Scotiabank Canadian Legislative Covered Bonds Presentation

2017 Business Line Outlook Canadian Banking • • Expect solid loan growth across retail mortgages, auto lending, commercial loans and credit cards, as well as deposit growth • Stable to slightly increasing margins • Higher PCLs driven by change in business mix, but risk adjusted margin should remain stable • An improvement in productivity will continue to be an area of focus Key priorities include: deepen primary relationships and strengthen customer experience, optimize business mix, focus on cost initiatives and drive digital transformation International Banking Global Banking and Markets Good momentum and continue to leverage diversified footprint, with particular focus on the Pacific Alliance • Expect low double digit growth in the Pacific Alliance, with stable margins and credit quality • Expense management and delivering positive operating leverage remains a key priority, along with strategic investments that will help deliver a stronger customer experience • Focused on organic growth, but will consider acquisition opportunities in our existing footprint • Key priorities include: Improving customer experience and implementing Net Promoter Score, build digital banking organizations in the Pacific Alliance, enhance business mix by growing core deposits and lower expenses to fund technology investments and improve productivity Business conditions and financial results should continue to improve in 2017 • Expect higher revenues from focus clients, GTB, Corporate Banking and Investment Banking Expense management should provide cost savings and loan losses are expected to moderate toward historic levels • U.S. and Canada are expected to drive the bulk of the growth, while Europe faces Brexit uncertainty and high regulatory costs, and Asia rebuilds after repositioning its asset base Key priorities include: Increase our customer focus and deepen relationships, align business mix more closely to our customers, improve resource productivity and transform digitally 11 Scotiabank®

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