International Banking: Second Half 2010 Outlook

International Banking: Earning Through Challenges Net Income ($ millions) 332 294 288 Q2/10 vs. Q2/09 ■ Revenues down 3% (up 10% ex. FX) + Wider loan spreads in Latin America + $36MM gain on sale of shares in Siam City Bank Negative impact of FI ■ PCLs up $58MM Expenses down 7% (up 4% ex. FX) - Higher compensation costs - Increased professional fees & business taxes Q2/10 vs. Q1/10 Revenues down 8% (down 6% ex. FX) Margin compression in the Caribbean - Lower treasury results in Mexico & Chile - Negative impact of financial instruments (FI) + Higher insurance revenues in Caribbean + $36MM gain on sale of shares in Siam City Bank ■ PCLs down $4MM " Q2/09 Q1/10 Q2/10 " Significantly lower tax rate Expenses down 4% + Positive impact of FX + Lower professional fees & seasonality Scotiabank 11 Scotia Capital: Strong Quarter, Excellent Credit Performance Net Income ($ millions) 328 381 Q2/09 Q1/10 391 Q2/10 Q2/10 vs. Q2/09 ■ Revenues up 1% + Higher trading revenues · Significantly lower loan volumes PCLs down $183MM (1) Expenses up 29% - Higher performance-based compensation - Increased salaries & technology expenses Q2/10 vs. Q1/10 Revenues down 5% - Lower loan volumes & slightly reduced spreads - Continued strong trading revenues, but slightly lower than Q1/10 ■ PCLs down $38MM (1) Expenses down 3% + Lower performance-based compensation (1) Q2/10 included an auto sectoral reversal of $19MM. Q2/09 included an auto sectoral provision of $50MM. Scotiabank 12

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