Scotiabank Financial Performance Review

Scotiabank Strong revenue growth - up 12% vs. 2006 revenues (TEB), $ millions 13,021 11.648 7,629 6,848 5,392 4,800 2007 Net Interest Income (TEB) Other Income 3.302 3,294 2006 L 2,999 1,913 1,932 1,783 2007 vs. 2006 net interest income: +11% + strong organic and acquisition related retail asset growth margin compression due to higher funding costs & mix 2007 vs. 2006 other income: +12% ■broad based growth & positive impact of acquisitions + retail brokerage +$72 mm & mutual funds +$55 mm + net securities gains +$117 mm + investment banking revenues +$78 mm ■ negative forex translation ($80) mm Q4/07 vs. Q3/07 revenues flat ■ net interest revenue up 1%: + solid retail asset growth - negative forex translation ($46) mm ■ other income down 2%: + higher securities gains - lower underlying trading revenues 1,389 1,216 1,362 Q4/06 Q3/07 Q4/07 Scotiabank expenses, $ millions 6,994 6,443 - negative forex translation ($41) mm ■ VISA gain offset by losses on structured credit instruments 13 Investing for future growth 2007 vs. 2006 expenses: +9% ■ 40% of increase due to acquisitions ■ salaries & employee benefits +$215 mm: • ■ premises & technology +$139 mm: acquisitions & higher staffing for branch expansion • acquisitions, new branches & growth initiatives • higher advertising & professional fees ■ other expenses +$197 mm: 3,983 3,768 1,353 1,214 1,461 1,658 2006 2007 Salaries & employee benefits Premises & technology Other 1,708 1,752 • $51 mm VAT recovery in 2006 ■ forex translation ($77) mm Q4/07 vs. Q3/07 expenses: +2% 1,792 " 963 966 1,013 spending on revenue growth initiatives: • advertising & business development +$23 mm technology +$22 mm • professional fees +$28 mm • salaries +$11 mm 362 322 335 ■ lower performance based compensation ($42) mm " 420 404 467 pension & other benefits ($26) mm Q4/06 Q3/07 Q4/07 ■ forex translation ($30) mm 14

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