#19 Scotiabank Scotiabank Investor Presentation April 30, 2003 1 Second Quarter Overview Peter Godsoe Chairman & Chief Executive Officer 2#29 Scotiabank Performance highlights Solid, consistent earnings ➤ EPS: $1.12 vs. $1.11 ➤ ROE: 17.2% vs. 18.3% Credit quality stabilizing ➤ Net impaired loans: $378 million, down $181 million from Q1/03 ➤ Specific provisions: $248 million, down $77 million from Q1/03 Lower revenues ➤ mainly due to stronger Canadian dollar and sale of businesses Strong capital ratios ➤ Tier 1: 10.3% ➤ Tangible Common Equity (TCE): 8.4% Dividend increase ➤ +4 cents/quarter Scotiabank 3 Consistent earnings EPS (diluted), $ 1.10 1.11 1.11 1.12 1.05 1.09 1.04 1.05 1.01 Q2/01 Q3/01 0.05 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 * charges relating to Argentina of $1.05/share 4#39 Scotiabank Strength from core businesses net income, $ millions. 290 264 254 240 190 140 90 ㅎㅎ -10 40 Scotiabank ROE 171 169 150 120 Q2/02 Q2/03 74 -8 Domestic International Scotia Capital Other 5 Meeting most 2003 targets Q2/03 YTD/03 Target 17.2% 16.9% VS. 15-18% EPS Growth* 1% 1% VS. 5-10% Productivity 55.6% 53.4% VS. <58% Tier 1 10.3% 10.3% VS. 8%+ * *excluding 2002 charges relating to Argentina 6#49 Consistent record of dividend growth Scotiabank Annual dividend per share, cents 160 40 140 120 100 00 80 80 60 60 40 56¢ 20 20 168* Quarterly dividend up 19% yr/yr ■ Dividend payout range increased to 35-45% 1993 1995 1997 1999 2001 2003 *based on Q3/03 rate Scotiabank 7 Performance Review Sabi Marwah Senior Executive Vice-President & Chief Financial Officer 8#5Scotiabank $ millions Scotiabank Major items in Q2/03 Pre-tax After-tax Argentina Release of specific provisions Payment to Quilmes creditors 27 17 (31) (20) (4) (3) Gains (losses) on securities Sale of Panama PDI bonds LBO & other write-downs 63 (50) 13 322 (32) 8 Compensation Higher stock-based compensation (20) (13) Other Impact of lower tax rate n/a 30 Impact of stronger Canadian dollar (30) (20) 9 Net interest margin Margins up vs. Q1/03 Q2/03 vs. Q1/03 vs. Q2/02 2.25% 8 bps (9) bps Funding (N.A. & Europe) 1 (11) U.S. Corporate 2 3 Other 5 (1) 8 bps (9) bps 10#6Scotiabank $ millions Change Q2/03 vs. Q1/03 SA $ (69) སྱེ」 % (7) Lower other income Change Q2/03 vs. Q2/02 $ GA % (93) (9) 38 Reported Effect of sales of Argentine operations & merchant acquirer business (69) (7) Underlying (55) (5) (21) Deposit, payment & cards 14 (8) Investment, brokerage & trust (27) (46) Investment banking 20 43 (31) (6) Securities gains (48) Securitization revenue Other (9) 11 Expenses well controlled Scotiabank $ millions Change Q2/03 vs. Q1/03 Change Q2/03 vs. Q2/02 બ $ 74 25 % $ % Reported (76) (5) 31 Settlement with Quilmes creditors 31 Effect of sales of Argentine operations & merchant acquirer business (40) 43 3 (67) (5) 60 36 Stock & performance-based compensation (35) 7 1 Base expenses 12 (32) (3)#7Continued productivity leadership expenses as % of revenues Scotiabank 62 62 58 54 5.4 50 50 53.4% 98 99 00 01 02 YTD/03 13 Very strong capital ratios % of risk-weighted assets Scotiabank 10 10.3 10.0 Tier 1 9.9 00 8 6 8.5 8.4 8.0 Tangible Common 4 Equity 2 T 0 Q2/02 Q1/03 14 Q2/03#8Scotiabank $ millions Rising securities surplus Q2/03 Q1/03 Q4/02 Securities Surplus (Deficit) - Emerging Market Debt 432 343 219 Fixed Income 8 15 (113) - Equities (22) (114) (131) 418 244 (25) 9 Scotiabank 15 Business Line Results 16#9Scotiabank net income, $ millions 254 Domestic - solid quarter 294 264 Net income up 4% yr/yr ➤ qtr/qtr decline primarily due to 3 fewer days & moderately higher expenses Continued growth in retail assets & core deposits yr/yr ➤ residential mortgages up 9% ➤ revolving credit up 20% ➤ core deposits up 14% ■ Very good credit quality Q2/02 Q1/03 Q2/03 Scotiabank 17 International - diversified earnings net income, $ millions 171 167 150 Q2/02 Q1/03 Q2/03 ◉ Net income up 14% yr/yr ◉ Latin America ➤ Inverlat up 20% yr/yr ➤ gain on sale of PDI bonds " Caribbean ➤ lower earnings contribution primarily due to stronger Canadian dollar ■ Asia 18 ➤ unchanged results yr/yr#10Scotiabank Inverlat - increased ownership Scotiabank ■ Increased ownership in Inverlat to 91% ■ Purchased Mexican government's 36% interest for $465 million or 1.275x book value ■ Offer made to purchase remaining 9% of Inverlat shares held by former shareholders Expected to add $80+ million in earnings annually 19 Scotiabank Scotia Capital – loan losses declining net income, $ millions 169 138 120 Q2/02 Q1/03 Q2/03 ■ ■ ■ Net income up 41% yr/yr Decrease in provisions ➤ $98 million down yr/yr ➤ $53 million down qtr/qtr Lower revenues yr/yr ➤ lower funding spreads ➤ U.S. dollar depreciation 20#11Scotiabank Scotiabank Risk Review Warren Walker Executive Vice-President Global Credit Risk Management 21 24 Credit quality overview ■ Domestic ➤ retail - very good ➤ commercial - stable International - stable ■ Scotia Capital - stabilizing ➤ successful restructurings in Power sector 22 22#12Scotiabank Q2/03 highlights ■ Lower net impaired loans: $378 million ➤ down $181 million vs. Q1/03 ➤ lower formations in Scotia Capital ■ Lower specific provisions: $248 million ➤ down $77 million vs. Q1/03 ➤ $27 million reversal relating to Argentine cross-border exposure Scotiabank 23 Net formations by business line $ millions, Q2/03 Scotia Capital - Canada 73 - U.S. (11) - Europe/Asia 21 83 Domestic 79 International Total 24 (9) 153#13L Scotiabank Decline in net formations net formations, $ millions 1,019 1050 900 750 600 450 383 394 312 300 150 Other ■Scotia Capital 153 Q2/02 Q3/02 Q4/02 25 Q1/03 Q2/03 Scotiabank Decrease in specific provisions specific provisions, $ millions 475* 350 400 325 275* Allii Q2/02 Q3/02 Q4/02 *excluding Argentina 26 Q1/03 Q2/03 Other Scotia Capital#14Scotiabank Lower power & energy trading exposure Loans & acceptances, $ millions Investment Non-Investment Q2/03 Q1/03 Sector Grade Grade Total Total Regulated Utilities 665 630 1,295 1,392 Diversified Generation 777 777 879 Independent Power 439 389 828 936 Projects with PPAs* Other Power Projects 150 829 979 1,209 Total 1,254 2,625 3,879 4,416 Power Purchase Agreements Impaired Loans: gross $290; net $150 27 Scotiabank Modest airlines exposure Loans & acceptances, $ millions April 30, 2003 Sector Investment Grade Non-Investment Grade Total Operating airlines 28 81 109 Aircraft finance 124 154 278 Total 152 235 387 Impaired loans: gross $160; net $61 28#15Scotiabank Hotel exposure manageable Loans & acceptances, $ millions April 30, 2003 Investment Non-Investment Geographic Distribution Grade Grade Total Canada 392 285 677 USA 286 525 811 Caribbean & Central America 201 689 890 Other Total 323 623 946 1,202 2,122 3,324 Impaired Loans: gross $49; net $41 29 Scotiabank # days 14 12 10 8 Low variability of trading revenue... trading revenue, Q2/03 = 96%+ days positive 4 2 0 (1) 0 1 2 3 $ millions 4 5 6 7 8 30#16Scotiabank ...reflecting moderate market risk $ millions, February 1, 2003 to April 30, 2003 20 10 Actual P&L VaR 1 day 0 милуми -10 -20 Average 1 day VaR = $8.6 Scotiabank 31 Risk summary ■ Good credit quality in Domestic & International ▪ Scotia Capital: U.S. & European portfolios stabilizing continue to closely monitor the Power portfolio ■ Expect some decline in provisions in second half 32#17Scotiabank Scotiabank Outlook Peter Godsoe Chairman & Chief Executive Officer 33 33 Outlook ■ Credit quality ➤ continue to manage cautiously ■ Revenue growth challenging Strength from earnings diversification ➤ Inverlat contribution to increase Strong capital provides flexibility Expect to meet 2003 performance targets 34#18Scotiabank This document includes forward-looking statements which are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. These statements include comments with respect to our objectives, strategies, expected financial results (including those in the area of risk management), and our outlook for our businesses and for the Canadian, U.S. and global economies. By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. The Bank cautions readers not to place undue reliance on these statements, as a number of important factors could cause actual results to differ materially from the estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the economic and financial conditions in Canada and globally, fluctuations in interest rates and currency values, liquidity, regulatory developments in Canada and elsewhere, technological developments, consolidation in the Canadian financial services sector, competition, and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, financial condition or liquidity. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements. The Bank cautions that the foregoing list of important factors is not exhaustive. When relying on forward- looking statements to make decisions with respect to the Bank, investors and others should carefully consider the foregoing factors, other uncertainties and potential events. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Bank. 35