Scotiabank Financial Performance Review

Scotiabank # days 10 8 4 2 Trading revenue Q4/07 Trading Revenue* ($ millions) 0 (17) (14) (12) (6) (4)(3)(2) 0 1 2 3 4 5 6 7 8 9 1011121314 16 ■86% days had positive results in Q4/07 vs. 91% in Q3/07 Daily trading losses exceeded VaR on August 7th * Excludes $115 million loss on consolidation of a Bank-sponsored conduit 35 Scotiabank Asset classes of current focus Asset class U.S. sub-prime mortgage exposure Canadian non-bank ABCP conduits Scotia-sponsored conduits CDOs and CLOS Structured Investment Vehicles (SIVS) LBO underwriting commitments Hedge fund exposure no direct exposure ⚫ indirect exposure nominal Comments ⚫fair value of holdings is $323 mm, of which $187 mm relates to Montreal Accord ⚫ certain holdings were written down by 20% ⚫ other holdings not written down due to planned restructuring, nature of assets in the conduit, or acquired at fair value through purchase of Dundee Bank of Canada ⚫liquidity lines to conduits total $570 mm, of which $370 mm relates to Montreal Accord drawdowns total $88 mm ⚫ commercial paper outstanding for non-consolidated conduits with global liquidity support total $14.5 B ⚫ multi-seller conduits contain primarily traditional assets ⚫nominal U.S. sub-prime exposure nominal commercial paper inventory ⚫ consolidated one conduit whose assets were highly-rated structured credit products ⚫risk has largely been hedged and is being managed as part of the Bank's trading risk ⚫ investments total $1.2B, majority are highly rated; including $516mm acquired at fair value through purchase of Dundee Bank of Canada ⚫ Scotia Capital trades in synthetic CDOS, which is largely a customer driven business ⚫ fair value of investments is $125 mm ⚫ do not sponsor, manage or provide liquidity support to SIVS • $200 mm ⚫ no issues of concern majority of activity is collateralized ⚫no credit issues with counterparties 36

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