#1Scotiabank Scotiabank Investor Presentation October 31, 2002 1 Overview of 2002 Results Peter Godsoe Chairman & C.E.O. 2#2Scotiabank 2002-performance highlights Q4/02 ☐ Diluted EPS: $1.09 - up 4% vs. Q4/01 ROE: 16.5% vs. 17.0% in Q4/01 Deconsolidated Quilmes (Argentina): nil net income impact Provision for credit losses: $429mm vs. $350mm in Q4/01 2002 ☐ Scotiabank Reported Ex. Argentina Net income $1,797mm $2,337mm ➤ EPS $3.30 $4.35 ➤ ROE 13.0% 16.6% Excellent capital ratios ➤ Tier 1: 9.9%; TCE: 8.3% 3 Consistent earnings growth Net income, $ millions 676 305 291 2,337 540 92 93 94* 95 96 97* 98 99 00 01 02* * 1994/1997 include unusual charges/credits; 2002 includes charges related to Argentina 4#3Scotiabank Domestic & International – solid results, - challenges in Scotia Capital: U.S. Net income, $ millions 19% 1200 1,142 960 1000 800 600 400 200 0 2001 2002 36% 45% 686 665 489 380 540* 125 Domestic International * charges related to Argentina 5 Scotiabank ROE Scotia Capital Met or exceeded performance targets Q4/02 2002 Target 16.5% 16.6%* VS. 15-17% EPS Growth 3.8% 7.4%* VS. 7-12% Productivity 57.4% 54.9% VS. <58% Tier 1 9.9% 9.9% VS. 8%+ excluding Q1/02 charges relating to Argentina 6#49 Scotiabank Consistent record of dividend growth - another increase this quarter Annual dividend, cents/share 160 140 120 100 80 60 60 40 40 20 20 38¢ 2002 increase: +17% $1.60* 1992 1994 1996 1998 2000 2002 1988 1990 * based on current rate Scotiabank 7 Performance Review Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 8#5Scotiabank Large items in Q4/02 Gain on sale of merchant acquirer business Investment tax credits - expenses: $66mm - other income: $4mm Pre-tax After-tax EPS ($) ($mm) ($mm) Impact 99 80 0.16 70 70 40 0.08 Additional provisions - U.S. corporate (125) (77) (0.15) 9 Scotiabank Argentina: nil net income impact in Q4/02 $ millions Provision for credit losses Other income Q4/02 Q1/02 2002 46 (500) (454) - Forex translation 4 4 - · Loss on investment securities (20) (20) - Other (87) (87) Non-interest expenses Loss on disposal of subsidiary (237) (237) operations Net income before taxes (187) (607) (794) Income tax recovery Net income 187 67 254 (540) (540) 10#69 Scotiabank Q1/02 Taxes Q4/02 NIBT Taxes Rate ($mm) ($mm) NIBT Taxes ($mm) ($mm) Rate 241 146 61% Reported 662 7 1% Argentina charges 607 67 (see slide #10) 187 187 Gain on sale of merchant acquirer business (99) (19) 848 213 25% Underlying 750 175 23% Scotiabank 11 Revenues maintained in a difficult year $ millions (TEB) 2,738 2,728 2,598 2,665 2,770 2,729 2,721 2,437 Q1/01 Q2/01 Q3/01 Q4/01 12 Q1/02 Q2/02 Q3/02 Q4/02#79 Scotiabank Margins down slightly Change Change Q4/02 vs. Q3/02 2002 vs. 2001 2.28% (5) bps Net interest margin 2.34% (3) bps (1) (5) 15 Due to: Canadian $ spreads (2) Foreign currency margins 2 1 Other (3) 13 Scotiabank $ millions Higher underlying other income Q4/02 Q4/01 change 1,019 989 3.0% Reported 2002 2001 change 3,942 4,071 (3.2)% Less: (16) 28 - Security gains 179 217 99 65 - Gains on sale of businesses 99 92 4 53 - Quilmes/Argentina charges (33) 190 77 84 - Inverlat 309 225 855 759 12.6% Underlying 3,388 3,347 1.2% 14#8Scotiabank Tight control of expenses Q4/02 vs. Q4/01 2002 vs. 2001 $MM % $MM % 72 4.8% Change in expenses 312 5.5% Less: n/a n/a Inverlat (full-year impact) 293 5.2 237 15.9 (70) (4.7) Loss on disposal of Quilmes Lower Quilmes expenses 237 4.2 (158) (2.8) (57) (3.8) Performance-based compensation (12) (0.2) (66) (4.4) Expense recoveries/tax settlement (66) (1.2) 28 1.8% Change in base expenses 18 0.3% 15 Scotiabank 60 60 55 59 Continued productivity leadership expenses as % of revenues 54.9% 50 50 97 98 99 00 01 02 16#9Scotiabank Excellent capital ratios % of risk-adjusted assets 14 12.2 12 13.0 12.7 Total 10 9.9 9.3 Tier 1 8 8.6 60 4 7.0 7.8 8.3 2 0 2000 2001 2002 Scotiabank 17 Tangible Common Equity Business Line Results 18#10Scotiabank Strength in diversification % of net income, excluding Other 2001 2002 International Scotia Capital International Scotia Capital| 30%* 18% 23% 32% 45% Domestic 19 52% Domestic excluding charges related to Argentina 5 Domestic - steady upward performance Scotiabank Net income, $ millions 347 ■ 292 80* 262 52* ◉ Reported net income up 19% year- over-year ➤ +11% excluding gains Strong retail asset growth ➤ retail residential mortgages up 9% ➤ revolving credit up 20% ➤ higher market share Industry-leading retail credit quality ➤ annual provision 20 bps #1 in customer service Q4/01 Q3/02 Q4/02 • after-tax gains on sale of merchant acquirer business in Q4/02 and corporate trust in Q4/01 20#11Scotiabank Continued superior customer service Customer Satisfaction - % Excellent vs. Peer Group 22.8% #1 31.3% Scotiabank 1 Peer Group 24.0% I 19.8% T 1998 1999 2000 2001 2002 Market Facts CSI (2002) 21 Scotiabank Net income, $ millions 176 56 58 Scotia Capital Two well-performing business units ➤ Global Trading ➤ Canadian Capital Structuring Revenues maintained year-over-year ➤ net interest income down 18% ➤ other income up 32% Challenges in U.S. lending ➤ provisions up significantly from Q4/01 Expenses well controlled ➤ down 6% year-over-year Q4/01 Q3/02 Q4/02 22#12Scotiabank Strong performance in Global Trading Revenue, $ millions $541 $925 $813 Revenues: +14% in 2002 ➤ seven years of continued growth Strong performance in derivatives ➤ +33% year-over-year #1 Canadian Dollar Bank by Asia EuroMoney 2000 2001 2002 23 Scotiabank Scotia Capital: U.S. repositioning Exit relationships that fall below threshold ROEE Disciplined proactive approach to lending reduce single name exposures ➤ reduce industry limits ➤ reduce overall level of capital ■ Increase business/deepen relationships with clients that offer an acceptable ROEE ➤ grow non-credit revenues 24#139 Scotiabank Net income, $ millions International 146 53* 212 ■ 128 " Caribbean ➤ net income: +7% vs. Q4/01 Latin America ➤ solid contribution from Inverlat ➤lower PDI revenues vs. Q3 Asia ➤ higher credit losses vs. Q3 Q4/01 Q3/02 Q4/02 after-tax charges related to Argentina Scotiabank 25 Caribbean - another record year Net income, $ millions 221 252 290 00 00 01 02 20 Excellent earnings growth ➤ +15% year-over-year Strong asset & deposit growth ➤ assets: +11% ➤ deposits: +7% Higher revenue: +7% ➤ 15% increase in transaction revenues Good credit quality ➤ credit losses down 14% 26#14Scotiabank Scotiabank Inverlat - solid progress Growing retail business ➤ 30% automobile and mortgage loans in 2002 ■ Very good penetration of commercial & corporate market ➤ loans up 16% year-over-year Increased market share ➤ loans: +70 bps to 5.9% ➤ deposits: +150 bps to 6.1% Record use of alternative delivery channels in 2002 ➤ 2.7 million visits to Inverweb and 6.5 million calls W VOLKSWAGEN TELMEX 27 Scotiabank $ millions MAGNA U.S. GAAP reconciliation 2002 2002 Net income Common equity Canadian GAAP 1,797 Canadian GAAP 13,502 - FAS 133 - Available-for-sale securities (223) (164) - retained earnings adj. (390) - accumulated OCI* 428 - Quilmes goodwill (76) - other (60) U.S. GAAP 1,274 U.S. GAAP 13,540 other comprehensive income 28#15Scotiabank Scotiabank Risk Review John Crean Senior Executive Vice-President Global Risk Management 29 29 Risk overview ■ Net impaired loans: $620mm ➤ down $399mm from Q3/02 • Argentina: ($243mm) • • Other: ($156mm) ■ Continued credit challenges in U.S. ➤ particularly power sector ■ Maintained high provisioning level in Q4/02 ➤ $475mm (ex. Argentina) vs. $400mm in Q3/02 30#169 Scotiabank $ millions Decrease in net impaired loans General U.S. Other Argentina Provision Total Q3/02 1,271 955 268 (1,475) 1,019 Net formations 311 72 (75) 308 Deconsolidation of Quilmes (223) (223) Provisions (326) (149) 46 (429) Other (31) (33) 9 (55) Q4/02 1,225 845 25 (1,475) 620 Decrease (46) (110) (243) - (399) 31 Aggressive provisioning Scotiabank Specific provisions, $ millions Q4/02 2002 2001 71 Domestic 282 283 46 International 69 200 Scotia Capital: 326 - U.S. 1,131 671 40 - Other 116 83 (8) Other (23) (37) 475 Sub-total 1,575 1,200 (46) Argentina 454 50 429 Total 2,029 1,250 32#17Scotiabank Cable & telecom exposure Loans & acceptances, $ millions Sector Investment Grade Non-Investment Grade Total Q4/02 Q3/02 Q4/02 Q3/02 Q4/02 Q3/02 Cable operators 223 180 1,666 1,523 1,889 1,703 Regulated telephone 1,112 1,193 249 211 1,361 1,404 Unregulated telephone 69 42 374 387 443 429 Wireless 167 177 782 715 949 892 Long-haul fibre cable 87 108 87 108 CLECS 93 158 93 158 Total 1,571 1,592 3,251 3,102 4,822 4,694 Scotiabank Gross Impaired Loans: $690mm, Net $529 mm 33 Cable & telecom - coverage on higher-risk sectors Gross Loans Oct. 31, 2002 & BAs Gross Impaired Write-offs, Net Reserve Provisions Impaired Coverage Sector (before write-offs) $MM $MM (before write-offs) % $MM $MM % Unregulated 537 195 36% 135 60 69% telephone Wireless 949 107 11% 17 90 16% Long-haul 276 262 95% 210 fibre cable 42 52 80% CLECs 231 172 74% 170 2 99% Sub-total 1,993 736 37% 532 204 72% Cable 1,920 404 21% 79 325 20% operators Total 3,913 1,140 29% 611 529 54% 34#18Scotiabank Power & energy trading exposure Loans & acceptances, $ millions Sector Investment Grade Non-Investment Grade Total Q4/02 Q3/02 Q4/02 Q3/02 Q4/02 Q3/02 Regulated Utilities Diversified Generation 1,213 757 630 330 1,843 1,087 206 789 696 789 902 Independent Power Projects with PPAs 558 343 475 376 1,033 719 Other Power Projects 202 320 1,005 878 1,207 1,198 Total 1,973 1,626 2,899 2,280 4,872 3,906 Gross Impaired Loans: $348mm, Net $186 mm 35 9 Power & energy trading - coverage Scotiabank Oct. 31, 2002 Gross Loans Sector $MM $MM Gross Write-offs, Net Reserve & BAs Impaired Provisions Impaired Coverage (before w/o) (before w/o) % $MM $MM % Regulated Utilities 1,843 3 1 2 33% Diversified Generation 883 306 35% 182 124 59% Independent Power 1,057 Projects with PPAs S 53 5% 44 9 83% Other Power Projects 1,207 104 9% 53 53 51 51% TOTAL 4,990 466 9% 280 186 60% 36#19Scotiabank #days Low variability of trading revenue... Trading revenue, 2002 50 45 40 35 30 25 20 15 10 10 LO 5 0 (8) (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 $ millions 37 Scotiabank ...reflecting moderate market risk $ millions, November 1, 2001 to October 31, 2002 20 20 10 0 -10 -20 38 Actual P&L VaR 1 day#20Scotiabank Risk summary Credit quality ➤ Domestic retail - excellent ➤ Domestic commercial - stable ➤ International - stable ➤ U.S. - continuing challenges ■ Steady provisioning at high levels Continued focus on U.S. credit quality in 2003 Scotiabank 39 Outlook Peter Godsoe Chairman & C.E.O. 40 40#21Scotiabank Expect increased earnings in 2003 ◉ Economic outlook some positive signs - but still managing cautiously Closely manage credit portfolios ➤ continued focus on U.S. 2003 targets ➤ EPS growth: 5-10% (excluding 2002 Argentina charges) ➤ ROE: 15-18% ➤ productivity ratio - below 58% ➤ maintain strong capital ratios and credit ratings Scotiabank 41 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. 42