#1Investor Presentation Scoti You're rek nk Second Quarter, 2014 May 27, 2014 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 United States 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 include, but are not limited to, statements made in this document, the Management's Discussion and Analysis in the Bank's 2013 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, 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; significant market volatility and interruptions; the failure of third parties to comply with their obligations to us and our affiliates; the effect of changes in monetary policy; legislative and regulatory developments in Canada and elsewhere, including changes in tax laws; the effect of changes to our credit ratings; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions and liquidity regulatory guidance; operational and 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; changes in accounting policies and methods the Bank uses to report its financial condition and financial performance, including uncertainties associated with critical accounting assumptions and estimates (see "Controls and Accounting Policies - Critical accounting estimates" in the Bank's 2013 Annual Report); the effect of applying future accounting changes (see "Controls and Accounting Policies - Future accounting developments" in the Bank's 2013 Annual Report); 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 r 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 "Risk Management" section starting on page 60 of the Bank's 2013 Annual Report. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2013 Annual Report under the headings "Overview - Outlook", and for each business segment "Outlook". These "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 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. 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 1#2Overview Scoti nk Brian Porter President & Chief Executive Officer Scotiabank Q2 2014 Overview Strong results Net income of $1.8 billion, up 14% from last year - Diluted EPS up 14% to $1.39 - ROE: 16.3% Revenue growth of 10% from last year Capital position continues to be strong at 9.8% Share buyback program of up to 1% announced Quarterly dividend maintained at $0.64 per share 4 Scotiabank 2#3Strategic Priorities Canadian Banking International Banking Global Wealth & Insurance Global Banking & Markets Transform retail and deepen relationships within targeted customer segments • Build on our expertise in payments and accelerate credit card growth • Leverage commercial banking platform to achieve greater market penetration Extend Tangerine's offerings to meet banking needs of self-directed customers Improve operational excellence and deliver sustained cost savings • Leverage expertise in key markets with a focus on becoming the primary bank to our customers ⚫ Optimize our operating model to maximize efficiency to best serve our customers • Make it easier for our customers to do business with us ⚫ Drive growth and scale in our priority region of Latin America ⚫ Focus on acquiring and building loyal and profitable client relationships ⚫ Expand international capabilities in key wealth and insurance businesses Continue to build scale in global asset management ⚫ Drive growth in Global Transaction Banking through integrated cash management, payments and trade finance solutions Strengthen customer relationships and product capabilities to enhance profitability Optimize our coverage model to drive cross-sell ⚫ Grow our business in regions that capitalize on the Bank's existing geographic footprint Financial Review Scoti You' Sean McGuckin Chief Financial Officer 5 Scotiabank Scotiabank 3#4Q2 2014 Financial Performance $ millions, except EPS Revenues 1 Q2/14 Q/Q Y/Y $5,809 1% 10% Expenses $2,995 (4%) 5% Net Income $1,800 5% 14% Diluted EPS $1.39 5% 14% ROE 16.3% Productivity Ratio 1 51.6% 90 bps (20 bps) (260 bps) (230 bps) Basel III CET1 Ratio 9.8% 34 bps 121 bps Dividends Per Common Share +$0.02 Highlights ■ Strong EPS growth Y/Y Strong results in CB and GWI with solid performances from IB and GBM ■ Revenue growth of 10% Y/Y Higher asset growth and core banking margin Increased banking and wealth management fees Underwriting fees, trading revenues and gains on investment securities also up Positive impact of FX ■ Expenses up 5% Y/Y Higher staffing levels and compensation costs Technology and marketing costs up to support Tangerine rebranding and business growth Positive operating leverage of 2.1% YTD +$0.02 $0.64 $0.62 $0.62 $0.60 ■ Basel III CET1 ratio of 9.8% $0.60 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Announced dividend increase (1) Taxable equivalent basis Capital Basel III Common Equity Tier 1 (%) 7 Strong results across our businesses Scotiabank 8.9 9.1 9.4 9.8 8.6 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Risk-Weighted Assets ($B) 281 282 288 302 300 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Highlights Q2/14 internal capital generation of $921 million ■ Risk-weighted assets down $2 billion from previous quarter to $300 billion Reduction due to FX Higher on balance sheet lending amounts, offset by lower investment securities/ securitizations and lower loan commitments ■ Continuing to deploy capital into the four business lines ■Share buyback announced for up to 1% of outstanding shares Capital position remains strong 8 Scotiabank 4#5Canadian Banking Net Income ($MM) 575 565 550 555 507 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Average Assets ($B) 273 274 276 277 278 Highlights ■ Strong quarter, net income up 12% Y/Y ■ Good loan growth of 3% Y/Y Double digit growth in credit card and consumer auto loan volumes Mortgage growth largely offset by the Tangerine mortgage run-off ■NIM up 3 bps Q/Q, 8 bps Y/Y Net Interest Margin (%). Slight increase in PCLs due to mix 2.02 2.05 2.06 2.07 2.10 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Expenses up only 2.7% Y/Y excluding Tangerine brand transition costs ■ Positive operating leverage of 1.9% YTD Margin expansion and positive operating leverage (1) Attributable to equity holders of the Bank 9 Scotiabank International Banking 1 Net Income ($MM) Highlights ■ Solid quarter, net income flat Y/Y 490 - 415 90 410 401 416 400 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Net one-time benefit International Banking Average Assets ($B) Lower contributions from associated corporations ■ Strong loan growth of 14% Y/Y Broad-based growth in LatAm & Asia ■ Very good deposit growth of 16% Y/Y ■ PCL ratio up 4 bps Y/Y, primarily driven by commercial PCLs and Colpatria credit mark run-off Net Interest Margin (%) NIM slightly higher this quarter, but 137 143 122 122 126 4.24 4.14 3.90 3.93 4.00 - Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 down 24 bps Y/Y Lower interest rates in key markets Regulatory changes Shift in asset mix Expenses down 1% Y/Y Good expense control across all regions Strong asset growth and expense control offset by lower NIM and higher PCLS (1) Attributable to equity holders of the Bank 10 Scotiabank 5#6Global Wealth & Insurance 1 Net Income ($MM) 345 327 310 310 302 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 AUM ($B) AUA ($B) 362 159 153 145 135 135 313 311 326 338 Highlights Strong quarter, net income up 11% Y/Y Wealth Management revenue grew by 14% Y/Y Insurance revenue up 4% Y/Y ■ 18% AUM & 16% AUA growth Y/Y Higher net sales Improved financial markets Acquisition of AFP Horizonte in Peru Increasing ROE ■ Positive operating leverage of 0.8% YTD Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 (1) Attributable to equity holders of the Bank 11 Strong performance in asset management businesses Scotiabank Global Banking & Markets 1 Net Income ($MM) 378 385 352 337 339 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Average Loans² ($B) Net Interest Margin³ (%) Highlights ■ Net income up 9% Y/Y Stronger investment banking and fixed income results Securities gain in U.S. lending Partially offset by higher tax rate ■ Loan growth of 8% Y/Y ■ NIM down 3 bps Q/Q, 25 bps Y/Y ■ Credit performance remains strong 40 39 38 40 43 2.36 2.39 2.10 2.14 2.11 - ■ Focus on managing expenses Expenses down 1% Y/Y after adjusting for FX translation Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 (1) Attributable to equity holders of the Bank (2) Average Business & Government Loans & Acceptances (3) Global Corporate & Investment Banking only 12 Good growth in fixed income and investment banking Scotiabank 60#7Other Segment 2 Net Income ($MM) (1) (2) Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 32 16 13 Highlights ■ Net income up Y/Y - Higher revenues from asset/liability management Higher net gains on investment securities (37) (62) 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 Risk Review Scoti You' Stephen Hart Chief Risk Officer 13 Scotiabank Scotiabank 7#8Credit Quality Credit fundamentals remain strong - Modest increase in PCL ratio - up 2 bps Q/Q to 36 bps Loss rates in Canadian Banking up slightly International Banking loss rates up due to higher provisions in the Caribbean, partially offset by decreases in Latin America GBM credit performance continues to be strong Increase in net formations of impaired loans to $598 million Higher formations in International Retail and Commercial - Market risk remains well-controlled - - Average 1-day all-bank VaR: $18.1MM vs. $19.8MM in Q1/14 Two trading loss days in Q2/14 15 Provisions for Credit Losses Scotiabank ($ millions) Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Canadian Retail 106 103 106 118 127 Canadian Commercial 30 5 10 16 13 136 108 116 134 140 International Retail 180 177 170 187 196 International Commercial 14 17 37 32 34 194 194 207 219 230 Global Wealth & Insurance 1 1 Global Banking & Markets 12 11 (2) 3 5 Total 343 314 321 356 375 PCL ratio (bps) on impaired loans 35 31 31 34 36 Note: International Banking's total includes the impact of Colombian purchased portfolio. The Bank expects the PCL ratio to rise with the maturity of the acquired portfolio. See page 28 of the 2013 Annual Report. 16 Scotiabank 8#9Canadian Residential Mortgage Portfolio ($ billions, as at April 30, 2014) $94 $9 32 (1) (2) Total Portfolio: $188 billion Insured Uninsured 54% 46% Average LTV of uninsured mortgages is 55%¹ $85 $30 $5 $29 -$3 $16 $25 $26 -$1 $12 -$0 $8 $14 $12 -$0 $8 Ontario B.C. & Territories Alberta Quebec Atlantic Provinces Manitoba & Saskatchewan Condos $19B Freehold - $169B LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet and CREA data Some figures on bar chart may not add due to rounding Appendix Scoti You' 17 Scotiabank Scotiabank 16 9#10Core Banking Margin (TEB)¹ 2.42% 2.30% 2.33% 2.31% 2.35% Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Quarter-over-Quarter Improved margins in Canadian Banking and International Banking Lower funding and liquidity cost in Other segment as maturing high rate deposits were replaced with lower interest rates (1) Represents net interest income (TEB) as a % of average earning assets excluding bankers acceptances and total average assets relating to the Global Capital Markets business within Global Banking & Markets. 19 Scotiabank Canadian Banking - Revenue & Volume Growth Revenues (TEB) ($ millions) Average loans & acceptances ($ billions) 3% Y/Y 7% Y/Y 30 31 32 52 56 57 1,837 1,826 24 19 19 1,703 422 430 162 168 168 386 1,317 1,415 1,396 Q2/13 Q1/14 ■Commercial Banking ■Retail & Small Business Business Personal & credit cards Tangerine mortgage run-off Residential mortgages Average deposits ($ billions) 1% Y/Y 53 54 53 Q2/14 134 135 135 20 Q2/13 Personal Q1/14 ■Non-personal Q2/14 Scotiabank 10#11International Banking - Revenue & Volume Growth Revenues (TEB) ($ millions) Average loans & acceptances ($ billions) (1) 14% Y/Y 2% 18 17 Y/Y 16 20 21 19 1,844 1,853 1,874 127 117 100 58 64 67 433 436 473 1,244 1,303 1,338 Q2/13 Q1/14 Q2/14 Income from investments in associated corps Non-interest revenue Net interest income Including deposits from banks 21 Q2/13 Q1/14 Q2/14 Business Residential mortgages Personal & credit cards Average deposits 1 ($ billions) 16% Y/Y 23 23 43 39 33 24 24 47 Q2/13 Q1/14 Q2/14 Non-personal Personal Scotiabank International Banking - Regional Growth Revenues (TEB) ($ millions) Average loans & acceptances ($ billions) 14% Y/Y 2% 23 24 Y/Y 19 26 26 27 219 183 174 48 52 55 485 499 482 Q2/13 Q1/14 Q2/14 Latin America Caribbean & Central America Asia 1,140 1,171 1,218 Constant FX Volume growth Y/Y Retail Commercial Total Latin America 13% 11% 12% C&CA 1% -9% -4% Q2/13 ■Asia Q1/14 Q2/14 Asia N/A 19% 19% Caribbean & Central America Latin America Total 9% 10% 9% (1) Excludes bankers acceptances 22 Scotiabank 11#12Global Wealth & Insurance - Revenues & Volumes Revenues (TEB) ($ millions) Mutual Fund Market Share in Canada (% vs. Schedule 1 Banks) 1 12% Y/Y 1,117 1,090 32.8% 996 178 179 172 18.5% 17.5% 15.7% 11.7% 3.8% RBC TD Scotia CIBC BMO National Bank Spot AUM ($ billions) 912 938 824 Q2/13 Q1/14 Wealth Management Insurance 18% Y/Y Q2/14 153 159 135 Q2/13 Q1/14 (1) Source: IFIC member firms as of March 2014. Excludes Scotiabank's investment in Cl Financial and Tangerine. May not add due to rounding. 23 Q2/14 Scotiabank Global Banking & Markets - Revenues & Volumes Revenues (TEB) ($ millions) Average loans & acceptances ($ billions) 8% Y/Y 11% Y/Y 978 924 40 40 43 885 467 391 448 Q2/13 494 476 511 Q2/13 Q1/14 Q2/14 ■Global Corporate & Investment Banking Global Capital Markets 24 Q1/14 Business & Government Q2/14 All-Bank Trading Revenue (TEB, $ millions) 376 390 407 402 425 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Scotiabank 12#13Economic Outlook in Key Markets Real GDP (Annual % Change) 2000-12 Country 2013 2014F 2015F Avg. Mexico 2.4 1.1 2.7 3.7 Peru 5.5 5.6 5.3 5.6 Chile 4.5 4.1 3.6 4.3 Colombia 4.2 4.3 4.5 4.6 Costa Rica 4.3 3.6 3.9 4.1 Dominican Republic 5.2 4.1 4.5 4.5 Thailand 4.2 2.8 2.0 4.0 2000-12 2013 2014F 2015F Avg. Canada U.S. 2.2 2.0 2.2 2.5 1.9 1.9 2.6 3.2 Source: Scotia Economics, as of May 21, 2014 PCL Ratios 25 Scotiabank (Total PCL as % of average loans & BAs) Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Canadian Banking Retail 0.18 0.17 0.17 0.19 0.22 Commercial 0.42 0.06 0.13 0.20 0.16 Total 0.21 0.16 0.17 0.19 0.21 International Banking Retail 2.15 2.06 1.93 2.08 2.11 Commercial 0.10 0.11 0.25 0.20 0.21 Total 0.87 0.84 0.87 0.87 0.91 Global Wealth & Insurance 0.10 0.05 0.01 Global Banking & Markets Corporate Banking 0.13 0.12 (0.02) 0.03 0.05 All Bank 0.35 0.31 0.31 0.34 0.36 Note: International Banking's total includes the impact of Colombian purchased portfolio. The Bank expects the PCL ratio to rise with the maturity of the acquired portfolio. See page 28 of the 2013 Annual Report. 26 Scotiabank 13#14Net Formations of Impaired Loans¹ ($ millions) 600 500 477 394 400 372 353 349 315 295 300 200 100 408 598 0 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 (1) Excludes Federal Deposit Insurance Corporation (FDIC) guaranteed loans related to the acquisition of R-G Premier Bank of Puerto Rico Gross Impaired Loans¹ ($ billions) 27 Scotiabank 4.0 1.05% 3.9 3.8 1.00% 3.7 3.6 0.95% 3.5 3.4 0.90% 3.3 3.2 0.85% 3.1 3.0 0.80% Q2/12 Q3/12 GILS Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 -GILS as % of Loans & BAS (1) Excludes Federal Deposit Insurance Corporation (FDIC) guaranteed loans related to the acquisition of R-G Premier Bank of Puerto Rico 28 Scotiabank 14#15Canadian Banking Retail: Loans and Provisions $188 (Spot Balances at Q2/14, $ billions) Total Portfolio = $247 billion; 94% secured $31 $24 $4 Mortgages % secured 100% Lines of Credit 62% Personal Loans 98% Credit Cards 7% PCL Q2/14 Q1/14 Q2/14 Q1/14 Q2/14 Q1/14 Q2/14 Q1/14 $ millions 3 3 41 41 49 45 34 29 % of avg. 1 1 55 53 87 80 355 304 loans (bps) (1) Includes Tangerine balances of $23 billion 29 International Retail Loans and Provisions (Spot Balances at $14.8 Q2/14, $ billions) $1.1 $3.0 Scotiabank Total Portfolio = $40.1 billion; 68% secured Credit Cards ($4.5B) ■Personal Loans ($11.5B) $7.6 $0.6 $6.9 $1.9 $10.7 $2.2 C&CA <<$0.2 ■Mortgages ($23.5B) $5.3 $4.9 $0.7 $1.9 $2.9 $5.1 $4.5 $1.5 $1.7 $1.5 Mexico Chile Peru Colombia¹ PCL Q2/14 Q1/14 Q2/14 Q1/14 Q2/14 Q1/14 Q2/14 Q1/14 Q2/14 Q1/14 $ millions 29 19 54 54 15 17 64 65 25 24 % of avg. 85 56 308 322 91 106 532 558 223 220 loans (bps)2 Note: Excludes non-material portfolios, except Total Portfolio (1) Purchased portfolio recorded at fair value, which includes a discount for expected credit losses. The bank expects to see increased provisions as the purchased portfolio in Colombia rolls over and reaches a steady state. (2) Q1/14 restated to reflect enhanced methodology. 30 Scotiabank 15#16International Banking Commercial Lending Portfolio Q2/14 = $67 billion (Average Balances) Asia 36% " Latin America 46% Portfolios in Latin America, Asia and Central America: Performing well Well secured Caribbean & Central America 18% " Continue to closely manage Caribbean portfolio " Strong pipeline growth Y/Y " Solid client growth in the mid-market segment 31 Scotiabank Q2 2014 Trading Results and One-Day Total VaR ($ millions) -1-Day Total VaR 25 20 15 10 5 0 -5 -10 -15 -20 -25 Average 1-Day Total VaR -30 Q2/14: $18.1MM Q1/14: $19.7MM Q2/13: $16.8MM -Actual P&L 32 Scotiabank 16#17Q2 2014 Trading Results (# days) 8 7 10 5 UT 4 3 2 1 0 -3 0 1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 18 ($ millions) Two trading loss days in Q2/14 33 Scotiabank 17