2014 Annual Report

What it means to be

Canadas mostinternational bank

Financial Highlights1

Operating results($ millions)Net income

Operating performance

Diluted earnings per share ($)

Return on equity (%)(2)

Productivity ratio (%) (TEB(2))

Balance sheet information($ millions)

Total assets

Capital measures(1)(3)

Common Equity Tier 1 (CET1) ratio (%)

Total capital ratio (%)

Common share information

Annual shareholder return (%)

10-year compound annual return (%)

Market capitalization ($ millions) (TSX)

Dividends per share ($)

Dividend yield (%)(4)

Book value per common share ($)Price to earnings multiple

2014

7,298

5.66

16.1

52.6

805,666

10.8

13.9

13.2

9.9

83,969

2.56

3.8

36.9612.1

6,610

5.11

16.6

54.0

743,644

9.1

13.5

21.7

10.9

76,612

2.39

4.1

33.2312.3

2013

n/a

4.2

2012

6,390

5.18

19.9

52.4

668,225

16.7

7.6

13.0

64,252

2.19

28.9910.3

As at and for the fiscal years ended October 31(1) (1)

(1) Certain prior period amounts are retrospectively adjusted to reflect the adoption of new and amended IFRS standards (IFRS10 and IAS19) in 2014 (refer to Note 4 in the consolidated financial statements). Capital measures have not been restated for the new and amended IFRS standards as they represent the actual amounts in the period for regulatory purposes.

(2) Non-GAAP measures. Refer to non-GAAP measures on page 17.

(3) Effective November 1, 2012, regulatory capital ratios are determined in accordance with Basel III rules on an all-in basis (Refer to page 41). Comparative amounts for prior periods were determined in accordance with Basel II rules and have not been restated.

(4) Based on the average of the high and low common share price for the year.

2011

n/a

3.7

5,330

4.53

20.3

53.9

594,423

13.9

(0.4)

57,204

13.1

2.05

24.2011.3

Contents

2 Message from Chairman of the BoardThomas C. ONeill

3 Message from President andChief Executive Officer Brian Porter

8 Executive Management Team

10 Board of Directors

12 Message from Chief Financial OfficerSean McGuckin

13 Reasons to Invest in Scotiabank MD&A at a Glance

14 Managements Discussion and Analysis

117 Consolidated Financial Statements

Getting Kids in the Game(see inside back cover)

Mexico-based Divemex has been a Scotiabank customer for about 14 years. The family-owned company produces organic,conventional, green and mini peppers for the North Americanmarket and is renowned for bringing fair trade certificationto Mexicos horticulture industry.

Read more and watch the video at media.scotiabank.com/AR/2014/en.

Shown here: Jorge Beckmann, President, Divemex (centre) with Scotiabankers JoaquinGandara (right) and Jorge Cuenca (left) at one of the companys greenhouses in Jalisco, Mexico.

customers in over 55 countriesScotiabank serves more than 21 million

Alternative formats Annual Report Online

Go online for a more detailed version of this report, including customer videos.

media.scotiabank.com/AR/2014/en

For information on how to obtain the annual report in alternative formats,please go to:

http://www.scotiabank.com/ca/en/0,,379,00.html

Message fromthe Chairman2

Thomas ONeill

Chairman of ScotiabanksBoard of Directors

Dear Fellow Shareholders,

We continued to work hard in 2014 to achieve solid results for you. Thisyear, under Brian Porters leadership, the Bank increased its focus oncustomers, leadership and talent, and being better organized to servecustomers while reducing structural costs. These are areas we know drivestronger growth and have the greatest impact on shareholder value.

Scotiabanks proven strategy well executed by astrong management team and more than 86,000employees contributed to consistent earningsgrowth for all shareholders.

GUIDED BY GOVERNANCE

Effective corporate governance is an importantfoundation for Scotiabanks strong performanceand is fundamental to our success. Corporategovernance provides proper oversight andaccountability, strengthens internal and externalrelationships, builds trust with our stakeholders andpromotes the long-term interests of shareholders.

In 2014, your Board expanded its commitmentto diversity. In fact, female directors nowrepresent more than 30% of the Board, areflection of our policy that also considers theage, ethnicity and geographical background ofprospective new members.

We also continued our focus on Board independencewith 14 of our 15 members independent of the Bank.

A HISTORY OF STRONG LEADERSHIP

I am honoured to succeed your past Chairman,John Mayberry, who retired this year after a 20-yearterm as a Board member. Johns leadership andforesight guided us through some exceptionallychallenging years for the global financial industry.I would like to thank John for his leadership anddistinguished service to you.

We welcomed two new Directors to your Boardthis year: Guillermo Babatz and Nora Aufreiter.Guillermos experience, particularly in LatinAmerica, contributes a unique perspective in lightof the Banks international footprint. Norasindustry knowledge, acquired through a lengthyinternational management consulting careerfocusing on consumer-facing industries, also addstremendous value.

POSITIONED FOR LONG-TERM SUCCESS

Canadas banks have once again been named amongthe soundest in the world by the World EconomicForum. This speaks to the strength and stability ofCanadas banking system, based on a robust riskculture and well-articulated risk appetite. WithScotiabanks sound strategy and strong leaders,I have every confidence that we will continue tobuild on our 183-year record of success.

I would like to thank our President and CEO BrianPorter, his leadership team and the thousands ofScotiabankers around the world who help the Banks21 million customers become financially better off.I am truly privileged to work with this team, whichbrings commitment and enthusiasm to work eachday and carries it forward to enrich theircommunities.

And finally, thank you, shareholders, for yourconfidence in us, which helps fuel the momentumtowards an ever brighter future for Canadas mostinternational bank.

2 2014 Scotiabank Annual Report

Brian Porter

President and Chief Executive Officer

CEOMessage3

Dear Fellow Shareholders,

It is my pleasure to write to you as we embark on Scotiabanks184th year, my second as President and CEO of your Bank.

2014 was a productive year for Scotiabank. Before getting intothe details, including our financial performance and the importantsteps we are taking to become an even better bank, I would liketo share a few observations about the past year.

Over the past 12 months, I met with many of ourshareholders, customers, key stakeholders andemployees around the world. These interactionsmade it clear that the Bank is widely viewed ashaving a strong global industry position withexcellent opportunities for growth. Our strategy isclear and well understood. Our customers appreciatethe knowledge, expertise and commitment of ourpeople. And there is great pride in being Canadasmost international bank.

CANADAS MOST INTERNATIONAL BANK

I firmly believe that the combination of Scotiabanksfocused strategy and diversified business model,which is unique among our competitors, will createlong-term value for our shareholders.

We have a strong and growing foundation. We arethe third largest bank in Canada and among the 25largest and soundest banks in the world. The Banksstrength in Canada provides a solid foundation for oursignificant operations in select international markets,

which in turn, further enhances the Banksgrowth potential and diversification. In fact, morethan half of the Banks earnings are generated inCanada, with the remainder coming from ouroperations internationally. Our earnings arefurther diversified between well-balancedbusinesses and customer segments.

For more than 125 years, Scotiabank hassuccessfully operated with a meaningfulinternational footprint. Today, we haveoperations in North America, Latin America, theCaribbean & Central America and parts of Asia.We use this footprint to help our customers inother markets that have attractive economicfundamentals and strong growth prospects.Increasingly, we add value to our businesscustomers by delivering the full capabilitiesof Scotiabank in key international markets particularly the four Pacific Alliance countriesof Mexico, Peru, Colombia and Chile.

37%OTHER INTERNATIONAL

56%CANADA

% OF INCOMECANADA, U.S. & OTHERINTERNATIONAL

U.S.7%

* excluding a notable gain in Q3 2014

2014 Scotiabank Annual Report 3

Innovative partnerships that offercustomers more choice

Our commitment to stakeholders:In recent years, financial services companies around theworld have experienced several different challenges. Weare proud of our successful track record of balancing theinterests of our stakeholders, including shareholders,customers, employees and the communities in which welive and work.

We have a strong foundation of integrity, trust, and ethicalbehaviour in all of our businesses. Our common equityTier 1 capital ratio is among the strongest in the world.This financial strength ensures that we are able to fulfill ourfiduciary respons