Q3/06 Earnings Report

Scotiabank Higher expenses - Investing for future expenses, $ millions 1,517 1,565 1,608 355 339 355 298 313 288 874 928 940 Q3/05 Q2/06 Q3/06 ☐ Other expenses Premises & technology Salaries & employee benefits growth Expenses up 6% or $91 mm yr/yr ▪ Higher salaries & benefits, due mainly to acquisitions: $66 mm ▪ Higher premises and technology: $25 mm Other expenses up slightly as impact of acquisitions mostly offset by $51 mm VAT recovery Expenses up 3% or $43 mm qtr/qtr ☐ Higher salaries due to acquisitions and longer quarter: $34 mm Higher premises and technology: $15 mm ■ Other expenses up due mainly to the impact of acquisitions and higher business and capital taxes, and litigation costs, partly offset by VAT recovery 11 Scotiabank % of risk-weighted assets Strong capital ratios 11.1 10.2 10.0 9.3 8.5 8.4 Q3/05 Q2/06 Q3/06 Tier 1 ■Tangible Common Equity (TCE) TCE decrease of 12 bps vs. Q2: ■ Risk weighted assets (RWA) growth: (46) bps - $10 billion increase in RWA driven by strong loan growth ■ Retained earnings growth: 34 bps 12

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