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Investor Presentaiton

Household Debt: Canada vs. U.S. Canadian households' balance sheets compare favourably to US Canadian debt-to-income ratio is now 2.2 percentage points below the U.S. peak in 2008 Over the last 8 years, increases in the Canadian debt-to-income ratio have slowed vs 2002-10 。 Calculated on the same terms, Canada's debt-to-income is currently 167% vs 134% in the U.S. Canadian debt-to-assets ratio remains below U.S. o U.S. households have incentive to pursue higher asset leverage in light of mortgage interest deductibility o Debt is a stock concept, to be financed over one's lifetime. Income is a flow concept measuring one single year's earnings. Debt should be compared to lifetime or permanent income, or assets • Ratio of total household debt-to-GDP remains lower in Canada than U.S. 。 Calculated on a comparable basis, the ratio of household credit market debt is 98.6% in Canada vs 101.1% in the U.S. Household Credit Market Debt to Disposable Income Total Household Liabilities As % of Total Assets Household Credit Market Debt to GDP 200 household credit liabilities as % of disposable income 180 173.8 160 140 120 100 88 80 60 30 25 166.8 134.0 20 20 Adjusted Canadian* 15 Official Canadian Official US 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. 10 household debt as % of assets US 130 % of GDP 120 110 US with unincorporated business debt 100 Original Canada 102.9 101.1 98.6 90 Canada* 17.8 80 Canada 70 16.8 66 60 Original US 74.9 T 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Federal Reserve Board, Statistics Canada. 50 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. Scotiabank® 34 34
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