Scotiabank Financial Analysis Q2/17

Q2 2017 Financial Performance Year-over-Year Highlights 1,2 Net Income grew 11% Diluted EPS growth of 11% Revenue up 4% on a TEB basis $ millions, except EPS Q2/17 Q/Q Y/Y1,2 • Net Income 2,061 +3% +11% • Diluted EPS $1.62 +3% +11% • Revenues $6,581 -4% •Revenues (TEB) $6,918 +4% Expenses $3,601 -2% +5% Productivity Ratio Productivity Ratio (TEB) 52.1% -130bps +30bps . Core Banking Margin 2.54% +14bps +16bps 54.7% 100bps +250bps Dividends Per Common Share +$0.02 +$0.02 $0.76 $0.74 $0.74 $0.72 $0.72 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 • • Higher asset growth in Canadian and International Banking and increased contributions from asset/liability management activities Increased fees and gains on sale of real estate Offset by reduced net gain on investment securities and impact of foreign currency translation Expense growth of 5% • Focused business investment to drive higher digital and technology related expenses Realized $155 million in savings from our structural cost transformation in Q2/17 Positive operating leverage on a TEB basis PCL ratio improved 15 bps Announced dividend increase ¹Adjusting for restructuring charge of $278 million after-tax ($378 million before-tax) in Q2/16 Due mostly to lower energy provisions Scotiabank® 2Using TEB grosses up tax-exempt income earned on certain securities reported in either net interest income or non-interest income to an equivalent before tax basis. A corresponding increase is made to the provision for income taxes; hence, there is no impact on net income. 6

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