Scotiabank Earnings Report Q1 2019

Overview of Canadian Bail-in Regulations Compensation Regime ⚫ No creditor worse off: Creditors and shareholders are compensated where they have been made worse off than they would have been in a liquidation • Persons who hold the following claims at the time of entry into resolution are entitled to compensation: o Shares of the institution 。 Subordinated debt vested in CDIC at the time of entry into resolution 。 NVCC subordinated debt subsequently converted into common shares pursuant to contractual terms Liabilities subsequently converted into common shares pursuant to Bail-in power 。 Any liability of the institution if the institution was wound-up at the end of the resolution process 。 Any liability of the institution that was assumed by a CDIC- owned work-out company or bridge bank which was subsequently liquidated or wound-up • Compensation = liquidation value - resolution value • Right to compensation is not transferrable Resolution Tools • CDIC has a number of tools to assist or resolve a failing DSIB 1. Liquidation of the bank and reimbursement of insured deposits 2. Bank is placed under temporary CDIC control to complete its sale to a willing buyer (forced sale) via one of two approaches: О All shares are transferred to CDIC and it becomes the sole shareholder to facilitate the sale; or CDIC is appointed receiver to sell all or some of the assets and liabilities to the buyer Under both approaches, critical banking operations are maintained 3. Bank is placed under temporary CDIC control and CDIC transfers certain functions to a bridge bank which is temporarily owned by CDIC Meant to bridge the gap from when an institution fails and when a buyer or private-sector solution can be found о Critical banking operations are maintained 4. Bail-in regime Scotiabank® 39 99

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