Building Sustainable Growth Rob Pitfield EVP International Banking
3 AGENDA Tuesday, October 16th, 2007 1:00 Overview Luc Vanneste 1:10 Building Sustainable Growth Rob Pitfield 1:30 Solid Base for Growth Brad Rowse 1:50 Driving Retail Growth Claude Norfolk 2:10 Bahamas: Growing in a Mature Market Minna Israel 2:30 Q&A 3:10 Acquisition Strategy Tim Hayward 3:30 Costa Rica: A Successful Acquisition Luis Liberman 3:50 Asia / Pacific: Investing for Growth Michele Kwok 4:10 Managing International Risk Brian Porter 4:30 Managing Retail Credit Risk Nolan Miller 4:50 Q&A 2:50 Coffee Break 5:10 Close of Day 1 Rob Pitfield
International Banking Opportunity 1 Great markets 2 Focused strategy 3 Strong people and organization Driving Sustainable Growth 4
5 Agenda International today Strong track record Segment strategies New areas of focus
6 Three Geographic Regions Caribbean & Central America Latin America Asia/Pacific 40 Countries 1,155 branches 2,318 ABMs 24,000 Employees
7 Dominant Position in the Caribbean 6,800 employees 240 branches & offices Bahamas 555 ABMs Turks & Caicos Belize Cayman Jamaica Haiti Dominican Republic Puerto Rico USVI BVI St. Kitts Netherlands Antilles St. Vincent Grenada Anguilla St. Maarten Antigua Dominica St. Lucia Barbados Trinidad & Tobago Guyana
8 Investing in Latin America Mexico Honduras Guatemala Nicaragua El Salvador Costa Rica Panama Venezuela 16,600 employees 863 branches and offices 1,763 ABMs Peru Brazil Subsidiaries Chile Affiliate Branches and Offices
9 and Building our Presence in Asia 600 employees 27 branches and offices Korea China Japan India Hong Kong Taiwan Affiliate Branches and Offices Thailand Vietnam Malaysia Singapore
10 The Majority of Our Customers Speak Spanish 5.2 Million Customers Chile 3% Spanish C&CA 6% Mexico 32% English Caribbean 31% Spanish English Peru 21% El Salvador 7% 3.6 million Spanish-speaking customers
11 and are Under 40 Years Old 5.2 Million Customers 1433M (27%) 1039M (20%) 1072M (21%) 707M (14%) 670M (13%) 251M (5%) <18 19-29 30-39 40-49 50-59 60+
12 Agenda International today Strong track record Segment strategies New areas of focus
13 Increasing Size and Scale Employees Branches +55% +49% 24,000 1,155 15,460 773 2004 2007 ABMs 2004 2007 Customers 1,660 +40% 2,318 3M +73% 5.2M 2004 2007 2004 2007
High Employee Satisfaction and Customer Loyalty 14 Employment Satisfaction Index Customer Loyalty 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 2004 2005 2006 2007 0% 2004 2005 2006 2007
15 Strong Earnings Growth Net Income ($ Million) 21% CAGR $1,054 $718 $800 2004 2005 2006
International Recognition 16
17 Agenda International today Strong track record Segment strategies New areas of focus
18 Entering New Market Segments Traditional New Business Personal Business Personal Corporate Corporate Affluent Commercial Mid Market Commercial Mid Market Small Business Consumer Finance Access to millions of new prospective customers
New Segment: Affluent 19 Scotia Private Client Group Products (Onshore and Offshore) Trust Private banking Discretionary management Brokerage Insurance Mutual Funds Leverage Caribbean and Latin American footprint
Traditional Strength in Mid Market Retail Segment Sales and Service Model Create Sales Training and Capacity Tools Coaching Sales Discipline Process improvement Mid-office Call re-direct Automation Counselor Step one planner Data warehouse development Selling skills Proactive calling Service quality Making quality referrals Activity management Planning Sales management Focus Shared Services Coaching Leverage 2,900 Personal Banking Officers 20
21 Solid Corporate & Commercial Platform Reorganized and focused Commercial Centres Collaboration with Scotia Capital and Global Transaction Banking New MIS Well defined metrics
New Segment: Consumer Finance (million) Country Population Estimated Consumer Finance Segment Mexico Peru Chile 100 52 28 12 15 4 In Peru, 10% of retail assets generate 20% of retail lending income 22
New Segment: Small Business 23 Small Business as % of GDP Canada Mexico Chile Peru 22% 50-60% 42% 50%
24 Agenda International today Strong track record Segment strategies New areas of focus
Unique Value Proposition for each Segment Traditional New Highly successful in Mid-Market Clear value propositions Aligned customer experience Satisfy customer needs Actionable segments each represent opportunity 25
26 Supporting a Customer Focus Delivering Customer Value 1 Delivery / Channels 2 3 4 5 Product Solutions Advertising & Brand Operational Support Risk Management Specific to each segment 6 Organization & People
1 Delivery / Channels Core Competency Increasing Our Focus Expertise in branchbased Sales & Service Growing branch network Expanding external sales force Upgrading Internet Driving contact centre activities Expanding all customer touchpoints 27
2 Product Solutions Core Competency Increasing Our Focus Proven ability to lend successfully Capturing day-to-day deposit business Driving credit card business Expanding offshore to new markets Launching new mutual funds Introducing segment specific solutions 28
3 Advertising & Brand Core Competency Increasing Our Focus Single, strong brand Refreshing brand to broaden appeal Identifying co-branding opportunities Forming alliances with retailers Utilizing segment brands Única Aligning marketing to segments 29
4 Operational Support Core Competency Increasing Our Focus Established, robust banking platforms Decentralized operations Standardizing systems: Core banking Sales management Customer information Providing network-wide solutions Data centres Shared Services Upgrading MIS Upgrading our systems and processes 30
31 5 Risk Management Core Competency Increasing Our Focus Strong risk culture Market leading risk performance Credit risk management - Standardize structure, process and systems - Advanced data management Operational risk Compliance
32 Acquisitions: Broadening Our Focus Core Competency Increasing Our Focus Track record of strengthening existing P&C franchises: El Salvador Dominican Republic Costa Rica Peru Chile Integrations Consumer finance and pension management Investing for future growth: Thailand Puerto Rico China
6 Organization & People Core Competency Increasing Our Focus Strong local management Focus on economies of scale Collaborating across the network Creating hubs of expertise Welcoming new talent Leveraging leadership and network as a competitive advantage 33
International Banking Opportunity 1 Great markets 2 Focused strategy 3 Strong people and organization Driving Sustainable Growth 34