2006 Financial Overview and 2007 Priorities

Scotiabank Performance Review Luc Vanneste Executive Vice-President & Chief Financial Officer Scotiabank ☐ Net income* 3,600 2,400 1,200 3,184 Financial Performance -ROE 3,549 30 20 10 0 0 2005 2006 1,000 928 30 890 803 750 500 250 0 Q4/05 Q3/06 Q4/06 * net income available to common shareholders, $ millions 20 10 Overview 2006 vs. 2005 net income: +12% ■ record earnings and high ROE driven by strong asset growth, positive impact of acquisitions and stable credit quality partly offsetting: - negative forex translation ($153) mm, - margin compression from higher funding costs - higher expenses ($400) mm due mainly to acquisitions and revenue growth initiatives Q4/06 vs. Q4/05 net income: +11% ■ positive impact of acquisitions, higher retail volumes & higher trading revenues, partly offset by lower securities gains Q4/06 vs. Q3/06 net income: (4)% ■ VAT recovery in Q3, negative impact of AcG-13 & lower net securities gains " partly offset by lower credit losses and higher trading revenues 10

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