#1Scotiabank Scotiabank Investor Presentation October 31, 2001 1 Overview of 2001 Results Peter Godsoe Chairman & C.E.O. 2#2Scotiabank Q4/01 2001 – record performance - ■ Diluted EPS $1.05 - up 13% vs. Q4/00 ■ ROE 17.0% unchanged from Q4/00 2001 ■ Record results ➤ Net income: +13% year over year ■ ROE 17.3% ☐ Top-line revenue growth: +16% Improved productivity: 53.9% vs. 56.5% Aggressively managed credit quality ➤ achieved year end target for net impaired loans Strong capital and reserves 3 5 Over a decade of record earnings growth Scotiabank Net income, $ millions 633 CAGR 13% 91 92 93 94 95 96 97 40 94 & 97 exclude unusual items 4 98 2,169 99 00 01#3All business lines contributed to growth Scotiabank * Net income, $ millions +9% 960 882 +6% Domestic* includes Wealth Management Scotiabank ROE 2000 2001 686 650 +34% 489 364 Scotia Capital International 5 Met or exceeded performance targets Q4/01 2001 Target 17.0% 17.3% VS. 16-18% EPS Growth 13% 12% VS. 12-15% Productivity 54.6% 53.9% VS. <60% Tier 1 9.3% 6 9.3% VS. 8%+#4Scotiabank Scotiabank Excellent returns to shareholders 5.8% 18.9% 17.8% ☐ TSE 300 ☐ TSE Banks Index Scotiabank 9.2% 20.4% 17.6% 5 year annual return 10 year annual return 7 Performance Review Sabi Marwah Executive Vice-President & Chief Financial Officer 8#5Solid earnings in Q4 Scotiabank Reported net income $MM EPS ($) $566 $1.05 Includes: Corporate Trust gain ($65MM pre-tax) (52) (0.10) Argentina: - higher provision for credit losses ($50MM pre-tax) ― reserve against bonds ($40MM pre-tax) 29 0.06 24 0.04 $567 $1.05 Scotiabank $ billions 10 8 6 9 Strong top-line revenue growth 4 18% 2 Other Income Net Interest Income 0 Q4/00 Q4/01 10 16% 2000 2001#6Scotiabank Higher margins Inc. vs. Inc. vs. Q4/01 Q4/00 2001 2000 2.46% 14bps Net interest margin 2.37% 11bps Increase due to: Inverlat Lower funding costs 6 3 Scotiabank 7 4 Securities income (2) Other 14bps 11 Good growth in other income 3 (1) 11bps $ millions Q4/01 Q4/00 change 2001 2000 change 989 865 14% Reported 4,071 3,665 11% (28) (46) (65) Tax settlement - refund interest Gain on investment securities Gains on sale of businesses (82) (217) (358) (92) (82) 896 819 9% 3,680 3,225 14% 88 100 Inverlat 48 26 85 Cards 80 86 (7) Underwriting 60 80 (25) Trading 68 90 (24) Brokerage Stock transfer 552 537 3 Other 896 819 9% 229 100 170 116 47 352 278 27 412 326 26 307 389 (21) 57 (100) 2,210 2,059 7 3,680 3,225 14% 12#7Scotiabank Tight control of expenses Q4/01 vs. Q4/00 $MM % $199 15.4% Change in expenses (178) (13.8) Inverlat/Chile 15 1.2 Performance-related (mainly SARS*) (12) (0.9) Business restructuring/divestitures 2001 vs. 2000 $MM % $543 10.6% (563) (11.0) (30) (0.6) 151 2.9 $24 1.9% Change in base expenses $101 1.9% * Stock appreciation rights 13 Scotiabank 60 60 55 55 Continued productivity leadership expenses as % of revenues 50 97 40 98 14 99 53.9% 00 00 01#8Scotiabank Capital ratios - best in industry % of risk-adjusted assets 14 11.9 12 13.0 12.2 Total 10 9.3 Tier 1 8 8.6 8.1 CO 6 4 Tangible Common 6.7 7.0 7.8 Equity 2 0 1999 2000 2001 15 Scotiabank $ billions Strong reserves maintained Govt/Corp bonds 0.3 Emerging Mkt. Bonds 0.2 2.2 Q3/01 16 0.5 2.0 Marketable 0.5 Securities General 1.5 Provision Q4/01#9$ Scotiabank Scotiabank Business Line Results 17 Strength in diversification 2000 2001 International 23% 45% 32% International Domestic Domestic 19% 47% 34% Scotia Capital 18 Scotia Capital#10Scotiabank Domestic - steady upward performance Net income, $ millions 256 Q4/00 212 Q3/01 292* Q4/01 * Includes gain on sale of Corporate Trust Scotiabank 19 ◉ Net income up 14% yr/yr Higher margins Strong yr/yr growth in assets mortgage volume +5% ScotiaLine VISA: market share +100bps Lower retail brokerage fees ➤ down 22% yr/yr Excellent expense control 1000 staff savings Superior customer service Customer Satisfaction % Excellent vs. Peer Group - #1 27.1% 22.8% Scotia Advantage 22.7% 19.8% 1998 1999 2000 2001 20#11Scotiabank Scotia Capital - solid quarter Net income, $ millions 198 114 176 ☐ Revenue up 10% yr/yr Q4/00 Q3/01 Q4/01 21 Scotiabank Global Trading +28% Expenses well controlled down 4% yr/yr Credit quality stabilizing falling NILS Strength in Global Trading Revenue, $ millions $812 CAGR 25% $415 Revenues: +45% vs. 2000 derivatives/fixed income +74% foreign exchange: record year #1 dealer in Canadian fixed income Euromoney: top Canadian performer for foreign exchange 1998 1999 2000 2001 22#12Scotiabank International - Good growth in underlying earnings Net income, $ millions 132 89 99 Q4/00 Q3/01 53* 93 3 ◉ Q4/01 Caribbean ➤ net income: +18% vs. Q4/00 Latin America growing contribution from Inverlat ➤ extra reserves of $100MM against Argentina ($90MM in Q4) Asia A steady earnings growth $53MM after-tax reserves against Argentina Scotiabank 23 Caribbean another record year - Net income, $ millions CAGR = 18% 109 252 96 97 98 99 00 01 ◉ 14% increase in net income ➤ 11th record year Top-line revenue growth: +11% - nearly all countries contributed • 70% had double-digit asset growth Expanded network/electronic technology A 7 new branches 14% growth in ABMs 24/7 telephone banking Jamaica & Trinidad 24#13Scotiabank Scotiabank Inverlat - growing earnings ◉ Growing retail business increase in credit cards and other retail loans • +24,000 credit card accounts; +15,000 car loans ➤ increase in retail & commercial deposits: +20% " Record call centre volumes " 545,000 visits to Inverweb in October 2001 5.5 million calls year-to-date: +30% yr/yr Very good penetration of commercial & corporate market loans up 25% Scotiabank VOLKSWAGEN A MAGNA TELMEX. 25 Risk Review John Crean Senior Executive Vice-President Global Risk Management 26 26#14Scotiabank Risk Overview Met net impaired loans target ► $259 million in Q4/01, down $136 million from last quarter Aggressive provisioning in 2001 ■ No material impact of September 11 Argentine risks manageable ➤ $100 million reserve established against Argentine risk • $50 million in specific provisions • $40 million in securities writedown ⚫$10 million other 27 Scotiabank Met net impaired loans target Net impaired loans, $ millions 1,084 696 395 259 Q1/01 Q2/01 Q3/01 Q4/01 28#15Scotiabank Scotiabank Dealt with Q1/01 classifications $ millions Industry Financial Services Entertainment Utilities Apparel Asbestos Steel Media Classification in Q4/01 Q1/01 Balance 345 0 305 0 215 94 125 0 70 61 50 49 45 1,155 204 Total sales in 2001 = $716MM 29 Aggressive provisioning – U.S. portfolio - Specific provisions, $ millions 2001 2000 Scotia Capital - U.S. 671 308 - Other 83 104 Domestic International 246 168 250* 185 1,250 765 * includes $50 million set aside against Argentine exposure 30#16Scotiabank Cable & Telecom exposure Loans & acceptances, $ millions, October 31, 2001 Investment Non-Investment Sector* Grade Grade Total Cable operators 396 1,392 1,788 Regulated telephone 1,003 51 1,054 Unregulated telephone/wireless 270 1,278 1,548 Long-haul fibre cable 165 135 300 CLECS 227 227 1,834 3,083 4,917 Net impaired loans: $93 million * no Paging exposure 31 No material impact of September 11 Scotiabank Loans & acceptances, $ millions, October 31, 2001 Investment Non-Investment Sector Grade Grade Total Airlines operating airlines 162 162 - aircraft finance 234 183 417 - airport operations 54 67 121 Insurance 97 91 188 Hotels/Leisure - hotels 1,171 1,950 3,121 - cruise ships 20 158 178 - - tour operators 2 38 40 1,578 2,649 4,227 2.3% of total loans & acceptances 32#17$ Scotiabank Argentina - risks manageable cross-border exposure, October 31, 2001, $ millions Brady Bonds (collateralized) 143 Lending - high-grade corporate/other 346 - trade/interbank 199 Investment - Scotiabank Quilmes 326 1,014 % of total loans & acceptances 0.5% Additional $100 million in reserves 33 Scotiabank # days 40 Low variability of trading revenue... Net trading revenue, fiscal year 2001 35 30 25 45 5th percentile 95th percentile 20 I 15 10 T 5 0 عالمية (7) (5) (3) (1) 135 7911 $ millions 34 13 15#18Scotiabank 20 250 15 10 ...reflecting moderate market risk $ millions, November 1, 2000 to October 31, 2001 Actual P&L -VaR 1 day LO 5 0 -5 -10 -15 -20 Scotiabank 35 Risk summary ■ Aggressive provisioning in 2001 against U.S. loans portfolio stable Monitoring events in Argentina closely ■ Other portfolios: A Domestic Retail: excellent Canada Commercial/Corporate: stable Other International: stable 36 глу#19$ Scotiabank Outlook Peter Godsoe Chairman & C.E.O. 37 Scotiabank Expect another record year in 2002 ☐ Economic slowdown ➤ pickup expected in second half of 2002 Closely managing credit portfolios specific credit losses for 2002 on par with 2001 ■ 2002 performance targets EPS growth: 7% to 12% ROE: 15% to 17% 38#20Scotiabank This presentation includes forward-looking statements about objectives, strategies, and expected financial results. Such forward-looking statements are inherently subject to risks and uncertainties beyond the Bank's control, including but not limited to economic and financial conditions globally, regulatory developments in Canada and elsewhere, technological developments, and competition. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements, and the reader is cautioned not to place undue reliance on such forward-looking statements. 39