Q2 2014 Financial Review

Credit Quality Credit fundamentals remain strong - Modest increase in PCL ratio - up 2 bps Q/Q to 36 bps Loss rates in Canadian Banking up slightly International Banking loss rates up due to higher provisions in the Caribbean, partially offset by decreases in Latin America GBM credit performance continues to be strong Increase in net formations of impaired loans to $598 million Higher formations in International Retail and Commercial - Market risk remains well-controlled - - Average 1-day all-bank VaR: $18.1MM vs. $19.8MM in Q1/14 Two trading loss days in Q2/14 15 Provisions for Credit Losses Scotiabank ($ millions) Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Canadian Retail 106 103 106 118 127 Canadian Commercial 30 5 10 16 13 136 108 116 134 140 International Retail 180 177 170 187 196 International Commercial 14 17 37 32 34 194 194 207 219 230 Global Wealth & Insurance 1 1 Global Banking & Markets 12 11 (2) 3 5 Total 343 314 321 356 375 PCL ratio (bps) on impaired loans 35 31 31 34 36 Note: International Banking's total includes the impact of Colombian purchased portfolio. The Bank expects the PCL ratio to rise with the maturity of the acquired portfolio. See page 28 of the 2013 Annual Report. 16 Scotiabank 8

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