#1Scotiabank Investor Presentation First Quarter, 2008 March 4, 2008 Scotiabank Caution 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 harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may 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. 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," "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 our control, 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, including changes in tax laws; 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 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; consolidation in the Canadian financial services sector; competition, both from new entrants and established competitors; judicial and regulatory proceedings; acts of God, such as earthquakes and hurricanes; 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, see the discussion starting on page 56 of the Bank's 2007 Annual Report. The preceding 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 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. The "Outlook" section in this document is based on the Bank's views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing this section. 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.#2Scotiabank Scotiabank Overview Rick Waugh President & Chief Executive Officer Q1/08 Results Change Q1/08 Yr/Yr Qtr/Qtr Net income ($mm) $835 (18)% (12)% EPS $0.82 (19)% (14)% ROE 18.3% (380) bp (270) bp Productivity ratio 56.5% 290 bp 210 bp 4#3Scotiabank Volatile Capital Markets ... Core Franchises Remain Strong ▪ challenging conditions in capital markets ◉ widening credit spreads ■ continued weak trading results ■ Q1/08 write-downs/reserves of $238 million (pre-tax), $0.17/share ▪ strong core franchises ■ solid market share gains in Domestic ☐ good organic growth & benefit of acquisitions in International high quality loan growth in Scotia Capital ด Scotiabank 5 Performance Review Luc Vanneste Executive Vice-President & Chief Financial Officer 6#4Scotiabank Reported Q1/08 - Items of Note Net Income EPS $835 million $0.82 Pre-tax After-tax ($MM) ($MM) EPS Financial statement line CDOs (68) (56) (0.06) Securities gains (52) & Other Other income (16) SIVS (46) (31) (0.03) Securities gains Securities gains (39) ABCP (44) (30) (0.03) & Trading (5) Monoline (80) (54) (0.05) Trading reserve Total (238) (171) $(0.17) Scotiabank 7 Impact of Forex Translation Impact ($MM) Revenues Non-interest expenses Net income Earnings per share (diluted) Yr/Yr Qtr/Qtr (186) (21) 91 10 (56) (6) (6) cents (1) cent Average exchange rate Q1/08 Q4/07 Q1/07 $US/$CAD 1.01 0.98 0.87 Mexican peso/$CAD 10.99 10.79 9.48 8#5Scotiabank Scotiabank Mexico Lower Contribution in Q1 ($ millions) Q1/08 Q4/07 Q/Q Contribution $117 $128 $(11) (Mexican GAAP) Comments • Growth in retail assets more than offset by higher PCLs & lower government lending Canadian GAAP $(49) $(19) $(30) adjustments ⚫Q1 includes write-down of future tax asset Q4 includes VISA gain Contribution to BNS $68 $109 $(41) Scotiabank Net Income ($ millions) 1,020 954 9 Financial Performance Overview Q1/08 vs. Q1/07 net income: down 18% ■ Revenues down 8%: 835 - + higher NII: volume growth partly offset by lower margin + positive impact of acquisitions impact of forex translation $158 million securities write-downs/losses & $80 million monoline reserve Expenses down 3% ▪ PCLs up $48 million; lower recoveries in Scotia Capital, higher provisions in Domestic & Int'l Q1/08 vs. Q4/07 net income: down 12% ■ Revenues: down 10%, or 3% excl. Q4 gains of $245 million (pre-tax) on VISA restructuring & sale of bond index business Expenses down 7% + lower performance-based compensation + seasonal declines ■ PCLs up $16 million, primarily in Domestic 10 Q1/07 Q4/07 Q1/08#6Scotiabank Revenue - Solid Trends in Core Businesses Revenues (TEB) ($ millions) 3,214 3,294 245* 2,957 1,333 1,117 1,025 1,881 1,932 1,932 Q1/07 Q4/07 Q1/08 Net Interest Income (TEB) Other Income Q1/08 vs. Q1/07 revenues: down 8% ■ NII up 3% on strong volume gains in all businesses, partly offset by negative forex translation & MTM losses ■ Other income down 23%, as higher wealth management revenues were more than offset by: securities write-downs - - lower trading revenues Q1/08 vs. Q4/07 revenues: down 10% ■ NII unchanged, as very strong asset growth was offset by lower tax-exempt dividend income ■ Other income down 25% due mainly to: - - Q4 gains - Visa, bond index business higher write-downs of non-trading securities lower gains on sale of non-trading securities *Gains on VISA & sale of bond index business 11 Scotiabank Strong Asset Growth Continues average balances, $ billions 9% 429 392 104 91 42 39 99 86 99 97 77 Q1/07 87 Q1/08 Residential mortgages Personal loans Business & government (includes acceptances) Securities Other 12 + residential mortgages up 14% + personal loans up 9% + business & gov't loans up 15%#7Scotiabank % 1.91 All Bank 1.93 All-Bank Net Interest Margin 1.86 1.87 1.79 All-Bank margin: (8) bps qtr/qtr Domestic 2.58 2.56 2.58 International 2.35 2.33 4.27 4.32 4.18 4.09 - 4.03 Scotia Capital 0.96 0.79 0.71 0.59 0.69 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Scotiabank Domestic margin: +2 bps qtr/qtr + lower wholesale funding costs + higher prime-BA spreads International margin: (14) bps qtr/qtr lower margins in Latin America, Mexico Scotia Capital margin: (27) bps qtr/qtr - large tax-exempt dividends from transaction in Q4 + wider spreads on short term loans 13 Expenses Well Controlled Non-interest expenses ($ millions) 1,724 1,792 1,669 963 1,003 978 362 327 327 467 394 364 Q1/07 Q4/07 Q1/08 Salaries & employee benefits Premises & technology Other Q1/08 vs. Q1/07 expenses: down 3% + lower performance & stock-based compensation + lower advertising & business taxes higher salaries from ongoing growth initiatives/branch openings & annual increases Q1/08 vs. Q4/07 expenses: down 7% + lower performance-based compensation + lower spending on technology projects, advertising, legal fees, & business taxes + timing of expenses in other categories - partly offset by higher salaries due to acquisitions 14#8Scotiabank Domestic Banking Chris Hodgson Executive Vice-President Domestic Personal Banking 15 Scotiabank 361 Q1/07 Domestic Banking Solid Operating Performance Net Income* ($ millions) 434 92** 342 Q4/07 367 Q1/08 *available to common shareholders Q1/08 vs. Q1/07 net income: up 2% + revenues up 3% strong asset growth partly offset by margin compression due to higher funding costs - expenses up 2% costs related to acquisitions growth initiative spending - moderately higher PCLs due to portfolio growth Q1/08 vs. Q4/07 net income: down 16% + net income up 7% ex. VISA gain ■ revenues unchanged ex. VISA gain + expenses down 4% due to higher Q4 project spending such as advertising & seasonality higher PCLs due to portfolio growth & higher auto lending provisions from TLC acquisition **VISA gain 16#9Scotiabank Domestic Banking Strong Asset Growth Helping Revenue revenues (TEB), $ millions 1,617 111* 1,510 1,471 903 944 326 245 933 282 Q1/08 vs. Q1/07 revenues: up 3% Retail & Small Business + strong asset & deposit growth - margin compression due to higher funding costs Commercial Banking + strong organic asset growth + positive impact of Travelers Leasing Wealth Management + Private Client Group +18% - + Mutual funds +15% Full service brokerage -11% 282 277 295 Q1/07 Q4/07 Retail & Small Business Commercial Banking/Other Wealth Management *VISA gain Scotiabank Q1/08 Q1/08 vs. Q4/07 revenues: down 7% ■ revenues unchanged ex. Q4 VISA gain 17 Strong Market Share Gains Year-over-Year Increase Residential Mortgages +18 basis points Personal Term Deposits +95 basis points Total Personal Deposits +56 basis points Mutual Funds +24 basis points Domestic market share figures as at December 2007 18#10Scotiabank ■ Domestic 2008 Priorities Drive sustainable revenue growth Leverage acquisitions & partnerships to acquire new customers Expanding product offers at Dundee Bank Re-branded Travelers Leasing as "Scotia Dealer Advantage" Western Union relationship Build on strong momentum in wealth management Success in long term fund sales Introduced new mutual funds: Scotia Global Climate Change Fund & ScotiaFunds Advisor Class Expand sales and distribution capacity ° • • Opened 2 new branches in Q1, plan to open 15-20 in 2008 Added new front line staff in retail, small business & wealth management Multi cultural banking unit ■ ด Scotiabank 19 International Banking Rob Pitfield Executive Vice-President International Banking 20#11Scotiabank International Banking Solid Organic Growth & Acquisitions Net Income* ($ millions) 353 316 71** 282 Q1/08 vs. Q1/07 net income: down 11% + revenues up 8% from strong organic volume growth, acquisitions & higher securities gains, partly offset by forex & MTM write-downs expenses up 1% • higher compensation & acquisitions mostly offset by forex higher tax rate & PCLs in Mexico Q1/07 282 Q4/07 Q1/08 available to common shareholders **VISA gain - Q1/08 vs. Q4/07 net income: down 20% Net income flat ex. VISA gain revenues down 5% (up 4% ex. VISA gain) + expenses down 3% • expense recoveries in Latin America ⚫ lower advertising & premises • partly offset by higher compensation & benefits higher tax rate & PCLs in Mexico 21 Scotiabank revenues (TEB), $ millions International Banking Solid Core Revenue Growth 1,090 91* 1,040 967 322 342 339 398 396 398 320 259 230 Q1/07 Q4/07 Q1/08 Mexico Caribbean & Central America Latin America & Asia *VISA gain Q1/08 vs. Q1/07 revenues: up 8% ■ Mexico + volume growth & commercial banking fees negative forex translation ■ Caribbean & Central America + volume growth & margin expansion - negative forex translation ■ Latin America & Asia + acquisitions & strong volume growth + higher securities gains - MTM write-downs & negative forex translation Q1/08 vs. Q4/07 revenues: up 4% ex VISA ■ Mexico + retail volume growth - lower commercial spreads, forex & Q4 VISA gain ■ Caribbean & Central America + volume growth - margin compression & Q4 VISA gain ■ Latin America & Asia + acquisitions & higher securities gains - MTM write-downs & Q4 VISA gain 22#12Scotiabank ◉ International 2008 Priorities Drive sustainable revenue growth - Target new segments - consumer finance, affluent, small business Expand distribution network . •Add 90-100 new branches • Increase use of alternate channels ■ Sustain focus on Mexico ■ Pursue additional acquisition opportunities – P&C banking, insurance, wealth management, consumer finance ต Scotiabank 23 Scotia Capital Stephen McDonald Co-Head Scotia Capital 24#13Scotiabank 294 Scotia Capital Challenging Market Conditions Net Income* ($ millions) 226 35** 187 191 Q1/07 Q4/07 Q1/08 *available to common shareholders **gain on sale of bond index business Q1/08 vs. Q1/07 net income: down 36% revenues 36% lower reserves/write-downs of $122 million - lower derivative & equity trading - lower interest recoveries + partly offset by record foreign exchange & strong fixed income trading + expenses improved by 26% + lower performance-based compensation - lower loan loss recoveries vs. high level in Q1/07 Q1/08 vs. Q4/07 net income: down 17% revenues 22% lower - lower tax-exempt dividend income - gain on sale of bond index business in Q4 + expenses 15% better + lower performance-based compensation 25 Scotiabank Scotia Capital Difficult Environment for Capital Markets Revenue revenues (TEB), $ millions 630 520 43* 331 405 192 151 299 285 254 Q1/07 Q4/07 Global Capital Markets (GCM) Q1/08 Global Corporate & Investment Banking (GC&IB) *gain on sale of bond index business Q1/08 vs. Q1/07 revenues: down 36% ■ revenues down 16% ex. reserve/write-downs Global Capital Markets - $80 million single monoline counter party reserve - $42 million in structured credit write-downs - weaker equity & credit derivative trading + record foreign exchange trading & strong fixed income trading Global Corp. & Investment Banking - lower interest recoveries - lower credit & advisory fees + partly offset by higher loan volumes & spreads Q1/08 vs. Q4/07 revenues: down 22% - lower tax-exempt dividend income & equity trading - gain on sale of bond index business in Q4 - lower securities gains in the U.S. & Europe + partly offset by record foreign exchange trading & strong fixed income trading 26#14Scotiabank ◉ ☐ ☐ - - - Scotia Capital 2008 Priorities Drive sustainable revenue growth Leverage NAFTA capabilities Expand client coverage globally in selected industries . e.g. energy, mining Increase presence in infrastructure finance Capitalize on market opportunities Maintain prudent risk management ต Scotiabank 27 Risk Review Brian Porter Executive Vice-President & Chief Risk Officer 28#15Scotiabank Risk Overview ■ Stable credit quality ■ Update on areas of current focus ◉ ■ U.S. exposure manageable and well contained ■ Some increase in market risk 29 Scotiabank Increase in Credit Losses Quarter over Quarter Specific Provision for Credit Losses ($ millions) 111 95 92 30 45 63 27 25 5 19 30 30 74 77 78 1182 66 (30) 50 (51) 97 91 (10) (10) (10) Q1/07 Q2/07 Scotia Capital Q3/07 Q4/07 Domestic Q1/08 International 30#16Scotiabank Scotiabank Net Impaired Loans Stable Net Impaired Loans 689 ($ millions) 579 579 584 601 392* 239 329 360 357 245 244 215 208 229 95 53 35 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Scotia Capital Domestic International includes $51 million addition from Desarrollo acquisition in Chile 31 Areas of Current Focus Monolines Montreal Accord ABCP CDOs and CLOS Structured Investment Vehicles (SIVS) Hedge Fund Exposure A A bought protection from one monoline on 3 AAA rated CDO tranches . . no sub-prime mortgages notional value: US$937 million $161 million MTM at Q1/08 ($80 million reserve) other direct exposures not material (<$50 million) indirect exposure: US$4.4 billion high quality of underlying assets, minimal exposure (<$50 million) to sub-prime mortgages fair value of holdings: $144 million Q1/08 write-downs ranged up to 30%, reflecting changes in underlying asset value ➤ liquidity lines to conduits total $65 million; drawdowns of $46 million fair value of holdings: $1.4 billion, including $507 million acquired through purchase of Dundee Bank of Canada. Increased from last quarter due to SIV restructuring 100% investment grade equivalent no sub-prime exposure fair value of holdings: $23 million do not sponsor, manage or provide liquidity support to SIVS. majority of activity collateralized no credit issues with counterparties 32#17Scotiabank ☐ U.S. (1) Exposure Manageable and Well Contained no direct exposure to credit cards, personal loans or sub- prime mortgages secured auto loans (GMAC): $5.7 billion bankruptcy remote/individually secured internally modelled to investment grade (>92% AAA) portfolio performing at or above expectations Corporate lending portfolios remain in good shape, asset quality strong (1) excludes US territories 33 VaR by Risk Factor Scotiabank Average 1 day VaR, $ millions Risk Factor Q1/08 Q4/07 Q1/07 Interest rate 13.8 9.2 7.2 4.5 6.1 3.6 Equities Foreign exchange 3.6 3.9 2.6 & Commodities Diversification (5.3) (6.0) (4.2) All-Bank VaR 16.6 13.2 9.2 34#18Scotiabank #days 12 10 8 4 2 0 Trading Revenue Q1/08 Trading Revenue* ($ millions) مارس (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ■ 79% days had positive results in Q1/08 vs 86% in Q4/07 * excludes $80 million reserve taken against a monoline account ต Scotiabank 35 Outlook Rick Waugh President & Chief Executive Officer 36#19Scotiabank Outlook ■ Continuing to invest in three growth platforms - organic expansion - acquisitions ■ Increased focus on cost control Expect stronger second half Maintaining 2008 financial objectives 37 Scotiabank Appendix 38#20Scotiabank Solid Core Growth Offset by Capital Markets Volatility net income available to common shareholders, $ millions Q1/07 Q4/07 Q1/08 434 361 367 353 316 294 282 226 187 Domestic Year over year International Scotia Capital Domestic: Strong asset & deposit growth, partly offset by margin compression International: Strong organic volume growth & acquisitions more than offset by impact of foreign currency translation & higher taxes Scotia Capital: Lower trading revenues & interest recoveries, partly offset by asset growth & lower performance related compensation Scotiabank 39 Impact of Forex Translation Q1/08 vs. Q1/07 Impact ($MM) Domestic International Scotia Capital Other Total Revenues (17) (145) (14) (10) (186) Non-interest 1 72 18 91 Expenses Net income (11) (39) 4 (10) (56) Q1/08 vs. Q4/07 Impact ($MM) Domestic International Scotia Capital Other Total Revenues (3) (16) (2) (21) Non-interest 7 3 10 expenses Net income (2) (5) 1 (6) Average exchange rate $US/$CAD Mexican peso/$CAD Q1/08 Q4/07 Q1/07 1.01 0.98 0.87 10.99 10.79 9.48 40#21Scotiabank Earnings in Other Segment net income available to common shareholders, $ millions 41 (22) Q1/08 vs. Q1/07 net income + higher securitization revenues + lower expenses - negative impact of financial instruments $46mm SIV & $18mm CDO write-downs - lower underlying securities gains Q1/07 Q4/07 Q1/08 (75) Q1/08 vs. Q4/07 net income + lower taxes than Q4, which included a $50mm tax charge + lower expenses + higher securitization revenues - lower underlying securities gains The Other category includes Group Treasury and other corporate items, which are not allocated to a business line. 41 Scotiabank ($ millions) 25 15 5 (5) Trading Results Within 1 Day VaR November 1, 2007 to January 31, 2008 -Actual P&L - 1 day VaR притримати (15) (25) ■ Q1/08: Average 1 day VaR: $16.6 vs. $13.2 in Q4/07 * excludes $80 million reserve taken against a monoline account 42#22Scotiabank Moderate Net Impaired Loan Formations (Q1/08, $ millions) Domestic - Retail 116 - Commercial 20 136 International - Mexico 41 - Caribbean & 10 Central America - Latin America & Asia (4) 47 Scotia Capital Domestic Retail: formations reflect growing portfolio size; underlying credit trends remain strong Domestic Commercial: stable credit quality International: formations primarily in retail portfolios across division, largely mirroring underlying asset growth, partially offset by declassifications in commercial portfolios Scotia Capital: classifications in Canada & the U.S., partially offset by repayments on a number of accounts in Canada, U.S. & Europe - Canada 30 - U.S. & Other 3 33 Total 216 43 Scotiabank High Level of Unrealized Securities Gains* ($ millions) Q1/08 Q4/07 Q1/07 Emerging Market Debt 547 530 667 Fixed Income Equities 89 (14) (80) 259 456 574 895 972 1,161 *before related derivative and other hedge amounts 44