#1Scotiabank Investor Presentation June 1, 2000 1 Performance Review Sabi Marwah Executive Vice-President & Chief Financial Officer 2 1#2• • Performance Highlights Positive earnings momentum EPS up 21% year-over-year ROE 17.7% vs. 15.7% ➤ Productivity 58.0% vs. 61.0% Good core results across business lines Strong revenue growth - up 18% • Further improvement in capital ratios 3 Consistent Earnings Growth Net Income, $ millions 73¢ 400 300 200 100 EPS, 88¢ 75 5 50 25 0 Q2/99 Q4/99 Q2/00 4 2#3Strong Growth in Revenues $ millions increase Q2/00 Q2/99 $ % Net interest income (TEB) 1,310 1,198 112 9% Other income Total revenues 988 750 238 32% 2,298 1,948 350 18%* 16% excluding Banco Sud Americano, Chile 5 Higher Margins Q2/00 Q2/99 Increase Net interest margin 2.25% 2.13% 12 bps Increase in margin due to: Chile Higher spreads in International Other +3 +2 +7 6 3#4Significant Growth in Other Income Increase Q2/00 vs. Q2/99 $MM % Wealth management-related 59 37 Investment banking 49 29 Credit fees 13 10 Securities gains 110 100+ Other 7 3 238 32% 7 Base expenses down slightly Increase in expenses* Less: performance-related -write-down of assets ($46MM) Decrease in base expenses * excludes Chile 8 Q2/00 vs. Q2/99 10% 7 4 (1)% 4#5Continued Productivity Leadership expenses as a % of revenues* 60 60 50 Q1/99 Q2/99 58.0% Q3/99 Q4/99 Q1/00 Q2/00 * Q1/99 excludes special gain of $77MM 9 Stronger Capital Ratios % of risk-adjusted assets 10 11.2 12.0 Total 8.4 Tier 1 7.8 5 6.7 7.0 Common Equity O Q2/99 10 Q2/00 LO 5#62.0 Higher General Provision & Securities Surplus $ billions 1.5 $1.4 1.0 0.5 0.0 Q2/99 $2.0 Q2/00 11 Business Line Results 12 Securities Surplus General Provision 6#7250 200 150 100 Domestic strong earnings growth Net income, $ millions 50 60 30% 0 Q2/99 Q2/00 • Continued growth in retail • • . mortgages +9% personal loans +6% personal deposits: +7% Strong growth in wealth management revenues Lower credit losses Improved productivity 13 Streamlining Canadian operations 1,210 -57 branches 1,153 Q2/99 Staff reduction -1,100 14 Q2/00 7#8Domestic initiatives Canada Post alliance ➤ provide banking services in rural communities • Customer-focused financial package products . A - ScotiaLine VISA, Scotia Total Equity Plan E-Commerce and E-banking initiatives A - Scotia Web Store, voice recognition 15 Strong International results Net Income, $ millions 100 19% Asia & 75 60 50 25 Q2/99 Latin America Q2/00 • Latin America: • . Caribbean 16 A higher contribution this quarter Caribbean: continues to provide strong contribution Asia: A sold 40% interest in Solidbank to Metrobank for $140 million - invested US$84 million for 8% in LTCB - Japan 8#9Latin America - a foundation for growth 17 Chile: Assets: $4 billion Staff: 1,750 Branches: 78 ABMS: 120 Consolidated in Q2/00 results • Mexico: - letter of intent signed to increase ownership in Inverlat to 55% ➤ total investment = US$220 million purchase agreement to close end of July 200 150 Scotia Capital Net income, $ millions • 100 50 50 0 Q2/99 Q2/00 30% growth in fee income offset by higher credit losses Initiatives: US Debt Fund • Securitization in Europe Leveraging global reach ➤ cash management, IBOS ➤ Mexican-based auto parts industry 18 9#10Scotia Capital: Solid Revenue Growth Revenues, $ millions Q2/00 Q2/99 Net Interest Income* 306 292 % Change 5% Other Income: Credit Fees 2 Trading Underwriting/Other 885 Total Revenues 92 77 20 95 75 27 58 47 272 210 30% 578 502 15% 20 * includes loan origination fees 19 Risk Review John Crean Senior Executive Vice-President 20 20 10#11• Risk Management: Overview Whole Year 2000 provision estimate increased by $125 million to $665 million (39 basis points): ➤ $25 million: Chile $100 million: mainly Scotia Capital • Net impaired loans remain negative: ($131 million) 2 21 Gross Impaired Loans $ millions Q2/00 vs. Q1/00 Canada - Retail (9) - Commercial (16) International 26 Scotia Capital 78 Change 79 22 11#12Negative Net Impaired Loans $ billions 2 1.4% 1.5 1 0.5 0.7% 0.4% 0.3% % of loans & acceptances 2 (0.1)% -0.5 (0.1)% -1 1995 1996 1997 1998 1999 Q2/00 Ahead of Performance Targets ROE Q2/00 Target 17.7% VS. 16-18% EPS Growth 21% VS. 12-15% Productivity 58.0% VS. <60% Tier 1 8.4% VS. 7.5%+ 24 12#13This 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. 25 13