Scotiabank Risk and Credit Portfolio Overview

Scotiabank ($ millions) Trend in Net Impaired Loan Formations Domestic Retail by Business Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Commercial 628 76 77 20 29 96 106 818 81 78 (20) 87 58 74-18 77 International Retail 52 70 74 87 94 Commercial (31) (43) (9) 41 (1) 21 27 65 128 93 Scotia Capital (98) 36 (75) (121) (24) 19 169 77 65 147 Scotiabank 43 Market Risk - Trading Controls ◉ ☐ Board-approved policies and limits - Active, independent oversight – risk management staff physically located on trade floors Independent validation of models and market data used for valuation ■ Valuation reserves for risk concentrations, market ☐ illiquidity Daily P&L analysis Regular stress-testing of portfolios 44

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