#1Scotiabank Investor Presentation October 31, 2000 1 Overview of 2000 Results Peter Godsoe Chairman & C.E.O. 2#22000 Performance Highlights 2000 ■ Record results - A A Net income: $1,926 million, +24% year over year - ROE 17.6% vs. 15.3% Top-line revenue growth: +13% Improved productivity: 56.5% vs. 59.3% Specific credit losses of $765 million vs. $485 million Higher capital and reserves Q4/00 ■ EPS 95 cents vs. 76 cents Q4/99 ■ ROE 17.0% vs. 15.3% Q4/99 3 $ millions 2000 11 Years of Earnings Growth 1500 Net 1000 Income 500 0 89 91 EPS = $3.67 93 95 97 99 00 94 & 97 exclude unusual items 4 3 2 1#3ROE Ahead of Performance Targets 2000 Target 17.6% VS. 16-18% EPS Growth 25% VS. 12-15% Productivity 56.5% VS. <60% Tier 1 8.6% VS. 7.5%+ 5 Performance Review Sabi Marwah Executive Vice-President & Chief Financial Officer CO 6#4$ millions Strong Top-Line Revenue Growth Q4/00 Q4/99 change 2000 1999 change 1,444 1,226 18% Net interest income (TEB) 5,393 4,835 12% 865 840 3% Other income 2,309 2,066 12% Total revenues 3,665 3,183 15% 9,058 8,018 13% Net interest margin 7 Higher Margins Increase due to: Improved spreads in Canada Securities income International Wider spreads in U.S. Other Increase Q4/00 vs. Q4/99 vs. Q3/00 2.32% 17 bps (5) bps 8 +4 - +3 +3 (5) + +7 I#5Broad-Based Growth in Other Income* Increase (Decrease) Increase (Decrease) vs. Q4/99 vs. 1999 $MM % $MM % 26 41% Retail Brokerage Fees 116 42% 5 17 Mutual Funds 16 14 10 6 Credit Fees 89 16 16 9 Investment Banking 50 7 24 8 Other 114 9 81 11% 385 14% (56) Gain on Investment Securities excludes gain on sale of stock transfer business and investment in Solidbank (Q3) 15 9 Relentless Focus on Expense Control Increase in expenses 2000 vs. 1999 8% less: - performance-related LO 5 - Chile Base expenses 2 1% 10#660 60 55 Continued Productivity Leadership expenses as % of revenues 97* 1997 excludes unusual items 56.5% 98 99 2000 11 Strong Capital Ratios % of risk-adjusted assets 14 12.2 11.9 12 10.6 10 8 7.2 8.1 8.6 កក 6.0 6.9 Total Tier 1 Common 7.3 6 4 2 0 1998 1999 2000 12#72 1.5 $ billions 1 0.7 0.5 Higher Reserves Substantial Unrealized Gains 1.6 Oct-98 Oct-99 13 2.2 Oct-00 Marketable Securities Surplus General Provision Business Line Earnings Summary $ millions Q4/00 Q4/99 change 2000 1999 change 256 167 53% Domestic 882 649 36% 89 83 7% International 364 296 23% 114 158 (28) % Scotia Capital 650 745 (13)% 38 (6) Other 30 (139)* 497 402 24% Total 1,926 1,551 24% * Primarily due to addition to general provision ($150 million pre-tax) 14#8Domestic* - Strong Earnings Growth Net income, $ millions 1000 500 36% ■ Continued business growth ➤ retail assets: +6% ➤ business deposits: +11% ➤ double-digit fee income growth ■ Excellent credit quality ■ Several major initiatives ➤ Sales Builder ➤ new products 0 1999 2000 15 * includes Wealth Management Record Wealth Management Revenues 1000 Revenues, $ millions 29% 750 500 250 0 1999 2000 ■ Excellent revenue growth ◉ ➤ Brokerage: +43% Investment Management: +16% Major new initiatives ➤ i:Partner ➤ Scotia Partners Portfolio ► Alliance with Capital Group A 16#9Rising International Earnings Net income, $ millions ■ Caribbean 400 23% 200 0 * 1999 excludes Solidbank 2000 ➤ good revenue growth - very high ROE ■ Latin America & Asia A ➤ earnings up 76%* 17 International Developments ■ Mexico ➤ Inverlat closed November 30 ■ Chile BSA ownership increased to 98% from 61% ■ Branch rationalizations: - Greece, Sri Lanka, Bangladesh 18#10Scotia Capital Net income, $ millions 1000 500 Strong revenue growth: ➤ credit fees: +21% ➤ record trading income: +20% Higher credit losses ■ Successful integration ■ Several innovative deals 0 1999 2000 19 Risk Review John Crean Senior Executive Vice-President Global Risk Management 20#11Risk Management Overview Domestic International Scotia Capital Market Risk Both retail & commercial in excellent shape. Caribbean in good condition. Asia: improving Latin America: acquisitions now stabilized Corporate portfolio well diversified Some softening in credit conditions Widening spreads in the market Very low trading risk 21 Well Diversified by Market % of total loans & acceptances Europe Caribbean U.S.A. Business Residential Mortgages Canada 22 Latin America Asia Personal#12Well Diversified by Business Segment % of total loans & acceptances Wholesale & Retail Media & Comm. Automotive Industrial Products Mining & Forestry Agriculture & Food Oil & Gas Other 23 Real Estate Transportation Financial Services Utilities Hotels Construction Gross Impaired Loans $ millions Q4/00 vs. Q3/00 2000 vs. 1999 (25) Domestic - Retail (62) (18) - Commercial (53) (43) (115) 6 International 187* (67) Scotia Capital - Canada (16) 195 - U.S.A./Europe 208 128 192 91 Total Change 264 * excludes BSA, Chile acquisition ($97MM) 24#13$ billions 2 1.40% 1.5 0.5 Negative Net Impaired Loans 0.67% 0.44% 0.26% % of loans & acceptances 2 1.5 1 0.5 0 0 (0.10)% (0.03)% -0.5 -0.5 1995 1996 1997 1998 1999 2000 25 U.S.A. Sector Review Telecoms ■ Negligible impaired loans (<$5MM) Health Care ■ Problems loans classified early Theatre operators ■ Modest exposure (US$ 250MM) ■ Primarily senior debt Dot.com sector ■Negligible exposure 26#14Telecom & Cable Exposure $ millions, October 31, 2000 Investment Non-Investment Sector Grade Grade Total Cable Operators 764 784 1,548 Regulated Telephone 718 718 Unregulated telephone/wireless 920 1,103 2,023 Other communications 199 199 Total 2,402 2,086 4,488 Telecom & cable high yield trading portfolio 28 Net Impaired Loans <5 27 Low Trading Risk # days net trading revenue, fiscal year 2000 50 10-day VaR: $23 million 40 30 20 20 10 Low variability in trading revenues 5th percentile 95th percentile ☐ -12-10-8 -6 -4 -20 2 4 6 8 10 Daily Trading Profit & Loss ($ millions) 28#15Focus on 2001 Peter Godsoe Chairman & C.E.O. 29 29 2001: Build on Strengths ■ Achieve targets: ➤ earnings growth 12-15% ➤ ROE 16-18% Higher contribution from all businesses ■Maintain productivity leadership (target <60%) ■ Continued strong capital & reserves 30#16This 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. 31