Scotiabank Strategy & Financial Objectives

Canadian Economy and Financial System Canadian Economy The 15th largest economy in the world, with a large export orientation Economy is diversified, with a focus on service, primary, manufacturing, construction and utility industries Proactive governments and central bank Manageable Canadian government deficits Moderate growth with slowdown in commodity sectors balanced by continuing manufacturing, service sector, construction, and manufacturing activity Strong Financial System Effective regulatory framework Principles based regime - - Single regulator for major banks Conservative capital requirements Proactive policies and programs Risk management practices - - - - Conservative lending standards Few sub-prime mortgages Relatively little securitization Primarily originate to hold model Canadian banks well capitalized and profitable Canadian Banking System ranked World's Soundest by World Economic Forum for 8th consecutive year Global Competitiveness Report (2015-2016) 33

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