#1Scotiabank Scotiabank Investor Presentation April 30, 2002 1 Performance Review Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 2#2Scotiabank Performance highlights ■ Net income of $598 million, up 11% from Q2/01 ■ EPS: $1.11 up 10% ROE: 18.3% vs. 17.9% Specific provisions: $350 million unchanged from Q1/02 Productivity ratio: 54.3% Strong capital and reserves A Tier 1: 9.9% Scotiabank 3 Argentina update ■ Minimal impact on Q2/02 earnings ■ Well provisioned against Argentine risks ➤ 90% on cross-border (ex. Brady Bonds, tax-effected) ■ Continue to monitor situation closely 4#3Scotiabank Steady earnings growth ex. Argentina Net Income, $ millions 592 598 539 554 566 510 Q1/01 Q2/01 Q3/01 * charges for Argentina ($540MM) Scotiabank 5 * 52 Q4/01 Q1/02 Q2/02 ...from broad diversification of businesses Net income, $ millions 254 223 192 Q2/01 Q2/02 149 150 120 Domestic Scotia Capital International 6#4Scotiabank Scotiabank $ billions 3 Performance ahead of targets ROE Q2/02 Target 18.3% VS. 15-17% EPS Growth 10% VS. 7-12% Productivity 54.3% VS. <58% Tier 1 9.9% VS. 8%+ 7 Good top-line revenue growth 7% Other income 0 Q2/01 Q2/02 8 Net interest income#5Scotiabank Changes in margin Versus Q2/02 Q2/01 Q1/02 Net interest margin 2.34% (7)bp Scotiabank $ millions A Decline from Q1/02 due to lower foreign currency spreads mainly in Latin America 9 Changes in other income Q2/02 Q1/02 change 1,058 869 22% Reported Q2/02 Q2/01 change 1,058 1,014 4% 16 Tax settlement 16 14 45 Quilmes (devaluation) 14 46 (107) Argentine charges 1,028 931 10% Underlying 1,028 968 6% 10#6Scotiabank Tight control of base expenses Q2/02 vs. Q1/02 Q2/02 vs. Q2/01 $MM % $MM % (7) (1)% Change in expenses 111 8% 16 1% Performance-based compensation 95 7% (37) (3)% Quilmes (devaluation) (37) (3)% 14 1% Change in base expenses 53 4% 11 Scotiabank 62 Continued productivity leadership expenses as % of revenues 58 54 54.3% 50 00 97 98 99 00 01 Q1/02 Q2/02 12#7Scotiabank Capital ratios - the best in industry % of risk-adjusted assets 14 13.4 12.7 12.5 12 Total 10 9.9 9.2 Tier 1 8 9.0 6 4 Tangible Common 7.4 7.7 8.0 Equity 2 0 Q2/01 Q1/02 Q2/02 13 Scotiabank $ billions 2.0 Highest reserves 2.1 Marketable Securities 0.5 0.6 1.5 1.5 General Provision Q4/01 14 Q2/02#8$ Scotiabank Business Line Results 15 Scotiabank Domestic another solid quarter Net income, $ millions $279 - $223 Q2/01 Q1/02 $254 Q2/02 Continued retail asset growth up $5 billion mortgages up 9% Scotialine VISA up 70% ■ Retail credit quality ☐ ➤ best of class Expenses tightly controlled up less than 2% yr/yr ■ Net income decline from Q1 due to shorter quarter, seasonal factors 16#9Scotiabank Leader in customer satisfaction Customer Satisfaction - % Excellent vs. Peer Group 22.8% 19.8% 27.1% Scotiabank Scotia Advantage Peer Group 1999 2000 2001 1998 Market Facts CSI (2001) 17 #1 22.7% Scotiabank Scotia Capital - choppy credit conditions Net income, $ millions $192 $146 $120 ■ Revenues up 7% yr/yr ■ Credit Quality A large provision for one telecom account provisions stable qtr/qtr ➤ uneven U.S. credit conditions Expenses A growth mostly performance based compensation Q2/01 Q1/02 Q2/02 18#10Scotiabank Scotia Capital - stable revenues Revenue, $ millions 800 700 600 500 400 300 200 100 0 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 19 Investment Bkg/Trading Corporate Banking International - good earnings ex-Argentina Scotiabank Net income, $ millions * $149 $175* $150 ■ Caribbean A another strong quarter ■ Latin America ➤ Inverlat: earnings momentum - lower Brady bond revenues ■ Asia A stable Q2/01 Q1/02 Q2/02 net loss of $(365) million after charges for Argentina 20#11Scotiabank Steady contribution from Caribbean Net Income, $ millions $67 $77 $72 Q2/01 Q1/02 Q2/02 21 ■ Strong earnings growth A - up 15% yr/yr ■ Asset growth A -up 14% yr/yr ■ Credit quality ■ A -stable Expansion of network ■ Investment in technology Scotiabank Mexico - upward momentum BNS share of Inverlat earnings, $ millions $17 ☐ $25 Earnings momentum $23 ➤ up 47% yr/yr Q2/01 Q1/02 Q2/02 Strong lending & deposit growth retail lending +25% - comm./corporate loans +20% A deposits +50% ■ Inverlat Capital Markets merged corporate & investment 22#12$ Scotiabank Scotiabank Risk Review John Crean Senior Executive Vice-President Global Risk Management 23 Risk Overview ■ Credit quality - choppy conditions but overall portfolio stable A net impaired loans down slightly before Argentina ➤ specific provisions unchanged at $350 million vs. Q1 ◉ Argentine net impaired loans down ➤ down $143 million due to further Peso devaluation 24#13Scotiabank Gross impaired loan formations in Q2/02 $ millions Scotia Capital Domestic International Total mainly from one large telecommunications account 25 198* 89 72 359 Scotiabank Downward trend in net impaired loans (ex. Argentina) Net impaired loans, $ millions 696 395 259 670 515 475* 332* 195 183 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 * * Argentine net impaired loans 26#14Scotiabank Specific provisions unchanged vs. Q1 $ millions Q2/02 Q1/02 Q2/01 Scotia Capital 269 260 153 Domestic 67 65 54 International 14 25 43 350 350 250 Argentina - 500 - 350 850 250 Scotiabank Sector* 27 Cable & Telecom exposure Loans & acceptances, $ millions, April 30, 2002 Investment Non-Investment Total Grade Grade Cable operators 428 1,315 1,743 Regulated telephone 1,035 71 1,106 Unregulated telephone/wireless 362 1,122 1,484 Long-haul fibre cable 129 129 CLECS 198 198 Total 1,825 2,835 4,660 Impaired loans: gross $287; net $87 * no Paging exposure 28#15Scotiabank Argentina - well reserved cross-border exposure, $ millions Q2/02 Q1/02 Brady Bonds 117 140 Trade/Interbank 114 125 Corporate/Other 462 487 Scotiabank Quilmes (carrying value) 92 308 Gross Exposure 785 1,060 Provisions (466) (707) Net exposure 319 353 29 Scotiabank # days Low variability of trading revenue... Net trading revenue, second quarter 2002 12 10 00 8 95th percentile 6 5th percentile 4 2 0 (4) (3) (2) (1) 01 2 3 4 5 6 7 8 9 10 11 $ millions 30#16Scotiabank ...reflecting moderate market risk $ millions, February 1, 2002 to April 30, 2002 20 10 Actual P&L VaR 1 day ww -10 -20 31 Scotiabank Risk management summary ☐ Domestic retail and commercial, International portfolios in good shape ■ Scotia Capital - managing closely Expect provisions to decline in second half of 2002 32#17Scotiabank $ Scotiabank Outlook Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 33 33 Outlook ■ Economic outlook slightly more favourable ◉ Managing credit portfolios closely Expect to meet performance targets (ex. Argentina) EPS: 7-12% ROE: 15-17% 34#18Scotiabank 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 in Canada and globally, regulatory developments in Canada and elsewhere, technological developments and competition. A substantial amount of the Bank's business involves making loans or otherwise committing its resources to specific large companies, industries or in specific countries or areas of the world. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results. 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 therefore cautioned not to place undue reliance on such statements. The information contained in this report should be read in conjunction with the more comprehensive information filed by the Bank with the Ontario Securities Commission and with the Securities and Exchange Commission. 35