by smaller contributions from asset/liability management activities, partly offset by lower expenses and lower taxes Includes Group Treasury, smaller operating segments, and other corporate items which are not allocated to a business line. The results primarily reflect the net impact of asset/liability management activities Attributable to equity holders of the Bank 12 Scotiabank®#13tiabank Risk Review Stephen Hart nium Be Chief Risk Officer Scotiabank#14Risk Review . . . Underlying credit fundamentals remain relatively stable - PCL ratio – PCL ratio increased 3 basis points Q/Q and Y/Y (Excluding impact of collective allowance in Q4/15) Gross impaired loans of $5.1 billion were up 9% Q/Q, or up 5% excluding the impact of FX translation . GIL ratio up 6 basis points Q/Q, or up 3 basis points excluding the impact of FX translation Net formations of $806 million was up from $572 million in Q4/15 Market risk remains well-controlled . Average 1-day all-bank VaR of $15.2 million, up from $13.1 million in Q4/15 14 Scotiabank®#15PCL Ratios (Total PCL as a % of Average Net Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Loans & Acceptances) Canadian Banking Retail 0.24 0.25 0.26 0.26 0.28 Commercial 0.12 ☐ 0.13 0.08 0.15 0.14 Total 0.23 0.24 0.23 0.24 0.26 International Banking Retail (1) 2.37 2.28 2.37 2.18 2.09 Commercial (1) 0.35 0.19 0.26 0.26 0.28 Total 1.33 1.19 1.27 1.17 1.14 Total - Excluding credit marks 1.40 1.21 1.34 1.29 1.24 Global Banking and Markets 0.08 0.08 0.08 0.14 0.27 All Bank 0.42 0.41 0.42 0.42 (2) 0.45 (2) €2 (1) Colombia small business portfolio reclassed to Retail from Commercial - prior periods have been restated Excludes collective allowance increase; including collective allowance increase, All Bank PCL ratio was 0.47 Scotiabank® 15#16Energy Exposures Sector Amount (in $B) % E&P $10.4 58% Midstream $3.4 19% Downstream $2.1 12% Services $2.0 11% Total Drawn $17.9 100% • • Drawn corporate energy exposure is approximately 60% investment grade and 3.6% of our total loan book Undrawn commitments of $14.1 billion are approximately 75% investment grade Focus on select non-investment grade E&P and Services accounts • Approximately two-thirds of focus accounts have issued debt ranking below the Bank's senior position Exposures relate to loans and acceptances outstanding as of January 31, 2016 and to undrawn commitments attributed/related to those (1) drawn loans and acceptances. 16 Scotiabank®#17tiabank nium Be Appendix Scotiabank#18Diluted EPS Reconciliation No notable items of note this quarter $ per share Q1/16 Reported Diluted EPS $1.43 Add: Amortization of Intangibles $0.01 Adjusted Diluted EPS $1.44 188 Scotiabank®#19Impact of Recently Closed Acquisition ● On November 16, 2015, the Bank closed the acquisition of: ● • JPMorgan Chase credit card portfolio in Canada Q1/16 earnings impact of $15 million In $mm Revenues1 Expenses Net Income Q1/16 $54 ($39) $15 Average Retail Loans $1,299 (1) Acquisition accounted for 6bps Y/Y increase in Canadian Banking NIM. Scotiabank® 19#20Core Banking Margin (TEB)1 2.41% 2.41% 2.40% 2.38% 2.35% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 (1) Year-over-year The decline in core banking margin was driven by higher levels of liquid assets, partly offset by higher margins in Canadian Banking. Represents net interest income (TEB) as a % of average earning assets excluding bankers acceptances and total average assets relating to the Global Capital Markets business within Global Banking & Markets 20 20 Scotiabank®#21Canadian Banking - Revenue & Volume Growth Revenues (TEB) ($ millions) +9% Average Loans & Acceptances ($ billions) +4%1 Y/Y 35 39 40 Y/Y 66 70 72 -14 10 - 9 2,977 2,732 2,872 174 178 179 803 788 771 Q1/15 473 503 450 Business Q4/15 Q1/16 ■Personal & credit cards 1,511 1,611 1,671 Tangerine mortgage run-off Residential mortgages Average Deposits ($ billions) +7% Q1/15 Q4/15 Q1/16 Y/Y 60 62 66 ■Retail ■Commercial Wealth 146 154 155 (1) Excluding Tangerine run-off portfolio, loans & acceptances increased 6% year-over-year 21 Q1/15 Q4/15 Q1/16 Personal Non-personal Scotiabank®#22Canadian Banking - Net Interest Margin 2.35% 2.26% 2.25% 2.26% 2.16% Year-over-Year 1.47% 1.59% 1.59% 1.60% 1.66% 0.95% 0.92% 0.90% 0.89% 0.92% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Total Canadian Banking Margin -Total Earning Assets Margin Total Deposits Margin Net Interest Margin was up 19bps, driven primarily from higher earning asset margin, partly offset by deposit margin compression. The positive impact from acquisitions was 6bps. 22 22 Scotiabank®#23International Banking - Revenue & Volume Growth Revenues (TEB) ($ millions) Average Loans & Acceptances² ($ billions) +19% Y/Y +18% 22 Y/Y 22 19 27 2,4501 26 23 2,357 2,075 45 51 55 892 847 726 Q1/15 Q4/15 Q1/16 Business ■Residential mortgages Personal & credit cards 1,349 1,510 1,558 Average Deposits³ ($ billions) +27% Y/Y 33 31 27 Q1/15 Q4/15 Q1/16 53 47 41 Net interest income Non-interest revenue (1) Includes $30 million of negative goodwill related to the acquisition of Discount Bank in Uruguay and was entirely offset by integration charges Q1/15 (2) Colombia small business portfolio reclassed to Retail from Commercial - prior periods have been restated (3) Includes deposits from banks Non-personal ■ Personal Q4/15 Q1/16 Scotiabank® 23 23#24International Banking - Regional Growth Revenues (TEB) ($ millions) +18% Y/Y Average Loans & Acceptances ($ billions) +19% Y/Y 31 33 28 2,4501 2,357 108 90 68 71 59 2,075 74 724 712 605 Q1/15 Q4/15 Q1/16 Latin America ■Caribbean & Central America Constant FX 1,396 1,555 1,618 Retail Commercial³ Total Loan Volumes 2 Y/Y Latin America4 18% 17% 17% Q1/15 Q4/15 Q1/16 C&CA 2% -4% 0% Asia ■Caribbean & Central America Total 12% 11% 12% ■Latin America (1) Includes $30 million of negative goodwill related to the acquisition of Discount Bank in Uruguay and was entirely offset by integration charges (2) Colombia small business portfolio reclassed to Retail from Commercial - prior periods have been restated (3) Excludes bankers acceptances 2 F (4) Excluding impact of acquisitions - Discount (Uruguay), Cencosud (Chile), Peru Citi - and at constant FX, retail and total bank volumes were up 12% and 15% respectively 24 Scotiabank®#25Global Banking and Markets - Revenue & Volume Growth Revenues (TEB) ($ millions) Average Loans & Acceptances ($ billions) +24% +2% Y/Y Y/Y 81 75 65 1,032 1,048 929 464 505 409 Q1/15 Q4/15 Q1/16 All-Bank Trading Revenue (TEB, $ millions) 584 453 437 527 520 407 353 348 Q1/15 Q4/15 ■Business Banking Q1/16 ■Capital Markets 25 45 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 (1) 10% on a constant currency basis Scotiabank®#26Global Wealth Management Net Income ($ millions) +2% Y/Y Assets Under Management ($ billion) +3% Y/Y 174 179 179 203 198 195 Q1/15 Q4/15 Q1/16 26 26 Q1/15 Q4/15 Q1/16 Assets Under Administration ($ billion) +2% Y/Y 380 391 386 Q1/15 Q4/15 Q1/16 Scotiabank®#27Economic Outlook in Key Markets Real GDP (Annual % Change) 2000-14 Country 2015F 2016F 2017F Avg. Mexico 2.3 2.5 2.5 3.5 Peru 5.4 3.0 3.5 4.4 Chile 4.3 2.1 1.9 2.9 Colombia 4.3 3.2 2.9 3.2 2000-14 2015F 2016F 2017F Avg. Canada 2.2 1.2 1.1 2.5 U.S. 1.9 2.4 2.2 2.7 Source: Scotia Economics, as of February 1, 2016 27 27 Scotiabank®#28Provisions for Credit Losses ($ millions) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Canadian Retail 154 157 165 166 181 Canadian Commercial 11 12 8 14 13 Total Canadian Banking 165 169 173 180 194 International Retail 246 242 262 252 252 International Commercial 39 24 31 32 39 Total International Banking 285 266 293 284 291 Total - Excluding credit marks 301 270 309 315 318 Global Banking and Markets 13 13 14 27 54 All Bank 463 448 480 491 539 All Bank - Excluding International Banking credit marks 479 452 496 522 566 Increase in Collective Allowance 0 0 0 60 0 All Bank 463 448 480 551 539 PCL ratio (bps) - Total PCLS as a % of Average Net Loans & Acceptances Excluding Collective Allowance Including Collective Allowance 42 41 42 42 45 42 41 42 47 45 Scotiabank® 28 28#291 Net Formations of Impaired Loans ($ millions) 900 800 700 600 500 400 300 200 100 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Net Formations -Average Scotiabank® (1) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico. 29 29#30Gross Impaired Loans" ($ billions) 1 5.4 5.1 4.8 4.5 4.2 3.9 3.6 3.3 3.0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 GILS as % of Loans & Bas (RHS) GILS (LHS) (1) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico. 30 30 1.05% 1.00% 0.95% 0.90% 0.85% 0.80% 0.75% Scotiabank®#31Empty#32Canadian Residential Mortgage Portfolio (1) (2) €2 (Spot Balances as at Q1/16, $ billions) $92.8 $9.6 Total Portfolio: $190 billion Insured Uninsured 48% 52% Average LTV of uninsured mortgages is 53%¹ $83.2 $31.0 $5.9 $30.1 $3.5 $15.2 $1.6 $12.0 $25.1 $26.6 $0.2 $8.9 $0.6 $13.6 $11.8 Ontario B.C. & Territories Alberta Quebec Atlantic Provinces $8.3 Manitoba & Saskatchewan Freehold - $169B ■Condos - $21B LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet HPI data. Some figures on bar chart may not add due to rounding 32#33$6.2 International Retail Loans and Provisions (Spot Balances as at Q1/16, $ billions¹) $19.0 $1.1 $4.5 Total Portfolio₁ = $50 billion; 68% secured $9.3 -$0.5 $9.6 In $13.4 $2.6 ■Credit Cards ($5.3B) ■Personal Loans ($15.4B) ■Mortgages ($28.9B) $1.2 $7.0 $2.9 $1.2 $4.7 $3.3 $1.3 $5.5 $2.1 $2.5 $1.3 C&CA Mexico Chile 3 3 Peru Colombia 4 PCL2 Q1/16 Q4/15 Q1/16 Q4/15 Q1/16 Q4/15 Q1/16 Q4/15 Q1/16 Q4/15 $ millions 54 57 56 50 22 31 61 63 49 39 % of avg. net loans (bps) 121 132 242 226 97 145 364 391 432 340 (1) Total Portfolio includes other smaller portfolios (2) Excludes Uruguay PCLs of approximately $11 million (3) Includes the benefits from Cencosud and Citibank credit marks, excluding the credit marks, Chile's ratio would be 162 bps for Q1/16 and 212 bps for Q4/15 and Peru's ratio would be 434 bps for Q1/16 and 477 bps for Q4/15 Scotiabank® (4) Colombia Small Business portfolio reclassed to Retail from Commercial - Prior period restated 33#34Millions -10 -15 Q1 2016 Trading Results and One-Day Total VaR 30 Q1 2016 Trading Results and One-Day Total VaR 25 20 15 10 5 0 -5- -1-Day Total VaR Actual P&L мутил -20 Average 1-Day Total VaR -25 Q1/16: $15.2 MM Q4/15: $13.1 MM Q1/15: $11.2 MM 34 Scotiabank®#35Q1 2016 Trading Results and One-Day Total VaR (# days) 12 10 8 4 2 0 III 0 1 2 3 4 5 6 7 8 9 10 11 • One trading loss day in Q1/16 35 55 12 16 18 20 24 ($ millions) Scotiabank®#36FX Movements versus Canadian Dollar Canadian (Appreciation) / Depreciation Currency Q1/16 Q4/15 Q1/15 Q/Q Y/Y Spot U.S. Dollar 0.713 0.765 0.787 6.7% 9.4% Mexican Peso 12.94 12.63 11.79 -2.4% -9.7% Peruvian Sol 2.479 2.514 2.411 1.4% -2.8% Colombian Peso 2,351 2,217 1,920 -6.0% -22.5% Chilean Peso 509.0 528.3 499.1 3.7% -2.0% Average U.S. Dollar 0.729 0.760 0.859 4.1% 15.1% Mexican Peso 12.57 12.65 12.27 0.7% -2.4% Peruvian Sol 2.466 2.456 2.545 -0.4% 3.1% Colombian Peso 2,317 2,284 1,968 -1.4% -17.7% Chilean Peso 517.5 522.4 522.9 0.9% 1.0% 36 86 Scotiabank®