Investor Presentation - Scotiabank€¦ · Bank’s 2019 Annual Report under the headings...

Investor Presentation Fourth Quarter 2019

2

Caution Regarding Forward-Looking Statements

From time to time, our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis in the Bank’s 2019 Annual Report under the headings “Outlook” and in other statements regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank’s businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as “believe,” “expect,” “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “project,” and similar expressions of future or conditional verbs, such as “will,” “may,” “should,” “would” and “could.” By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of

changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank’s ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank's information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; 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, businesses, 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 preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank’s results, for more information, please see the “Risk Management” section of the Bank’s 2019 Annual Report, as may be updated by quarterly reports. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2019 Annual Report under the headings “Outlook”, as updated by quarterly reports. The “Outlook” sections are based on the Bank’s views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank's shareholders and analysts in understanding the Bank's financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, 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 its behalf. Additional information relating to the Bank, including the Bank’s Annual Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

3

TABLE OF CONTENTS Scotiabank Overview 4

• Leading Bank in the Americas 5 • Well-Diversified Business with Strong Returns 6 • Why Invest in Scotiabank? 7 • Well Positioned in Higher ROE Markets 8 • Economic Outlook in Core Markets 9 • Q4 2019 Financial Performance 10 • Fiscal 2019 Financial Performance 11 • Repositioning is Substantially Complete 12 • Recent Acquisition Activity 13 • Acquisition & Divestiture Activity 14 • Earnings and Dividend Growth 15 • Strong Capital Generation 16 • Growth in Digital Banking 17 • Environmental, Social & Governance (ESG) 18

Business Line Overview: Canadian Banking 20 Business Line Overview: International Banking 29 Business Line Overview: Global Banking and Markets 39 Risk Overview 42

• Risk Snapshot 43 • Credit Performance by Business Lines 44 • Historical PCL Ratios on Impaired Loans 45 • Canadian Retail: Loans and Provisions 46 • International Retail: Loans and Provisions 47

• Energy Exposure 48

Treasury and Funding 49 • Funding Strategy 50 • Wholesale Funding 51 • Deposit Overview 52 • Wholesale Funding Utilization 53 • Liquidity Metrics 54

Appendix 1: Key Market Profiles 55

Appendix 2: Canadian Housing Market 62

Appendix 3: Additional Information 68

Contact Information 71

4

Scotiabank Overview: 2019

• Stronger second half performance to finish 2019 with positive operating leverage

• Greater geographic focus, increased scale in core markets, and improved business mix

• Positioned for higher capital ratios, active buybacks, and sustainable long-term earnings growth

• Repositioning of business substantially complete

• Strong credit quality. Stable credit metrics.

5

55%

9%

23%

5% 8%

Peru (BBB+)

#3 Bank

United States (AA+) Top 15 FBO

Canada (AAA) #3 Bank

Leading Bank in the Americas1 Core markets: Canada, US, Mexico, Colombia, Peru and Chile

Full-Service,

Universal Bank

Canada Mexico Peru Chile Colombia Caribbean Uruguay

Wholesale Operations USA UK Singapore Australia Ireland Hong Kong SAR China Brazil South Korea Malaysia India Japan

7th largest bank by assets1 9th largest bank by market capitalization1

2018 Bank of the Year Latin America and the

Caribbean by Latin Finance

1 Source: Bloomberg November 20, 2019; 2 By assets and market capitalization; 3 Adjusted for Acquisition and divestiture-related amounts, including Day 1 PCL on acquired performing loans, integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and losses/(gains) on divestitures and related costs; 4 Exclude the pension revaluation benefit gain of $203MM pre-tax, $150MM after-tax in Q1/18; 5 Ranking based on market share in loans as of September 2019 for PACs (incl. M&A), as of July 2019 in Canada for publically traded banks; 6 Adjusted net income attributable to equity holders of the Bank for the twelve months ended October 31, 2019

Earnings by Market3,6

Scotiabank3 FY2019 Change

FY19/FY18

Revenue $31.2B +8%

Net Income $9.4B +3%

Return on Equity 13.9% -100 bps

Operating Leverage4 -0.6% n.a.

Productivity Ratio 52.7% +100 bps

Total Assets $1.1T +9%

Ranking by Market Share5

Canada #3

USMCA USA Top 15 Foreign Bank

Mexico #6

Peru #3 Chile #3

Colombia #6

Canada

U.S.A

PAC

C&CA

PAC

Americas (~90%)

Other

Colombia (BBB-) #6 Bank

Chile (A+) #3 Bank

Mexico (BBB+)

#6 Bank

6

Well-Diversified Business with Strong Returns Diversified by business and by market, providing stability and lowering risk

Canadian

Banking

P&C

38%

International

Banking P&C

32%

Global

Banking &

Markets

17%

Global

Wealth

Management

13%

Earnings by Business Line1,2,3 Earnings by Market1,2

1 Net income attributable to equity holdersor for the twelve months ended October 31, 2019; 2 Adjusted for Acquisition and divestiture-related amounts, including Day 1 PCL on acquired performing loans, integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and losses/(gains) on divestitures and related costs; 3 Excluding Other segment

19.0% 14.8% 13.3% 13.9%

Canadian Banking International Banking Global Banking and

Markets

All Bank

Caribbean and

Central America

FY 2019 EARNINGS MIX

$9.2B3

FY 2019 EARNINGS MIX

$9.2B3 Per

Personal & Commercial Banking

70%

Wholesale Banking

17%

Wealth Management

13%

Canada

55%

U.S.

9%

Mexico

6%

Peru

9%

Chile

6%

Colombia

2% C&CA

5%

Other

8%

Europe, Asia,

Brazil, Australia

7

Why Invest in Scotiabank?

Leading bank in the Americas

Diversified exposure to high quality growth markets

Increasing scale and market share in core markets

• Leading Canadian bank. Top 15 foreign bank in U.S.

• Leading bank in the Pacific Alliance growth markets of Mexico, Peru, Chile and Colombia

• Gaining scale and market share in six core markets of Canada, US, Mexico, Peru, Colombia and Chile

• Competitive advantages in technology, risk management, and funding versus local competitors

• Increasing scale in Wealth Management and P&C businesses

• Strong foundation in Canada. Unique footprint in Americas provides diversification with growth.

• Strong balance sheet, capital and liquidity ratios

• Attractive return on equity and dividend growth

• > 80% of earnings from core P&C banking and wealth businesses; > 80% of earnings from 6 core markets

• Lowered operational risk with more focused footprint (announced or completed exit from 21 countries and 11 businesses since 2013)

• Strong Canadian risk management culture: strong capabilities in AML and cybersecurity

Improved earnings quality, lower risk profile

• High levels of technology investment supports digital banking strategy to increase digital sales and adoption

• Named to Top 25 ”World’s Best Workplaces” (2018)

Strengthening competitive advantages in technology and talent

8

19.1%

15.3%

12.1%11.0%

6.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Pacific Alliance Canada US Asia Europe

Well Positioned in Higher ROE Markets

Mexico Peru Colombia Chile

Germany UK France Spain Switzerland Italy Netherlands Belgium Denmark

China Japan South Korea India Indonesia Malaysia Vietnam Philippines Hong Kong

JP Morgan BofA Citigroup Wells Fargo SunTrust US Bancorp BB&T PNC Financial Fifth Third M&T

Banking ROE by Market1

Royal Bank TD Bank Scotiabank BMO CIBC

1 Return on equity in latest reporting period for leading bank by market share in loans for each country. Canada and US figures are average for leading banks.

9

Economic Outlook in Core Markets Growth in Pacific Alliance expected to be above that of Canada and the U.S. in 2020

2019 - 2020 REAL GDP GROWTH FORECAST (%)

Source: Scotiabank Economics. Forecasts as of January 6, 2020.

Real GDP (Annual % Change)

Country 2000–18 average

2019f 2020f

Mexico 2.2 0.0 1.0

Peru 4.9 2.3 3.0

Chile 3.9 1.0 1.4

Colombia 3.8 3.2 3.6

PAC Average 3.7 1.6 2.3

Canada 2.1 1.6 1.5

U.S. 2.1 2.3 1.6

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Q4 2019 Financial Performance Strong revenue growth and positive operating leverage

$MM, except EPS Q4/19 Y/Y Q/Q

Reported

Net Income $2,308 +2% +16%

Pre-Tax, Pre Provision Profit $3,657 +8% +6%

Diluted EPS $1.73 +1% +15%

Revenue $7,968 +7% +4%

Expenses $4,311 +6% +2%

Productivity Ratio 54.1% (50 bps) (90 bps)

Core Banking Margin 2.40% (7 bps) (5 bps)

PCL Ratio1 50 bps +11 bps +2 bps

PCL Ratio on Impaired Loans1 49 bps +7 bps (3 bps)

Adjusted2

Net Income $2,400 +2% (2%)

Pre-Tax, Pre Provision Profit $3,765 +8% (2%)

Diluted EPS $1.82 +3% (3%)

Revenue $7,962 +7% -

Expenses $4,197 +6% +2%

Productivity Ratio 52.7% (50 bps) +100 bps

• Adjusted Net Income up 2%2

o Other items reduced net income growth by 2%3

o Pre-tax, pre-provision profit (PTPP) up 8%2

• Revenue up 7%2

o Net interest income up 3%

o Non-interest income up 12%2

• Expense growth of 6%2

• Operating leverage of +1.0%2

• Higher PCL ratio on impaired loans1. Y/Y increase driven by hurricane-related recoveries in Q4/18

YEAR-OVER-YEAR HIGHLIGHTS

ADJUSTED NET INCOME4, 5 BY BUSINESS SEGMENT ($MM)

1 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures 2 Adjusted for Acquisition and divestiture-related amounts, including integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and losses on divestitures and related costs 3 See Slide 20 for Other Items Impacting Financial Results

4 Y/Y growth rate is on a constant dollars basis 5 After non-controlling interest

1,146 746

416

1,160 781

405


MarketsQ4/18 Q4/19

+1% Y/Y +4%

Y/Y4 -3% Y/Y

11

Fiscal 2019 Financial Performance Stronger second half performance to finish 2019

$MM, except EPS 2019 Y/Y

Reported

Net Income $8,798 +1%

Pre-Tax, Pre Provision Profit $14,297 +4%

Diluted EPS $6.68 (2%)

Revenue $31,034 +8%

Expenses $16,737 +11%


Core Banking Margin 2.44% (2 bps)

PCL Ratio1 51 bps +3 bps

PCL Ratio on Impaired Loans1 49 bps +6 bps

Adjusted2

Net Income $9,409 +3%

Pre-Tax, Pre Provision Profit $14,739 +6%

Diluted EPS $7.14 -

Revenue $31,161 +8%

Expenses $16,422 +10%


PCL Ratio1, 2 49 bps +8 bps


o Other items reduced net income growth by 4%3

o Pre-tax, pre-provision profit (PTPP) up 6%2

• Revenue up 8%2


o Non-interest income up 11%2

• Expense growth of 10%2, or 9%2, 4 excluding 2018 pension revaluation benefit gain

• Operating leverage of -2.1%2 or -0.6%2, 4

• Higher PCL ratio on impaired loans1


ADJUSTED NET INCOME2, 5 BY BUSINESS SEGMENT ($MM)

4,416 2,819

1,758

4,485 3,188

1,534


Markets2018 2019

+2% Y/Y

+13% Y/Y -13%

Y/Y

1 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures 2 Adjusted for Acquisition and divestiture-related amounts, including Day 1 PCL on acquired performing loans, integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and losses/(gains) on divestitures and related costs 3 See Slide 20 for Other Items Impacting Financial Results

4 Excluding the pension revaluation benefit gain in 2018 of $203 million pre-tax 5 After non-controlling interest

12

Repositioning is Substantially Complete

Simplified the Bank

● 20 non-core (higher risk, low growth) countries exited since 2014

● 10 non-core (non-customer facing, low return) businesses exited since 2014

● >90% of earnings generated from America’s footprint

Improved Earnings Quality

● >80% of earnings from six core markets (Canada, the US and Pacific Alliance)

● Targeting higher earnings contribution from stable P&C Banking and Wealth Management businesses

● Targeting 65%-70% from P&C Banking, ~15% from Global Wealth Management

De-Risking the Bank

● Improving credit quality metrics and generating higher mix of earnings from investment grade countries

● Exits from sub-investment grade, low growth jurisdictions

● Gross impaired loans ratio decreased from 110 bps in 2017 to 78 bps (pro forma) in 2019

13

Canada $3.5B Adds wealth management assets of $96B. Adds 110,000 potential primary customers. Expands wealth management offering.

Chile $2.9B Doubles market share. Creates 3rd largest bank. Further diversifies business.

Peru $0.2B Creates 2nd largest bank in credit cards. Further diversifies business.

Colombia $0.4B Creates market leader in credit cards.

Dominican Republic

$0.4B Doubles customer base. Creates 4th largest bank.

Increasing Scale via Strategic Acquisitions

Recent Acquisition Activity 2018-2019

14

Acquisition & Divestiture Activity 2015-2019

Acquisitions: $7.5B Divestitures/Exits: $9B

2015

2016

2017

2018

2019

Cencosud (Chile)

Citibank (Peru)

Turkey

Egypt

UAE

Vietnam

Taiwan

Haiti JPMorgan Chase Credit Card Portfolio

Citibank (Panama)

Citibank (Costa Rica)

France

Hollis Wealth

MD Financial, Jarislowsky Fraser

BBVA (Chile)

Citibank (Colombia)

CrediScotia (Jamaica)

Banco Progreso (Dominican Republic)

Cencosud (Peru)

7 Leeward Islands

Thailand*

PR/USVI*

El Salvador*

Pension & Insurance (Dominican Republic)

Insurance*(Trinidad & Tobago)

Pension* (Colombia)

* Announced and pending.

2020 British Virgin Islands*

15

$1.96

$3.49

09 10 11 12 13 14 15 16 17 18 19

1 Reflects adoption of IFRS in Fiscal 2011. 2 Excludes notable items for years prior to 2016. For 2016 onwards, results adjusted for acquisition-related costs including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions and amortization of intangibles related to current and past acquisitions. 3 As of October 31, 2019

Earnings per share (C$)1,2

$3.31

$7.14

09 10 11 12 13 14 15 16 17 18 19

Dividend per share (C$)

+8%

CAGR

+6%

CAGR

Total shareholder return3

6.4%

9.8%

12.0%

8.8%

11.9% 11.9%

5 Year 10 Year 20 Year

Scotiabank Big 5 Peers (ex. Scotiabank)

Earnings and Dividend Growth Strong track record of stable and predictable earnings and growing dividends

16

CET1 Ratio

Strong Capital Levels

11.1% 11.1% 11.1% 11.2% 11.1%

1.4% 1.4% 1.4% 1.1% 1.1% 1.8% 2.1% 2.2% 2.5% 2.0%

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

CET1 Tier 1 Tier 2

14.6% 14.7% 14.2% 14.3% 14.8%

Internal Generation

Strong Capital Generation Clear path to higher capital ratio

-4 bps +3 bps 11.2% +25 bps -20 bps -8 bps -7 bps 11.1%

~50 bps

Q3/19 Earnings

Less Dividends

RWA Impact

(ex. FX)

Share Buybacks

(Net of Issuances)

Foreign

Exchange

Translation

Non-core

Divestitures

Other (net) Q4/19 Reported Impact of

Announced

Divestitures

Q4/19

Pro-Forma

~11.55%

17

Growth in Digital Banking Steady progress against digital targets

1 Canada: F2017 22%, F2018 26%, F2019 26% PACs: F2017 13%, F2018 19%, F2019 29% 2 Canada: F2017 36%, F2018 38%, F2019 42% PACs: F2017 20%, F2018 26%, F2019 35% 3 Canada: F2017 17%, F2018 15%, F2019 12% PACs: F2017 29%, F2018 24%, F2019 19%

• Sales grew 600 bps against Q4 of last year

• Strong progress made across key markets; key highlight includes Colombia improving >1,000 bps against Q4 of last year

• In-branch transactions decreased the most in 3 years; 400 bps against Q4 of last year

Digital Retail Sales1 Digital Adoption2 In-Branch Financial Transactions3

Goal >50%

Goal

>70%

Goal <10%

11

15

22

28

F2017 F2016 F2019 F2018

+1,700 bps

26 29

33 39

F2017 F2016 F2018 F2019

+1,300 bps

26 23

20

16

F2017 F2016 F2018 F2019

-1,000 bps

• Announced our commitment to mobilize $100 billion by 2025 to reduce the impacts of climate change

• Issued inaugural USD 500 million Green Bond of which proceeds were used to fund assets under the Scotiabank Green Bond Framework. Includes the categories of renewable energy, clean transportation and green buildings

• Directed proceeds of internal fee on carbon into renewable energy & efficiency initiatives, and are on track to achieve a greenhouse gas reduction target of 10% by 2021 compared to 2016

• Launched our new, more efficient workspace model at our head office in Toronto, Canada, which has to date reduced greenhouse gas emissions by 741 tonnes and is expected to reduce paper use by 86%

• Invested nearly $100 million globally in communities where we operate as part of our global philanthropy program

• Committed $3 billion in funding over the first three years of The Scotiabank Women Initiative to advance women-led businesses in Canada

• Signed the UN Women’s Empowerment Principles and UN LGBTI Codes for Business Conduct

• Continued to deliver on our commitment of $250 million over 10 years to help employees adapt to the digital economy

• Served as the lead bank in Canada in the Finance Against Slavery and Trafficking initiative, the Financial Access project, to open accounts for survivors of modern slavery

• For the second consecutive year, ranked by the Dow Jones Sustainability Index as among the top 1% of global financial institutions for Corporate Governance

• 38% of our directors are female. We first established a Board diversity policy in 2013

• Appointed Mr. Aaron Regent as Chairman of the Board. Mr. Regent is Scotiabank’s third independent Chairman, as we have separated the CEO and Chairman roles since 2004

• Dedicated significant Board time to cybersecurity, anti-money laundering, conduct and culture issues, keeping the Bank safe

Environmental, Social & Governance (ESG) Highlights from 2019

19

Environmental, Social & Governance (ESG)

Scotiabank Climate Commitment to mobilize

$100 billion by 2025 to reduce the impacts of climate change. This is detailed in our External Position Statement.

Memberships, Associations and Partnerships

20

Business Line Overview

Canadian Banking

21

Canadian Banking Top 3 bank in personal & commercial banking, wealth and insurance in Canada

55%

27%

18%

60%

21%

17%

2%

• Improve Sustained Business Performance: Invest to grow our higher ROE businesses, including Business Banking, to deliver consistent and stable long-term earnings growth

• Instill a Winning team Culture: Engage employees through a RESULTS (Revenue, Earnings, Simplify, Urgency, Listen, Trust, Support) focused culture

• Superior Customer Experience: Develop deeper household relationships for our customers across Canada by providing differentiated focus and service to those who are most loyal and engaged

• Scale our unique partnerships and assets: Leverage our long-term partnerships and assets like MLSE, Scene and Wealth businesses to generate growth across our division

• Canadian Banking provides a full suite of financial advice and banking solutions, supported by an excellent customer experience, to Retail, Small Business, Commercial Banking, and Wealth Management customers. Canadian Banking also provides an alternative self-directed banking solution to over 2 million Tangerine Bank customers.

STRATEGIC OUTLOOK

REVENUE MIX1

Retail

Wealth

Commercial Personal

Loans Business and

Government Loans

AVERAGE LOAN MIX1

$3.6B $358B

Residential Mortgages

1 For the three months ended October 31, 2019; 2 3-5 year target; 3 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions; 4 Reflects adoption of new accounting standard, IFRS 15; 5 For the twelve months ended October 31, 2019; 6 Attributable to equity holders of the Bank

Credit Cards

MEDIUM-TERM FINANCIAL OBJECTIVES

Target2 2019 3,4.5

Net Income Growth6 7%+ +2%

Productivity Ratio <49% 49.4%

CB ex Wealth <45% 45.4%

Wealth <65% 61.6%

22

Canadian Banking Margin expansion, strong deposit growth, positive operating leverage


Reported Net Income1 $1,143 +3% (1%)


Revenue $3,566 +4% +1%

Expenses $1,779 +2% +3%

PCLs $247 +25% +3%


Net Interest Margin 2.47% +2 bps (2 bps)

PCL Ratio2 0.27% +4 bps -

PCL Ratio Impaired Loans2 0.28% +6 bps (1 bp)

Adjusted3

Net Income1 $1,160 +1% (1%)


Expenses $1,755 +3% +3%



1 Attributable to equity holders of the Bank 2 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures 3 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions


o Lower real estate gains reduced net income growth by 2%

o Margin expansion. Higher PCLs

o Wealth Management earnings up 15%

• Revenue up 4%


o Excluding M&A and IFRS 15, revenue was up 3%

• Loan growth of 5%

o Residential mortgages up 5%; credit cards up 6%

o Business loans up 11%

• Deposit growth of 9%

o Personal up 6%; Non-Personal up 16%

• NIM up 2 bps

o Primarily driven by the impact of prior rate

increases

• Expenses up 3%3

o Technology and regulatory initiatives

o Excluding M&A and IFRS15, expenses were up 2%

• Quarterly operating leverage of +0.6%3 ; full-year operating leverage flat3

• PCL ratio2 up 4 bps to 27 bps

2.45% 2.44% 2.46% 2.49% 2.47%

ADJUSTED NET INCOME1,3 ($MM) AND NIM (%)

1,160 1,146 1,089 1,062 1,174

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

23

Canadian Banking: Financial Performance High quality retail loan portfolio: ~92% secured

1 LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet HPI data 2 Spot Balance as of October 31, 2019

DOMESTIC RETAIL LOAN BOOK2

79%

3% Credit Cards

5% Unsecured

13% Automotive

Real Estate Secured Lending

$300.8B

• High quality residential mortgage portfolio

o 39% insured; remaining 61% uninsured has a LTV of 55%1

• Market leader in auto loans

o $38.6 billion auto loan portfolio with 7 OEM relationships (3 exclusive)

o Prime Auto and Leases (~91%)

o Stable lending tenor with contractual terms for new originations averaging 78 months (6.5 years) with projected effective terms of 54 months (4.5 years)

• Growth opportunity in credit cards

o $7.7 billion credit card portfolio represents ~3% of domestic retail loan book and 1.3% of the Bank’s total loan book

o Organic growth strategy focused on payments and deepening customer relationships

o Upside potential from existing customers: over 80% of growth is from existing customers (penetration rate mid-30s and trending up versus peers in the low-40s)

o Strong risk management culture with specialized credit card teams, customer analytics and collections focus

24

Canadian Banking: Residential Mortgages High quality, diversified portfolio

$102.4

$31.5 $27.1 $14.5 $10.9 $8.8

$14.2

$10.7 $3.7

Ontario BC & Territories Alberta Quebec Atlantic Provinces Manitoba &

Saskatchewan

1 LTV calculated based on the total outstanding balance secured by the property. Property values indexed using Teranet HPI data

2 New originations defined as newly originated uninsured residential mortgages and have equity lines of credit, which include mortgages for purchases refinances with a request for additional funds and transfer from other financial institutions

CANADIAN MORTGAGE PORTFOLIO: $227B (SPOT BALANCES AS AT Q4/19, $B)

% of portfolio 51.5% 18.6% 13.6% 7..2% 4.9% 4.2%

$1.9 $0.2 $0.7

Freehold - $195B Condos - $32B $116.6

$42.2

$30.8

$16.4 $11.1 $9.5

39%

61% Uninsured

Total Portfolio:

$227 billion

Insured

• Residential mortgage portfolio of $227 billion: 39% insured; LTV 55% on the uninsured book1

o Mortgage business model is “originate to hold”

o New originations2 in fiscal year 2019 had average LTV of 64.5%

o Majority is freehold properties; condominiums represent approximately 14.1% of the portfolio

• Three distinct distribution channels: all adjudicated under the same standards

o 1. Broker (~62%); 2. Branch (~18%); and 3. Mobile Salesforce (~20%)

o Our recently launched Scotiabank eHOME digital mortgage solution is emerging as our 4th distribution channel. Most recently, we launched the ability for Canadians to get pre-approved online with a credit decision and a pre-approval letter in just minutes – another first for the industry. We have also partnered with the Canadian Real Estate Association (CREA) to enable customers to search for a home directly within eHOME, making the entire home-buying journey digital

25

FICO is a registered trademark of Fair Isaac Corporation 1 FICO ® distribution for Canadian uninsured portfolio based on score ranges at origination 2 Percentage is based on Total Mortgages

Canadian Residential Mortgages: LTVs Credit fundamentals remain strong

4%

11% 12% 15%

58%

< 635 636 - 706 707 - 747 748 - 788 > 788

Q4/18 Q3/19 Q4/19

Canada

Total Originations ($B) 10.5 14.0 13.3

Uninsured LTV 63% 64% 65%

GTA



GVA



Average FICO® Score

Canada 788

GTA 790

GVA 794 • Only <0.77% of uninsured portfolio2 has

a FICO® score of <620 and an LTV >65%

• Canadian uninsured mortgage portfolio

is $139 billion as at Q4/2019

FICO® DISTRIBUTION – CANADIAN UNINSURED PORTFOLIO1

GTA 64%

ON 65%

QC 68%

Prairies 69%

GVA 64%

BC &

Territories 65%

Atlantic Provinces

67%

NEW ORIGINATIONS UNINSURED LTV* DISTRIBUTION

*Average LTV ratios for our uninsured residential mortgages originated during the quarter

26

Canadian Housing Market Return to equilibrium

Volume of Home Sales Near 10-Year Average*

*Seasonally adjusted *Actual – not seasonally adjusted

Canada’s Five Largest Metropolitan Areas*

*Actual – not seasonally adjusted

Significant Moderation in Price Growth*

0

5

10

15

20

25

Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18

High-ratio mortgages Low-ratio mortgages Total mortgages

Decline in Share of High-Risk Mortgages

% Share of new mortgages with a loan-to-income ratio greater than 450%

Sources: Scotiabank Economics, Bank of Canada Financial System Review 2019.

Mortgage insurance

rules tightened

B-20 guideline

revised

20

25

30

35

40

45

50

07 08 09 10 11 12 13 14 15 16 17 18 19Sources: Scotiabank Economics, CREA.

Units, 000s

10-year monthly moving avg.

Monthly home sales

-10

-5

0

5

10

15

20

25

06 07 08 09 10 11 12 13 14 15 16 17 18 19Sources: Scotiabank Economics, CREA.

Aggregate Composite MLS Home Price

Index Y/Y Percentage Change

-8

-6

-4

-2

0

2

4

6

8

10

GTA GVA Montreal Calgary Edmonton

Sources: Scotiabank Economics, CREA.

MLS Home Price Index Benchmark

Price Y/Y Percentage Change

5.82

-6.44

7.61

-2.27 -2.44

Average

0.46

27

Automotive Finance Canada’s leader in automotive finance

• Provide personal and commercial dealer financing solutions, in partnership with seven leading global automotive manufacturers in Canada

• Portfolio grew 4%1 year-over-year

o Personal up 5%, Commercial down 4%

1 For the three months ended October 31, 2019; 2 Data as at June 2019; 3 CBA data, includes BMO, CIBC, HSBC, National Bank, RBC, Scotiabank, TD; 4 DealerTrack Portal data, includes all Near-Prime Retail providers on DealerTrack Portal, data for October 19 originations; 5 Includes BMO, CIBC, RBC, Scotiabank, TD, HSBC, Canadian Western Bank, Laurentian Bank, data as of March 2019

39%

61%

Market Share2

24%

76%

28%

72%

Prime Retail Market Share3 Near-Prime Retail Market Share4 Commercial Floorplan Market Share5

Exclusive Relationships

Semi-Exclusive Relationships*

* 1 to 2 other financial institutions comprise Semi-Exclusive relationships

MAZDA VOLVO JAGUAR/LAND ROVER

HYUNDAI CHRYSLER TESLA GM 79%

8%

13%

AVERAGE ASSET MIX

$44.6B1

100% Secured

Commercial

Near-Prime Retail

Prime Retail

28

Award Winning

Approach No. 1 in Client Satisfaction:

ranked highest among mid-sized banks for 8th

year in a row by J.D. Power.

Speed & Agility

Rapid Labs: Agile best practices

enable quick & efficient new product & feature

delivery.

Client Driven Innovation

Incubator: Identify, explore, and pilot

new technologies & solutions to meet evolving

Client needs.

Modern Platform

Onboarding in < 7 minutes: 96% digital onboarding;

Scalable model, platforms and systems enabling constant innovation.

Partnership Focus

Power of Partnership: Strong partnerships with MLSE as the Official Bank

of the Raptors, SCENE, Cineplex and Scotiabank.

| Canada’s #1 Digital Bank

Leading Edge Brand Experience

STRATEGIC FOCUS:

• Enhanced customer experience through digital moments

• Best in class onboarding and security

• Focused on driving national brand awareness and new client acquisition as the Official Bank of the Raptors

• Deepening client relationships through introducing SCENE Loyalty program to Tangerine customers

• Focused product innovation to enhance client offering

• AI-driven approach to help Canadians achieve their financial goals

Customer Experience Leadership

Product Innovation

Strategic Partnerships

2.3 million

Clients

No.1 NPS

Industry Leading Client Experience

No.1 Credit Card

Ranked highest in Credit Card Satisfaction by J.D. Power

No.1 Mid-Sized Bank

Ranked No. 1 Mid-Sized Bank in Client Satisfaction by J.D. Power

29


International Banking

30

International Banking Leading P&C bank focused on high quality growth markets in Latin America and the Caribbean

• International Banking operates primarily in Latin America and the Caribbean with a full range of personal and commercial financial services. Core markets are the Pacific Alliance countries of Mexico, Peru, Chile and Colombia

STRATEGIC OUTLOOK

MEDIUM-TERM FINANCIAL OBJECTIVES

70% 24%

6%

REVENUE1

$3.4B

Asia

C&CA Latin America

25% Mexico

26% Peru

23% Chile 17%

Colombia

9% Other Latin

America

51%

27%

16%

6% LOAN MIX1

$153B Credit Cards

Personal Loans

Residential Mortgages

Business Loans

• Optimize Footprint: Continue executing with discipline announced acquisitions and divestitures to enhance the risk profile of our portfolio and improve quality of our earnings

• Lead in Customer Experience and Digital: Continue accelerating our digital transformation to amplify business impact and continue deploying digital solutions to other channels to optimize our distribution model

• Accelerate Growth Drivers: Leverage new strategic partnership to accelerate insurance growth, scale our Capital Markets business in the Pacific Alliance and build our Wealth business with focus in affluent customer segment

Target2 2019 3,4,5

Net Income Growth6 9%+ +12%


Operating Leverage Positive +4.3%

1 For the 3 months ended October 31, 2019; 2 3-5 year target; 3 Adjusted for Acquisition-related costs, including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions; 4 Y/Y growth rates (%) are on a constant $ basis; 5 For the twelve months ended October 31, 2019; 6 Attributable to equity holders of the Bank

91% PAC

31

The Bank of the Pacific Alliance (PAC)

1 10 million customers in PAC including affiliates

Only universal bank with full presence in all Pacific Alliance countries

Well-established bank with 30+ years of experience in the region

8 million1 Retail and ~30,000 Corporate & Commercial customers

>100 multi-national corporate customers within the Pacific Alliance

Pacific Alliance contributes ~80% of IB’s earnings

Competitive scale in each market

32

PAC Fundamentals Driving Growth

Strong Governance

Sound Macro Environment

Favourable Demographics

● Democratic countries with open economies

● Independent central banks with inflation targets

● Free trade agreements and free-floating currencies

● Business-friendly environments

● Diversified economies with strong GDP growth

● Resilience to economic and political cycles

● Investment Grade-rated

● Low Debt/GDP ratios with lower fiscal deficits compared to G7

● Increasing adoption of banking services

● 225 million people with median age of 30 years

● Strong domestic consumption

● Much lower banking penetration compared to Canada

● Among the fastest growing smartphone markets in the world

● Considerable growth in middle class

33

International Banking Positive operating leverage and strong balance sheet growth

$MM, except EPS1 Q4/19 Y/Y Q/Q Reported

Net Income2 $733 +1% (6%) Pre-Tax, Pre Provision Profit $1,579 +12% (3%)

Revenue $3,374 +10% 0%

Expenses $1,795 +7% 3%

PCLs $502 +27% +8% Productivity Ratio 53.2% (170 bps) +130 bps

Net Interest Margin3 4.43% (9 bps) (2 bps) PCL Ratio4 1.34% +29 bps +10 bps

PCL Ratio Impaired Loans4 1.26% +6 bps (10 bps)

Adjusted5

Net Income2 $781 +4% (4%) Pre-Tax, Pre Provision Profit $1,662 +14% (1%)

Expenses $1,712 +6% +1% PCLs $502 +27% +8%


YEAR-OVER-YEAR HIGHLIGHTS1

• Adjusted Net Income up 4%2,5 and Adjusted PTPP

up 14%5 on a constant currency basis

o Alignment of reporting period and the impact of closed divestitures reduced net income growth by 5%

o Strong growth across the Pacific Alliance, and strong positive operating leverage

o Lower tax benefits and last year’s credit recoveries in Puerto Rico and Latin America

• Revenues up 10%

o Good growth in Non interest income driven by higher investment gains and banking fees

• Loans up 8%

o Pacific Alliance up 10%

• NIM down 9 bps

o Primarily driven by margin compression in Mexico and Chile

o NIM down 2 bps Q/Q

• Expenses up 6%5

o Business volume growth and technology costs

o Productivity ratio improvement of 230 bps5

• Quarterly operating leverage of +4.8%5, full-year operating leverage +4.3%5

• PCL ratio on impaired loans4 increased 6 bps

4.52% 4.52% 4.58% 4.45% 4.43%

746 805 787 815 781

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

ADJUSTED NET INCOME2,5

($MM) AND NIM3 (%)

1 Y/Y and Q/Q growth rates (%) are on a constant dollars basis, while metrics and change in bps are on a reported basis 2 Attributable to equity holders of the Bank 3 Net Interest Margin is on a reported basis 4 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures 5 Adjusted for Acquisition-related costs, including integration and amortization costs related to current acquisitions, and amortization of intangibles related to current and past acquisitions

34

337 465

666 579

Scotiabank in Mexico

All figures in CAD$

Constant currency 1 Excludes affiliates & consumer microfinance 2 WY 2019 3 WY 2019 including goodwill 4 Source: CNBV 5 After NCI on an adjusted basis

22.8%

13.7% 13.1% 12.5%

7.7% 7.6%

4.8% 3.4%

2.0%

BBVA Banorte Santander Citi HSBC Scotiabank Inbursa Bajio Regio

2016 2017 2018

NIAT5

+19% CAGR

Footprint

Balance and Market Position

Financial Performance

~2.6 million

Customers1 Employees

12,995

Branches1

562

Average Loans Loan Market

Share Average Deposits

7.6% $31 billion

$26 billion

ROE3 Total NIAT2 Productivity2

$579 million

19.6% 55.4%

Productivity Ratio

2017 2018 2016 2019

63.0

%

58.6%

55.0% 55.4%

2019

Market Position by Loans4

Operating Leverage

2017 2018 2016 2019

1.5%

7.5% 6.9%

-0.9%

2019

35

572 604 688

810

Scotiabank in Peru

All figures in CAD$

Constant currency 1 Excludes affiliates & consumer microfinance 2 WY 2019 3 WY 2019 including goodwill 4 Scotiabank includes SBP, CSF and Caja CAT 5 After NCI on an adjusted basis


NIAT5

+12% CAGR

31.4%

19.7% 17.9% 14.0%

BCP BBVA Interbank

+147 -133 -110 +92

Scotia

Footprint



~2.6 million


12,016

Branches1

210



17.9% $21 billion

$20 billion

ROE2, 3 Total NIAT2 Productivity2

$759 million

25.6% 35.2%

Productivity Ratio

2017 2018 2016 2019

40.0%

39.3%

37.5%

35.2%

Operating Leverage

7.9%

1.8%

5.0%

6.8%

2017 2018 2016 2019

2016 2017 2018 2019

36

339 381 515

718

Scotiabank in Chile

All figures in CAD$

Constant currency 1 Includes affiliates & consumer microfinance 2 WY 2019 3 WY 2019 ROE including goodwill. ROE excluding goodwill was 13.4% 4 Local view. Source: CMF, Scotiabank 5 NIAT Before NCI

NIAT5

+28% CAGR

Footprint



~3.0 million


9,060

Branches1

158



14.3% $47 billion

$23 billion

ROE2, 3 Total NIAT2 Productivity2

$718 / $524 (Pre-NCI / Post-NCI)

million

8.7% 43.4%

Productivity Ratio

53.6%

49.5%

44.7% 43.4%


18.6 17.3

14.3 14.2 13.4

10.1

Santander Chile Estado BCI Itaú Scotiabank

Operating Leverage

2017 2018 2016 2019 2017 2018 2016 2019

-2.3%

8.5%

13.3%

4.3%

2016 2017 2018 2019

37

38 73 85

139

Scotiabank in Colombia

All figures in CAD$

Constant currency 1 Excludes affiliates & consumer microfinance 2 WY 2019 3 WY 2019 including goodwill 4 Members of AVAL Group: Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas. AVAL is 2nd in market share in terms of Loans (24.8%) and 1st in Deposits (26.5%) 5 After NCI on an adjusted basis

NIAT5

+53% CAGR

Footprint




9,218

Branches1

215



6.0% $12 billion

$10 billion

ROE3 Total NIAT2 Productivity2

$256 / $139 (Pre-NCI / Post-NCI)

million

8.4% 55%

Market Position by Loans

~2.3 million

26.0%

15.9%

12.1% 10.2%

6.0% 6.0% 4.4%

Bancolombia Scotiabank Colpatria

Davivienda Bogotá4 BBVA Occidente4 Corpbanca

Productivity Ratio

50.3% 52.6% 53.4%

54.5%

Operating Leverage

1.6%

-6.4%

-1.8% -2.4%

2017 2018 2016 2019 Q3 YTD

2017 2018 2016 2019

2016 2017 2018 2019

38

Other Regions Leading Caribbean & Central American franchise

Caribbean & Central America

• Longstanding, diversified franchise serving retail, commercial, and corporate customers

• Major markets include the Dominican Republic, Jamaica, Trinidad & Tobago, Costa Rica, Panama and The Bahamas

• Sharpened geographic footprint by exiting higher risk, low growth jurisdictions including Haiti, El Salvador, Puerto Rico and 7 of the Leeward Islands

Dominican Republic: #4 bank

• Acquired Banco Dominicano del Progreso in 2019

Asia

Thailand: 49% interest in Thanachart Bank • Announced definitive agreement to reduce investments in Thailand in Q3/19, resulting in Scotiabank owning

approximately 6% of a merged bank (among ING Groep, TBank and TMB)

China: 19.9% interest in Bank of Xi’an

• CAD $815MM carrying value as of October 31, 2019

• CAD $496MM of net income for twelve months ended October 31, 2019

39


Global Banking & Markets

40

Global Banking and Markets Second-largest Canadian wholesale banking and capital markets business

43%

43%

9%

5%

GEOGRAPHIC REVENUE1

$1.2B

• Full-service wholesale bank the Americas, with operations in 21 countries, serving clients across Canada, the United States, Latin America, Europe and Asia-Pacific

STRATEGIC OUTLOOK

Europe

Canada

US

Asia 36%

35%

12%

11%

6%

TRADING RELATED REVENUE (TEB)1,2

$523MM

Commod.

Interest Rate & Credit

Foreign Exchange

Equities

54%

29%

17% REVENUE BY BUSINESS LINE1

$1.2B

Business Banking

FICC

Global Equities

• Client Focus: Increase our relevance to our corporate clients and drive alignment of resources with the most significant revenue opportunities, to capture more of the non-lending wallet

• Strengthen our capital markets offering: Enhance distribution and product capabilities and deepen institutional relationships

• Build on our presence in the Americas: Enhance our franchise in Canada, continue to pursue targeted, phased growth in the U.S., create a top-tier local and cross-border Pacific Alliance business, and leverage Europe and Asia for distribution of our Americas product in support of our corporate clients

1 For the 3 months ended October 31, 2019; 2 All-Bank trading-related revenue

Other

41

Global Banking and Markets Strong loan and deposit growth. Capital markets strength in Fixed Income.


Reported

Net Income1 $405 (3%) +8%

Pre-Tax, Pre Provision Profit $539 +4% +10%

Revenue $1,170 +9% +8%

Expenses $631 +14% +6%

PCLs $4 N/A N/A

Productivity Ratio 54.0% +250 bps (70 bps)

Net Interest Margin 1.59% (13 bps) (2 bps)

PCL Ratio2 0.02% +11 bps +3 bps

PCL Ratio Impaired Loans2 0.05% +12 bps +6 bps


1 Attributable to equity holders of the Bank 2 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures

• Net Income down 3% Y/Y

• Revenue up 9%

o Non-interest income up 13%

• Loans up 13%

o Strong corporate loan growth across Canada and the U.S.

• Deposits up 23%

• Expenses up 14%

o Expenses up 6% Q/Q

o Compliance and technology investment for regulatory requirements and higher performance and share based compensation

• PCL ratio2 at 2 bps

416

335

420 374

405

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

NET INCOME1 AND ROE

15.3%

11.5%

15.2% 12.8% 13.8%

42

Risk Overview

43

93%

7%

Secured

Unsecured

64%

8% 7% 5%

5%

5%

4% 2%

Canada

Chile

U.S.

C&CA

Other International

Mexico

Peru

Colombia

0.4%

0.5%

0.5%

0.7%

0.8%

1.0%

1.1%

1.4%

1.6%

1.8%

2.2%

2.2%

2.3%

2.6%

2.7%

4.6%

5.3%

5.6%

Chemicals

Metals

Forest Products

Hospitality and Leisure

Sovereign

Health Care

Mining

Food and Beverage

Transportation

Utilities

Agriculture

Technology and Media

Automotive

Other

Energy

Wholesale and Retail

Real Estate and Construction

Financial Services

Risk Snapshot

1 % of total loans and acceptances as at October 31, 2019 2 Retail loans as at October 31, 2019

RWA Breakdown Credit Exposure by Country1 Credit Exposure by Sector1

Canadian Banking Loans2 International Banking Loans2

87% 11%

2%

Credit Risk

Operational Risk

Market Risk

67%

33%

Secured

Unsecured

$421B $611B1

$310B2 $74B2

44

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 (As a % of

Average Net Loans & Acceptances)

PCLs on Impaired

Loans

Total PCLs (adj.)

PCLs on Impaired

Loans

Total PCLs

PCLs on Impaired

Loans

Total PCLs

PCLs on Impaired

Loans

Total PCLs (adj.)

PCLs on Impaired

Loans

Total PCLs

Total Canadian Banking (%) 0.22 0.23 0.27 0.271 0.28 0.301 0.29 0.271 0.28 0.27

Total Canadian Banking ($MM) 188 198 229 233 233 252 256 240 255 247

Retail (%) 0.25 0.25 0.28 0.28 0.31 0.35 0.33 0.30 0.30 0.30

Retail ($MM) 181 179 201 202 220 245 242 218 226 227

Commercial (%) 0.06 0.15 0.21 0.231 0.09 0.061 0.10 0.161 0.20 0.14

Commercial ($MM) 7 19 28 31 13 7 14 22 29 20

Total International Banking (%) 1.20 1.051 1.23 1.281 1.29 1.301, 2 1.36 1.241 1.26 1.341

Total International Banking ($MM) 4662 4122 451 470 472 4773 522 476 477 502

Retail (%) 2.38 2.21 2.33 2.36 2.36 2.352 2.48 2.28 2.34 2.44

Retail ($MM) 412 384 416 421 421 4193 462 425 429 448

Commercial (%) 0.071 (0.06)1 0.19 0.261 0.27 0.301, 2 0.30 0.261 0.25 0.30

Commercial ($MM) 543 283 35 493 51 582, 3 60 513 48 543

Global Banking and Markets (%) (0.07) (0.09)1 (0.01) (0.07) (0.02) (0.02) (0.01) (0.01) 0.05 0.02

Global Banking and Markets $MM) (17) (20)3 (1) (16) (5) (6) (2) (4) 12 43

Other ($MM) - - - 1 - (1) - 1 - -3

All Bank (%) 0.42 0.391 0.47 0.471 0.49 0.511 0.52 0.481 0.49 0.501

All Bank ($MM) 637 590 679 688 700 722 776 713 744 753

1 Excludes provision for credit losses on debt securities and deposit with banks 2 On an adjusted basis; adjusted for Day 1 PCLs from acquisitions 3 Includes provision for credit losses on debt securities and deposit with banks of $nil in Canadian Banking (Q1/19: $2 million, Q2/19: -$1 million, Q3/19: -$1 million), -$3 million in International Banking (Q4/18: $41 million (impaired) and $40 million (total), Q1/19: $2 million, Q2/19: -$1 million, Q3/19: $1 million), -$1 million in Global Banking and Markets (Q4/18: $1 million) and $1 million in Other (Q1/19: -$1 million, Q2/19: $1 million)

Credit Performance by Business Lines

45

0.00%

0.50%

1.00%

1.50%

2.00%

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

PCL Ratio on Impaired Loans Historical Average - PCL Ratio on Impaired Loans (26 bps)

Historical PCL Ratios on Impaired Loans Credit fundamentals remain strong; PCLs on impaired loans in line with long-term average

1 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures

ALL BANK: HISTORICAL PCL RATIO ON IMPAIRED LOANS1

CANADIAN BANKING: HISTORICAL PCL RATIO ON IMPAIRED LOANS1

Average: 26 bps

0.00%

0.50%

1.00%

1.50%

2.00%

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

PCL Ratio on Impaired Loans Historical Average - PCL Ratio on Impaired Loans (44 bps)

2009: Higher PCLs driven by economic conditions, event distributed across business lines. Higher general allowance and sectoral allowance (automotive related)

Average: 44 bps

2002: Included $454 million related to the Bank’s exposure to Argentina

46

Canadian Retail: Loans and Provisions

1 95% are automotive loans 2 Includes Home Equity Lines of Credit and Unsecured Lines of Credit 3 Includes Tangerine balances of $6 billion 4 80% secured by real estate; 13% secured by automotive

MORTGAGES PERSONAL LOANS1

LINES OF CREDIT2 CREDIT CARDS

1 1 2 1 1 0 2 1 1 1

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

69 69

88 78 81

70 80

95 85 84

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

68 75 70

96

72 68

81 86

73 70

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

283

349

415

402

379

292

241

458

339

381

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

PCL as a % of avg. net loans (bps) PCLs on Impaired Loans as a % of avg. net loans (bps)

TOTAL RETAIL

25 28

31

33

30 25

28

35

30

30

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

Loan Balances Q4/19 Mortgages Personal Loans1 Lines of Credit2 Credit Cards Total

Spot ($B) $227 $41 $34 $8 $3103

% Secured 100% 99% 61% 3% 93%4

47

International Retail: Loans and Provisions

1 Adjusted for acquisition-related costs, including Day 1 PCL impact on acquired performing loans 2 Total includes other smaller portfolios

TOTAL RETAIL2 MEXICO

CHILE

PERU

206 199 218

208

163

216 233 231

203

246

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

Loan Balances Q4/19

Mexico Peru Chile Colombia C&CA Total2

Spot ($B) $13 $10 $25 $7 $18 $74

COLOMBIA

238

233

236 248

234 221

236

235 228

244

Q4/18 Q1/19 Q2/19 Q3/19 Q4/191

145

120 148 150 154

134

155 159 155 160

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

400

517

372

545 473

432

364

402 491

424

Q4/18 Q1/19 Q2/19 Q3/19 Q4/191

582 554 549 531 471

532 485 455

377 420

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

PCL as a % of avg. net loans (bps) PCLs on Impaired Loans as a % of avg. net loans (bps)

CARIBBEAN & CENTRAL AMERICA

147

138 156 138

165

101

170 157 141

187

Q4/18 Q1/19 Q2/19 Q3/19 Q4/191

48

1.0

6.7

0.4

0.7

2.8

1.2 3.7

Energy Exposure1 High quality energy portfolio, reduced exposure to 2.7% of total loans from 3.1% in Q4/16

• Energy portfolio represents 2.7% of loans and acceptances outstanding, down from 3.1% in Q4/16

• 56% is rated Investment Grade (IG), up from 52% in Q4/16

• Watchlist3 reduced to 4.0% of total Energy outstandings from 13.6% as of Q4/16

1 As of October 31, 2019

2 May not add due to rounding 3 Includes Impaired accounts

4 RWA based on All Facility Types

Energy Exposure by Geography2

$16.6B (%IG)

Mexico (60%)

Canada (60%)

Latin America

(50%)

U.S. (44%)

Asia (95%)

Europe (43%)

C&CA (33%)

Loans and

Acceptances Outstanding ($B)

% of Total

Energy Exposure

% of Total Loans and Acceptances Outstanding

% Investment Grade

Total Exploration and Production 7.1 43% 1.2% 62%

Canadian E&P 3.6 21% 0.6% 76%

Western Canadian Select Exposure 1.3 8% 0.2% 93%

U.S. E&P 1.2 7% 0.2% 57%

Midstream 5.6 34% 0.9% 51%

Services 1.6 9% 0.3% 21%

Downstream 2.4 14% 0.4% 69%

Total Energy Exposure2 16.6 100% 2.7% 56%

49

Treasury and Funding

50

1 In addition to the programs listed, there are also CD programs in the following currencies: Yankee/USD, EUR, GBP, AUD, HKD

Funding Strategy Flexible, well-balanced and diversified funding sources

• Build customer deposits in all of our key markets

• Continue to reduce wholesale funding (WSF) while focusing on TLAC eligible debt

• Achieve appropriate balance between efficiency and stability of funding including maintaining pricing relative to peers

• Diversify funding by type, currency, program, tenor and markets

• Centralized funding strategy and associated risk management

Funding Strategy Funding Programs1

US Debt & Equity Shelf (senior / subordinated debt, preferred and common shares) Limit – USD 40 billion

Global Registered Covered Bond Program (uninsured Canadian mortgages) Limit – CAD 38 billion

CAD Debt & Equity Shelf (senior / subordinated debt, preferred and common shares) Limit – CAD 15 billion

EMTN Shelf Limit – USD 20 billion

START ABS program (indirect auto loans)

Limit – CAD 15 billion

Australian MTN program Limit – AUD 8 billion

Singapore MTN program Limit – USD 7.5 billion

Halifax ABS shelf (unsecured lines of credit)


Principal at Risk (PAR) Note shelf Limit – CAD 6 billion

Trillium ABS shelf (credit cards)


USD Bank CP Program Limit – USD 35 billion

• SHORT-TERM FUNDING

o USD 25 billion Bank CP program

o CD Programs (Yankee/USD, EUR, GBP, AUD, HKD)

• TERM FUNDING & CAPITAL

Canadian Dollar

o CAD 38 billion Global Registered Covered Bond Program (uninsured Canadian mortgages)

o Canada Mortgage Bonds and Mortgage Backed Securities

o CAD 15 billion debt & equity shelf (senior / subordinated debt, preferred and common shares)

o CAD 15 billion START ABS program (indirect auto loans)

o CAD 7 billion Halifax ABS shelf (unsecured lines of credit)

o CAD 6 billion Principal at Risk (PAR) Note shelf

o CAD 5 billion Trillium ABS shelf (credit cards)

Foreign Currency

o USD 40 billion debt & equity shelf (senior / subordinated debt, preferred and common shares)

o USD 20 billion EMTN shelf

o AUD 8 billion Australian MTN program

o USD 7.5 billion Singapore MTN program

51

Wholesale Funding Wholesale funding diversity by instrument and maturity1,6,7

$249B

1 Excludes repo transactions and bankers acceptances, which are disclosed in the contractual maturities table in the MD&A of the Interim Consolidated Financial Statements. Amounts are based on remaining term to maturity. 2 Only includes commercial bank deposits raised by Group Treasury. 3 Excludes asset-backed commercial paper (ABCP) issued by certain ABCP conduits that are not consolidated for financial reporting purposes. 4 Represents residential mortgages funded through Canadian Federal Government agency sponsored programs. Funding accessed through such programs does not impact the funding capacity of the Bank in its own name. 5 Although subordinated debentures are a component of regulatory capital, they are included in this table in accordance with EDTF recommended disclosures. 6 As per Wholesale Funding Sources Table in MD&A, as of Q4/19. 7 May not add to 100% due to rounding.

38%

10% Mortgage

Securitization4

Bearer Deposit Notes, Commercial Paper &

Short-Term Certificate of Deposits

2%

Asset-Backed Commercial Paper3

27% Senior Notes

10% Covered Bonds

4% Subordinated

Debt5

$16 $15 $15

$10

$7

$15

$2

$4

$9

$4

$5

$2

$2

< 1 Year 2 Years 3 Years 4 Years 5 Years 5 Years >

MATURITY TABLE (EX-SUB DEBT)

(CANADIAN DOLLAR EQUIVALENT, $B)

Senior Debt ABS Covered Bonds

$22

$27

$19

$15

$9

$17

$3

4% Bail-inable Notes

3% Asset-Backed

Securities

2% Deposits from Banks2

52

$155

$156

$169

$172

$174

$170

$168

$179

$197

$197

$211

$221

$223

Q4

/16

Q1/

17

Q2

/17

Q3

/17

Q4

/17

Q1/

18

Q2

/18

Q3

/18

Q4

/18

Q1/

19

Q2

/19

Q3

/19

Q4

/19

Deposit Overview Stable trend in personal & business and government deposits

PERSONAL DEPOSITS (SPOT, CANADIAN DOLLAR EQUIVALENT, $B)

PERSONAL DEPOSITS

$199

$199

$202

$198

$200

$201

$204 $211

$215 $222

$225

$223

$225

Q4

/16

Q1/

17

Q2

/17

Q3

/17

Q4

/17

Q1/

18

Q2

/18

Q3

/18

Q4

/18

Q1/

19

Q2

/19

Q3

/19

Q4

/19

• Important for both relationship purposes and regulatory value

• Good momentum with 4.1% CAGR over the last 3 years

BUSINESS & GOVERNMENT DEPOSITS1

(SPOT, CANADIAN DOLLAR EQUIVALENT, $B)

1 Calculated as Bus& Gov’t deposits less Wholesale Funding, adjusted for Sub Debt

BUSINESS & GOVERNMENT

• Gaining share of deposits through leveraging of relationships

• 12.8% CAGR over the last 3 years

• Focusing on operational, regulatory friendly deposits

3Y CAGR – 4.1%

3Y CAGR – 12.8%

53

Wholesale Funding Utilization Managing reliance on wholesale funding and growing deposits

WHOLESALE FUNDING / TOTAL ASSETS REDUCED RELIANCE ON WHOLESALE FUNDING

• Operating in line with peers o Reduced reliance on wholesale funding

o Sustained focus on deposits as an alternate to wholesale funding

MONEY MARKET WHOLESALE FUNDING / TOTAL WHOLESALE FUNDING

FOCUS ON TERM FUNDING

• Prudently using money market funding to absorb short term funding requirements

37.7% 36.8% 36.0%

42.2%

Q4

/16

Q1/

17

Q2

/17

Q3

/17

Q4

/17

Q1/

18

Q2

/18

Q3

/18

Q4

/18

Q1/

19

Q2

/19

Q3

/19

Q4

/19

25.2%

23.8% 23.4% 22.9%

Q4

/16

Q1/

17

Q2

/17

Q3

/17

Q4

/17

Q1/

18

Q2

/18

Q3

/18

Q4

/18

Q1/

19

Q2

/19

Q3

/19

Q4

/19

54

Liquidity Metrics Well funded Bank with strong liquidity

• Liquidity Coverage Ratio (LCR) o Stable and sound management of liquidity

o Net Stable Funding Ratio (NSFR) disclosure to commence Q1/20

125% 125%

128% 127%

125% 124%

128%

125%

123%

125%

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

• High Quality Liquid Assets (HQLA)

o Efficiently managing LCR and optimizing HQLA

$128 $127 $132 $140 $138

$144 $158 $158 $160 $165

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

Key Market Profiles

Appendix 1

56

Canadian Economy Diverse economy with a strong balance sheet

0

1

2

3

U.S. Canada Eurozone U.K. Japan

1.1

(0.8) (0.7) (1.4)

(2.0)

(3.0) (3.3)

(5.6)

-6

-5

-4

-3

-2

-1

0

1

2

Germany OECD* Canada U.K. Italy Japan France U.S.

AN

NU

AL

% C

HA

NG

E

% O

F G

DP

22.9 31.7

66.1 78.5 80.1 84.5

122.0 126.1

Canada Germany OECD France U.K. U.S. Italy Japan

Sources: Scotiabank Economics, Haver Analytics, Statistics Canada. Forecasts as of October 10, 2019.

GENERAL GOVERNMENT NET FINANCIAL LIABILITIES

% O

F G

DP

REAL GDP GROWTH

2000–2018 2019f–2021f

GOVERNMENT FINANCIAL DEFICITS

CANADIAN GDP BY INDUSTRY

(AUG 2019) 4.5%

12.4% 19.5%

7.6%

7.0% 6.7%

5.9%

15.6% 10.4%

10.3%

Finance, Insurance, & Real Estate

Health & Education

Wholesale & Retail Trade

Manufacturing

Mining and Oil & Gas Extraction

Construction Public Administration

Professional, Scientific,

& Technical Services

Transportation & Warehousing

Other

* Arithmetic mean of all OECD financial deficits as a % of GDP. Sources: Scotiabank Economics, IMF (2019 estimates). As of November 2019.

Sources: Scotiabank Economics, OECD (2019 estimates). As of November 2019.

57

Canada: Stable Economic Fundamentals Low unemployment rate reflects solid growth in Canadian economy

60

62

64

66

68

70

90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

UNEMPLOYMENT RATE • Solid economic growth and a gradual rebound in non-energy exports

• Household spending remains buoyant, underpinned by relatively low and stable unemployment, as well as low borrowing costs

• Population and labour-force growth supported by increasing immigration

• Moderate inflation within Bank of Canada target band

HEADLINE INFLATION

0

2

4

6

8

10

12

14

90 92 94 96 98 00 02 04 06 08 10 12 15 17 19

%

U.S.

Canada – official

Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2019.

-2

0

2

4

6

00 02 04 06 08 10 12 14 16 18

Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2019 (Canada) and October 2019 (US).

LABOUR FORCE PARTICIPATION RATE

Sources: Scotiabank Economics, Statistics Canada, BLS. Data through October 2019.

U.S.

Canada Bank of Canada Target Inflation Band

y/y

% c

ha

ng

e

%

U.S.

Canada

Canada – comparable

to U.S.

58

Mexican Economy Diverse economy with a strong balance sheet

Top 5 Trading Partners

MEXICAN GDP BY INDUSTRY

(Q2 2019)

6.6%

16.0%

6.0%

6.7% 3.8%

1.9%

16.3%

17.7%

16.0%


Health & Education

Wholesale & Retail Trade

Manufacturing


Construction

Public Administration




Other

3.2% Natural

Resources

• The Mexican economy reflects a solid mix of commodities, goods production, and services

• Trade remains dominated by the U.S., but Mexico’s diversification agenda is underpinned by 13 free-trade agreements with 47 countries that account for 40% of global GDP

United States

59%

Others 20%

Germany 3%

Japan 3%

Canada 4%

China 11%

5.8%

-5

-4

-3

-2

-1

0

1

2

3

4

5

16 17 18 19

Other*Net ExportsInventoriesInvestmentGovernmentConsumptionReal GDP

Contributions to Mexican GDP Growthy/y % change

*Statistical discrepancy, subject to revision.

Sources: Scotiabank Economics, Haver Analytics.

59

Peruvian Economy Resilient economic fundamentals

PERUVIAN GDP BY INDUSTRY

(Q2 2019)

10.2%

14.1% 31.9%

20.8%

5.5%


Transportation, Information &

Commerce

Construction

Mining & Energy Other

12.3% Manufacturing

5.1% Natural

Resources


United States

18%

Others 43%

Brazil 5%

Spain 4%

South Korea 4%

China 27%

• Peru’s important resource sectors are increasingly balanced by stronger service-sector activity and solid economic fundamentals

• Peru has 16 free-trade agreements with 49 countries that account for 66% of global GDP

• Investment is making a consistently strong contribution to GDP, which should make solid growth rates more sustainable in the future

-6

-4

-2

0

2

4

6

8

16 17 18 19

Net ExportsInventoriesInvestmentGovernmentConsumptionReal GDP

Contributions to Peruvian GDP Growth

y/y % change


60

Chilean Economy Advanced economy with wide-ranging trade links

CHILEAN GDP BY INDUSTRY (Sep 2019) 2.0%

9.3% 15.3%

6.3%

4.5% 19.4%

8.6%

8.6% 10.2%

12.4%

Finance, Insurance, & Real Estate Wholesale & Retail Trade

Manufacturing


Construction

Public Administration Housing & Personal

Services


Restaurants & Hotels

Other

3.4% Natural Resources


United States

16%

Others 38%

Brazil 7%

Japan 6%

South Korea 4%

China 29%

• Chile’s mix of economic activities reflects its status as an advanced market economy

• Chile’s diversified trading relationships are supported by 23 free-trade agreements with 60 countries that account for 73% of global GDP

• Investment has been a strong contributor to growth in Chile over the past year, which should underpin future productivity gains

-6

-4

-2

0

2

4

6

8

16 17 18 19

Net ExportsInventoriesInvestmentGovernmentConsumptionReal GDP

Contributions to Chilean GDP Growth

y/y % change


61

Colombian Economy Gaining momentum

COLOMBIAN GDP BY

INDUSTRY (Q3 2019)

6.2%

17.6% 13.6%

6.6%

14.8%

6.9% 2.8%

9.1% 11.9%

8.1%


Wholesale, Retail Trade, Accommodation & Food Services

Manufacturing

Construction


Public Administration



Information & Communication

Natural Resources

Other

2.4% Arts &

Entertainment


Ecuador 3%

United States

28% Others

42%

Brazil 5%

Mexico 6%

China

17%

• Services account for a rising share of Colombian GDP compared with traditional strengths in extractive industries

• Colombia continues to build on its 11 free-trade agreements with 46 countries that account for 41% of global GDP

• Rising consumption, supported by public spending, reflects an expanding middle class as growth gains momentum and converges toward the economy’s underlying potential

-6

-4

-2

0

2

4

6

8

16 17 18 19

Other*Net ExportsInvestmentGovernmentConsumptionReal GDP

Contributions to Colombian GDP Growth

y/y % change

*Statistical discrepancy, subject to revision.


Canadian Housing Market

Appendix 2

63

Housing Market Differences vs U.S. Canada’s housing market features distinct practices and policies

Canada U.S.

Regulation and Taxation

• Mortgage interest not tax deductible • Full recourse against borrowers in most provinces • Foreclosure on non-performing mortgages, no stay periods

Insurance

• Mandatory default insurance mortgages with LTV > 80% o CMHC backed by Government of Canada (AAA). Private insurers

are 90% government backed o Insurance available for homes up to CAD 1 mn o Premium is payable upfront o Covers full amount for life of mortgage

• Homebuyers must qualify for mortgage insurance at an interest rate that is the greater of their contract mortgage rate or the Bank of Canada's conventional five-year fixed posted rate

• Re-financing cap of 80% LTV on non-insured mortgages

Amortization

• Maximum 25-year amortization on mortgages with LTV > 80% • Maximum 30-year amortization on conventional mortgages • Down payment of > 20% required for non-owner

occupied properties

• Tax-deductible mortgage interest creates incentive to borrow and delay repayment

• Lenders have limited recourse in most states

• 90-day to 1-year stay period to foreclose on non-performing mortgages

• No regulatory LTV limit • Private insurers are not

government backed

Product

• Conservative product offerings, fixed or variable rate options • Much less reliance upon securitization and wholesale funding • Asset-backed securities not subjected to US-style off-balance sheet

leverage via special purpose vehicles

• Can include exotic products (e.g. adjustable rate mortgages, interest only)

Underwriting

• Terms usually three or five years, renewable at maturity • Extensive documentation and strong standards

• 30-year term most common • Wide range of documentation

and underwriting requirements

64 0

20

40

60

80

100

120

140

10 11 12 13 14 15 16 17 18 19

Actual

10-year avg.

home sales, 000s of units

annualized, SA Greater Toronto

Greater Vancouver

Canadian Housing Market From a “soft landing” to a “gentle rebound”

• Canada: The effects of recent adjustments to federal and provincial policy measures that slowed the market look to be waning:

o Prior to flat national-level sales in October 2019, home purchases had risen in seven consecutive months—the first time since 20091

o Average sales prices and the composite MLS Home Price Index2 are trending higher (top chart)

o Sales-to-new listings ratio reached to 63.7% in October 2019, a rate just shy of sellers’ market territory

• Greater Toronto: Sales have increased in six of the past eight months, rising 23% over that period. The market is in broadly balanced territory, but this is the tightest it has been since early 2017

• Greater Vancouver: Sales have climbed six times in the last seven months, gained almost 80% since their trough in March 2019, and regained nearly half of the 66% drop from their February 2016 peak

Toronto & Vancouver Home Sales1,3

1 Sales and listings figures reported in seasonally-adjusted m/m terms, while MLS HPI growth rates reported as non-seasonally-adjusted y/y. 2 Measure of real estate price appreciation that removes distortions related to variations in the mix of sales across unit types. 3 Sources for charts and table: Scotiabank Economics, CREA.

Price Growth by Dwelling Type1,3

-5

0

5

10

15

20

16 17 18 19

Single FamilyTownhouseApartmentComposite

MLS Home Price

Index, aggregate,

y/y % change

Canada1,3 Sept-19 Oct-19 Oct-19

m/m* m/m* y/y**

Sales (% change) 1.3 0.0 12.9

New listings (% change) -1.8 -1.8 -5.8

Average price (% change) 1.1 0.1 5.2

Sept-19 Oct-19

Sales-to-new listings ratio (level)* 62.6 63.7

Months inventory (level)* 4.5 4.4

*Seasonally adjusted **Not seasonally adjusted

65

-5

0

5

10

15

20

25

00 02 04 06 08 10 12 14 16 18

%, 3-month moving average

y/y %

change

Sources: Scotiabank Economics, Bank of Canada.

m/m %

change,

SA

-5

0

5

10

15

20

25

00 02 04 06 08 10 12 14 16 18


y/y %

change


m/m %

change,

SA

Canadian Household Credit Public policy changes have moderated growth in household credit

• Total household credit grew at 3.7% annually in nominal terms in Q3/19 vs 2008 peak of 12.2% annually

• Consumer loans excluding mortgages (cards, HELOCs, unsecured lines, auto loans, etc.) grew at 3.1% annually in Q3/19 vs > 5% in late 2017

• Mortgage credit grew at 4.0% annually in Q3/19 vs 2008 peak of 13%

HOUSEHOLD CREDIT GROWTH CONSUMER LOAN GROWTH RESIDENTIAL MORTGAGE GROWTH

-5

0

5

10

15

20

25

00 02 04 06 08 10 12 14 16 18


m/m %

change, SA


y/y %

change

66

Household Debt: Canada vs U.S. Canadian households’ balance sheets compare favourably to U.S.

• Canadian headline debt-to-income ratio is now ~ -3% vs the U.S. peak in 2008

o Calculated on the same terms, Canada’s debt-to-income is currently 166% vs 132% in the U.S.

• Canadian debt-to-asset ratio remains below U.S.

o U.S. households have incentive to pursue higher asset leverage in light of mortgage-interest deductibility

• Ratio of total household debt-to-GDP remains lower in Canada than U.S.

o Calculated on a comparable basis, the ratio of household credit market debt is 98.8% in Canada vs 101.0% in the U.S.

Household Credit-Market Debt to Disposable Income

Total Household Liabilities as % of Total Assets

Household Credit-Market Debt to GDP

165.8

174.0

131.5

90

100

110

120

130

140

150

160

170

180

00 02 04 06 08 10 12 14 16 18

Adjusted Canadian*

Official Canadian

Official U.S.

* Adjusted for U.S. concepts and definitions.

Sources: Scotiabank Economics, BEA, Federal

Reserve Board, Statistics Canada.

household credit liabilities

as % of disposable income

17.0

17.9

10

15

20

25

30

00 02 04 06 08 10 12 14 16 18

U.S.

Canada

household debt

as % of assets

Sources: Scotiabank Economics, Federal


101.0

98.8

103.6

73.9

50

60

70

80

90

100

110

120

130

00 02 04 06 08 10 12 14 16 18

% of GDP

* Adjusted for U.S. concepts and definitions.

Sources: Scotiabank Economics, BEA, Federal


Canada*

U.S. with

unincorporated

business debt

Original

U.S.

Original

Canada

67

Housing Policy Developments in Canada Consistent policy initiatives to maintain a balanced and sustainable market

2018

• Canada: OSFI imposes more stringent stress tests for uninsured mortgages, including a minimum qualifying rate at the greater of the five-year fixed posted rate or the contractual rate plus 200 bps, effective January 1, 2018

• Ontario: Elimination of rent control on new rental units first occupied on or before November 1, 2018

• British Columbia: Extension of the Property Transfer Tax on non-resident buyers. Investment of more than CAD 1.6 bn through FY2021 toward the goal of building 114,000 affordable housing units in the next 10 years

2017

• Ontario: 16 measures aimed to slow rate of house price appreciation

Key aspects include:

o 15% non-resident speculation tax

o Expanded rent control to all private rental units in Ontario

o Vacant home tax

o CAD 125 mn five-year program to encourage construction of new rental apartment buildings

2016

• Canada: Qualifying stress rate for all new mortgage insurance must be the greater of the contract mortgage rate or the Bank of Canada's conventional five-year fixed posted rate

• Low-ratio mortgage insurance eligibility requirements updated for lenders wishing to use portfolio insurance:

o Maximum amortization 25 years

o CAD 1 mn max. purchase price

o Minimum credit score of 600

o Owner-occupied property

• Elimination of primary residence tax exemption for foreign buyers

• Min. down payment on insured increased from 5% to 10% (for homes CAD 0.5‒1.0 mn)

• British Columbia: 15% land transfer tax on non-resident purchases in Metro Vancouver introduced

2019

• British Columbia: Increase in speculation tax on foreign and domestic home owners who do not pay income tax in BC from 0.5% of a property’s assessed value to 2%; additional school tax levied on portion of a property’s value that exceeds CAD 3 mn

• Ontario: Measures to increase supply of available housing

Key aspects include:

o Greater authority over land use planning decisions for the province’s independent municipal dispute resolution body

o Reduced red tape on new residential developments

o Updated zoning regulations to facilitate building of affordable homes near transit

Additional Information

Appendix 3

69

Medium-Term Financial Objectives1

METRICS OBJECTIVES 2019 RESULTS2

(Change FY/FY)

ALL BANK

EPS Growth 7%+ +0.4%

ROE 14%+ 13.9%

Operating Leverage3 Positive (0.6%)

Capital Strong Levels 11.1% (11.55% pro-forma)

Dividend Payout Ratio 40%-50% 48.6%

BUSINESS LINE

CANADIAN BANKING

Net Income Growth >7% +1.6%


INTERNATIONAL BANKING

Net Income Growth4 >9% +12.0%


1 3-5 year objectives; 2 Adjusted for Acquisition and divestiture-related amounts, including Day 1 PCL on acquired performing loans, integration and amortization costs related to current acquisitions, amortization of intangibles related to current and past acquisitions and losses/(gains) on divestitures and related cost; 3 Excludes the pension revaluation benefit gain of $203MM pre-tax, $150MM after-tax in Q1/18; 4 On a constant dollar basis

70

Additional Information

• Toronto Stock Exchange (TSX: BNS) • New York Stock Exchange (NYSE: BNS)

Moody's Investors Services

Standard & Poor's Fitch Ratings Dominion Bond Rating Service

Ltd.

Legacy Senior Debt1 Aa2 A+ AA- AA

Senior Debt2 A2 A- AA- AA (low)

Subordinated Debt (NVCC) Baa1 BBB+ - A (low)

Short Term Deposits/Commercial Paper P-1 A-1 F1+ R-1 (high)

Covered Bond Program Aaa Not Rated AAA AAA

Outlook Stable Stable Stable Stable

Scotiabank Credit Ratings

• CUSIP: 064149107 • ISIN: CA0641491075 • FIGI: BBG000BXSXH3 • NAICS: 522110

Scotiabank Listings: Scotiabank Common Share Issue Information:

1 Includes: (a) Senior debt issued prior to September 23, 2018; and (b) Senior debt issued on or after September 23, 2018 which is excluded from the bank recapitalization "bail-in" regime 2 Subject to conversion under the bank recapitalization "bail-in" regime

71

Contact Information

Investor Relations

Philip Smith Senior Vice President

416-863-2866

[email protected]

Lemar Persaud Director

416-866-6124

[email protected]

Funding

Mark Michalski Director, Strategy & Market Development,

Funding

416-866-6905

[email protected]

Judy Lai Director

416-775-0485

[email protected]

Steven Hung Vice President

416-933-8774

[email protected]

Christy Bunker SVP, CB Treasury, Term Funding

and Capital management

416-933-7974

[email protected]

Tiffany Sun Manager

416-866-2870

[email protected]

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