Scotiabank Financial Performance Review

Scotiabank Areas of Current Focus Montreal Accord ABCP CDOs and CLOS Monolines Secured Retail Auto Loans (GMAC) Hedge Fund Exposure Auction Rate Securities fair value of holdings: $144 million, unchanged from Q1/08 drawn liquidity lines to conduits: $44 million fair value of holdings: $1.2 billion (Q1/08: $1.4 billion) virtually all investment grade equivalent - nominal U.S. sub-prime exposure replaced credit default protection previously provided by a monoline other direct exposures not significant (<$50 million) indirect exposure: US$3.2 billion (Q1/08: US$4.4 billion) high quality of underlying assets, minimal exposure (<$50 million) to sub-prime mortgages exposure: $5.9 billion - internally modelled to investment grade (97% investment grade) now have ability to diversify some of the U.S. exposure to the Canadian market portfolio performing as expected majority of activity collateralized no credit issues with counterparties no exposure Scotiabank 31 Outlook credit quality to remain fairly stable for second half of 2008 . do not foresee significant change in loan losses from current levels expect loan loss provisions to increase gradually over medium term impact of acquisitions, organic growth and change in mix of loan portfolios . lower reversals and recoveries 32

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