#1Scotiabank Scotiabank Investor Presentation Third Quarter 2002 1 Third Quarter Performance Review Peter Godsoe Chairman & C.E.O. 2#29 Scotiabank Performance highlights ■ " Solid earnings ➤ Net income of $564 million, up 2% from Q3/01 ➤ EPS: $1.05 vs. $1.04 ➤ ROE: 16.2% vs. 17.3% Continued difficult U.S. credit environment ➤ Net impaired loans: up $504 million from Q2/02 ➤ Specific provisions: $400 million; up $50 million from Q2/02 Strong domestic and international earnings ■ Excellent capital ratios ➤ Tier 1: 9.8% 3 Scotiabank Solid earnings despite challenging Net Income, $ millions credit environment 592 598 539 554 566 564 510 Q1/01 52 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 * charges for Argentina ($540MM) 4#3Scotiabank Strong Domestic and International offset by weakness in U.S. lending Net income, $ millions 212 262 132 Q3/01 Q3/02 212 198 11 Domestic 56 International Scotia Capital Scotiabank 5 Argentina update ■ No impact on Q3/02 earnings ▪ In final stages of transaction to exit Quilmes – minimal financial impact 6#4Scotiabank ROE Still on track to meet 2002 targets Q3/02 2002 YTD Target 16.2% 16.8%* VS. 15-17% EPS Growth 1% 9%* VS. 7-12% Productivity 51.1% 54.0% VS. <58% Tier 1 9.8% 9.8% VS. 8%+ * excluding Q1/02 charges relating to Argentina Scotiabank 7 Performance Review Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 8#5Scotiabank Steady trend in top-line revenue $ millions (TEB) 2,738 2,728 2,772* 2,770 2,729 2,598 2,437 Q1/01 Q2/01 Q3/01 Q4/01 * excluding Argentina charge of $107 million Scotiabank Net interest margin 9 Q1/02 Q2/02 Q3/02 Margin holding up Lower Latin America spreads Canadian $ spreads Other 10 Decrease Q3/02 vs. Q2/02 vs. Q3/01 2.33% (1) bps (10) bps (4) (11) 1 (2) 2 3 (1) bps (10) bps#6Scotiabank $ millions Relatively stable other income Q3/02 Q2/02 change Q3/02 Q3/01 change 996 1,058 (6)% Reported 996 1,054 (6)% 105 102 Security gains 105 7 95 114 Trading revenue 95 135 16 Tax settlement 82 3 14 Quilmes 3 57 793 812 (2)% Underlying 793 773 3% Scotiabank $ millions 11 Continuing focus on expense control Q3/02 vs. Q2/02 Q3/02 vs. Q3/01 (110) (7)% Change in expenses (123) (8)% (25) (2)% Performance-based compensation (6) (1)% (52) (3)% Stock-based compensation (61) (4)% (11) (1)% Quilmes (devaluation) (49) (3)% (22) (1)% Change in base expenses (7) 0% 12#7Scotiabank 62 62 Productivity improvement expenses as % of revenues 58 54 5.4 50 50 Scotiabank 40 97 98 99 9 51.1% g 00 01 Q1/02 Q2/02 Q3/02 13 Capital ratios – best in the industry % of risk-weighted assets - 9.1 9.9 9.8 Tier 1 8.0 000 7.6 8.0 Tangible Common Equity Q3/01 Q2/02 14 Q3/02#8Scotiabank $ billions General Provision Lower reserves Q3/02 Q2/02 1.5 1.5 Security Surplus (Deficit) - Emerging Market Debt 0.1 0.5 - Equity (0.2) 0.1 - Fixed Income (0.1) 0.6 Total 1.4 2.1 Scotiabank 15 Business Line Results 16#9Scotiabank Domestic - another strong quarter Net income, $ millions $212 $262 $254 Q3/01 Q2/02 Q3/02 Scotiabank ■ Net income: +24% yr/yr ■ Good asset growth ➤ mortgages up 11% ➤ revolving credit up 20% Strong retail credit quality Expenses tightly controlled ➤ up 3% yr/yr 17 Domestic - business highlights ■ Increased market share year-over-year ➤ mortgages +28 bps ➤ personal loans +29 bps ➤ mutual funds +24 bps Approved 60% more financing for small business vs. Q3/01 ■ Successful integration of Charles Schwab Canada into Scotia McLeod Direct Investing (SMDI) 18#10Scotiabank Scotia Capital - difficult credit conditions Net income, $ millions $198 $120 ■ Revenues down 8% yr/yr lower trading revenue ■ Increased provisions $56 ◉ ➤ mainly telecom ■ Expenses tightly controlled ➤ down 9% yr/yr Q3/01 Q2/02 Q3/02 19 Scotiabank International - good earnings Net income, $ millions $212 $150 $132 Q3/01 Q2/02 Q3/02 20 Caribbean ➤ another strong quarter Latin America ➤ Inverlat: continued good earnings higher Brady bond. revenues Asia ➤ lower loan loss provisions#119 Scotiabank Mexico - good momentum BNS share of Inverlat earnings, $ millions $25 $25 $21 Q3/01 Q2/02 Scotiabank Q3/02 Earnings momentum ➤ up 19% yr/yr Strong lending & deposit growth ➤ retail lending +25% ➤ commercial/corporate loans +18% ➤ personal chequing deposits +30% 21 Risk Review John Crean Senior Executive Vice-President Global Risk Management 222 22#12Scotiabank Risk overview ■ Credit condition in the U.S. more difficult than expected ■ Net impaired loans up $568 million (ex. Argentina) mainly telecom Specific provisions of $400 million ➤ increase of $50 million vs. Q2/02 Scotiabank 23 Net formations - mainly telecom Scotia Capital net formations: $835 million U.S. Telecom 70% 24 Other Net Formations 20% Other Telecom 10%#13Scotiabank High levels of provisioning - mainly in Scotia Capital U.S. Specific Provisions, $ millions 350 350* 350 Q4/01 Q1/02 *excluding Argentina Scotiabank 400 Q2/02 Q3/02 25 Cable & telecom exposure Loans & acceptances, $ millions, July 31, 2002 Other Scotia Capital Sector* Investment Non-Investment Total Grade Grade Cable operators 180 1,523 1,703 Regulated telephone 1,193 211 1,404 Unregulated telephone 42 387 429 Wireless 177 715 892 Long-haul fibre cable 108 108 CLECS 158 158 Total 1,592 3,102 4,694 Impaired loans: gross $756; net $563 * no Paging exposure 26#14Scotiabank Telecom - good coverage on higher-risk sectors Gross Loans & BAs Gross Impaired Write-offs, Provisions Net Reserve Impaired Coverage (before write-offs) (before write-offs) $MM $MM % $MM $MM % Unregulated 540 181 33% 111 70 61% telephone Wireless 909 21 2% 17 17 4 81% Long-haul 320 266 83% 212 fibre cable 54 54 80% CLECs 310 208 67% 152 56 73% Total 2,079 676 32% 492 184 73% Scotiabank 22 27 Power & energy trading exposure Loans & acceptances, $ millions, July 31, 2002 Sector Investment Non-Investment Grade Grade Total Regulated Utilities 757 330 1,087 Independent Power Projects with PPAs* 343 376 719 Other Power Projects 320 878 1,198 Diversified Generation 206 696 902 Total 1,626 2,280 3,906 Impaired loans: gross $118; net $85 * Power Purchase Agreements 28#15Brazil exposure – limited to government - bonds and trade finance cross-border exposure, US$ millions Scotiabank Q3/02 Q2/02 Government Bonds 323 323 Trade Finance 410 415 Corporate loans 29 34 Total 762 772 29 Scotiabank # days Low variability of trading revenue... Net trading revenue, third quarter 2002 16 114 12 10 10 8 5th percentile 95th percentile 6 < 2 0 (8) (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 $ millions 4 5 6 7 8 9 30#16Scotiabank ...reflecting moderate market risk $ millions, May 1, 2002 to July 31, 2002 20 Actual P&L 10 0 -10 -20 31 VaR 1 day Scotiabank Risk management summary Credit quality ➤ strong credit quality in Domestic Retail stable portfolios: Domestic Commercial and International (ex. Argentina) ■ Managing Scotia Capital U.S. closely ■ U.S credit conditions to remain challenging in the fourth quarter 32#17Scotiabank Scotiabank Outlook Peter Godsoe Chairman & C.E.O. 33 33 Outlook ■ Business outlook somewhat uncertain ☐ ➤ economic momentum in most markets remains positive Managing credit portfolios remains the priority Expect to meet performance targets (ex. Argentina) ➤ EPS: 7-12% ➤ ROE: 15-17% 34#18Scotiabank This document 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 document should be read in conjunction with the more comprehensive information filed by the Bank with the Ontario Securities Commission and with the U.S. Securities and Exchange Commission. The Bank does not undertake to update any forward- looking statement, whether written or oral, that may be made from time to time by or on behalf of the Bank. 35