Luc A. Vanneste – Executive Vice President and Chief Financial Officer Richard E. Waugh – President and Chief Executive Officer Christopher J. Hodgson – Executive Vice President and Head of Domestic Personal Banking Robert H. Pitfield – Executive Vice President–International Banking Stephen D. McDonald – Co-Head–Scotia Capital Brian J. Porter – Executive Vice President and Chief Risk Officer

Jim Bantis - Credit Suisse Securities Rob Sedran - National Bank Financial Michael Goldberg - Desjardins Securities Ian De Verteuil - BMO Nesbitt Burns Mario Mendonca - Genuity Capital Markets Sumit Malhotra - Merrill Lynch Darko Mihelic - CIBC World Markets Brad Smith – Blackmont Capital Luc A. Vanneste: Welcome to the presentation of Scotia Bank’s third quarter results. I’m Luc Vanneste, Executive Vice President and Chief Financial Officer. Rick Waugh, our CEO, will lead off with the highlights of our results. Next, I will go over the financials. This is will be followed by a review of business line performance and an update on priorities by each of our business line heads. Then Brian Porter, our Chief Risk Officer, will discuss credit quality. And finally Rick will close with some brief comments on the medium term outlook. We will then be glad to take your questions. We also have our two Vice Chairmen as well as Jeff Heath, our new Group Treasurer, available to participate in the Q&A. Before we start I would like to refer you to slide number two of our presentation which contains Scotia Bank’s caution regarding forward-looking statements. Rick, over to you. Richard E. Waugh: I must say we’re very pleased to report net income of more than $1 billion this quarter or earnings per share of $0.98. Overall, it was a very solid quarter with no large unusual items or write downs. We continue to perform well by most metrics during a challenging period. These solid results were achieved in large part due to our strategy of diversification across business lines, across geographies. It also reflects our focus on our three overriding priorities: sustainable, profitable revenue growth, capital management and leadership development. This quarter, each of our three businesses had higher earnings. Domestic banking had another very strong quarter with record net income. We continue to see broad market share increases in deposits, in mutual funds, in mortgages. In international, we benefited from strong organic asset growth as well as contributions from recent acquisitions although this was offset by some higher taxes. Scotia Capital had an excellent quarter with strong results across the board in trading, investment banking and in lending. It also benefited from the prudent growth of our corporate credit portfolio. However, portfolio repricing and spread expansion have been delayed longer than we’ve expected. We’ve also experienced higher all bank funding costs in our treasury operations. Credit quality remains stable and loan loss provisions were basically flat compared to last year. Brian is going to provide more detail on credit quality in just a few minutes. Overall then a very solid quarter. The environment though continues to be challenging; economies slowing around the world. However, we will continue to leverage our very strong capital, our high productivity and profitability to pursue strategic acquisitions such as our recent opportunistic purchase of E*Trade Canada and our additional investments in Peru. We have many options to continue our growth. So with that, and I’ll come back later, I’ll turn it over to Luc to go through our numbers in more detail. Luc A. Vanneste: Earnings rose 3% quarter-over-quarter although we remain very strong at 21% and our industry leading productivity improved 50 basis points to 54.3 percent. EPS growth was slightly lower than net income growth due to the higher dividends related to two new preferred share issues, Series 18 and 20. Our balance sheet remains exceptionally strong with improving capital ratios. As Rick mentioned, we continue to see good asset growth. This quarter we also benefited from a strong performance in capital markets and higher security gains. We also had minimal securities write downs again this quarter and loan provisions were stable. These were partially offset by higher expenses and a higher tax rate. Year-over-year earnings were down 2%. This decrease was due mainly to higher loan loss provisions, lower capital markets revenues and higher expenses due to acquisitions and in support of growth initiatives. Also, as Rick mentioned, we have had relatively higher funding costs. Banks globally continue to pay a liquidity premium in the wholesale funding markets and we are seeing higher costs to hedge the banks interest rates risk. As well, the impact of a stronger Canadian dollar hurt our EPS by $0.04. Looking at revenues in more detail on slide seven, year-over-year revenues were up 5% or 8% excluding the impact of 4X. Net interest income was up 7% driven by good asset growth in our core P&C and corporate lending businesses as well as the impact of acquisitions. This growth was partly offset by a lower net interest margin. Other income was up 3% year-over-year. There were broad based increases in consumer driven year revenues including credit fees, cards, deposit and payment services and mutual funds fees as well as higher securitization revenues. These increases were partly offset by lower trading revenues compared to the peak levels in the same quarter last year. There were also lower securities gains. Quarter-over-quarter, total revenues rose 6%. Net interest income increased 4% driven by good asset growth, a favorable impact of derivatives and the two extra days in the quarter. Other income was up 10% compared to last quarter driven by stronger investment banking revenue including record revenues from Scotia Waterous. We also had higher trading revenues particularly in derivatives. As well, we had higher securities gains including a gain on the IPO of the Mexican Stock Exchange. Turning now to slide eight, we continue to see double digit asset growth. Assets were up 12% year-over-year with increases in most of the major balance sheet categories. Residential mortgages were up 15%. Personal loans up 13% and business and government loans rose a substantial 29%. Almost half of this increase related to our acquisition in Chile and trading loans used to hedge derivative positions. These broad based increases were driven by both strong organic growth and our acquisitions. Now turning to expenses on slide nine, expenses increased 8% compared to the same quarter last year due mainly to acquisitions, new branches in Latin America and Canada and spending on other growth initiatives. These were partially offset by lower performance based compensation and the favorable impact in foreign currency translation. Quarter-over-quarter expenses rose 5% due to higher salaries resulting from the longer quarter and higher performance based compensation in line with improved trading results. As well, there was a provision for an indemnity payment in Peru. This related to a contingence liability that is now reasonably likely to be realized. We are comfortable that no further such provisions will be required. Looking at capital on slide 10. As Rick mentioned, capital management is one of our three key strategic priorities. So far this year we have generated more than $1.3 billion of capital. We have also raised $925 million of preferred shares. This additional capital as well as the impact of moving to the 90% floor under Basel II has resulted in higher capital ratios. Tier 1 capital rose 50 basis points year-to-date and tangible common equity has increased 40 basis points year-to-date. We will continue to use the strong capital base to pursue growth opportunities both organic and by acquisition. And with that, I will now turn it over to Chris Hodgson to talk about domestic banking. Christopher J. Hodgson: I’ll be starting on slide 12. Domestic banking had a record third quarter with net income of $455 million, a 16% increase year-over-year resulting in strong operating leverage of 7%. Revenues increased 9% driven by strong year-over-year growth in both assets and deposits as well as a solid increase in fee income. This was partially offset by margin compression due to higher levels of wholesale funding required to fund our strong asset growth as well as a change in asset mix. Expenses were well contained, rising only 2% versus Q3 of 07. We continue to invest in revenue growth initiatives including new branches, more customer facing staff and acquisitions. However, the impact of these investments was largely offset by our cost containment initiatives and lower commission based compensation. Provisions for credit losses increased $22 million compared to last year in line with our strong asset growth including the acquisition of Scotia Dealer Advantage, formerly known as Travelers Leasing. Underlying credit quality continues to be good and 90% of our retail portfolio was secured. Compared to Q2, net income grew 9%. Revenues increased 6% with strong increases in both net interest income and other income. Expense growth was well contained at 3% rising due to higher volumes and two extra days in the quarter. Looking at revenues in more detail on the next slide, revenues increased 9% year-over-year. Retail and small business experienced strong volume growth. Mortgages increased 15% with growth in all [inaudible]. Our pipeline remains solid for the balance of the year. We also recorded double digit increases in revolving credit as well as term and savings and checking deposits. Commercial banking revenues increased substantially fueled by strong organic and acquisition related asset growth. The asset growth reflects three factors: first, increased opportunities given current market conditions; second, a strong focus on margin and fee income; and thirdly, the impact of Scotia Dealer Advantage. Wealth management revenues were flat year-over-year. Direct investing was up 20% and mutual funds and Private Client Group both rose 6% despite a challenging market. These were mostly offset by lower revenues in brokerage due to weaker equity markets. Slide 14 shows our market share gains. Overall, we’ve gained market share in a number of key areas: personal lending, deposits and mutual funds. Our share of residential mortgages is up six basis points year-over-year but slowed this quarter as competition in the mortgage market continues to escalate and we’ve maintained our pricing discipline through this period. We’ve also continued to gain share deposits which is a key area of focus for us. Our year-over-year gains in both personal term deposits and total personal deposits are industry leading even without factoring in our acquisition of Dundee Bank. Finally, we’ve continued to gain share in mutual funds, up 28 basis points year-over-year mainly in the more profitable long term funds. This represents the sixth consecutive quarter of market share gains in this category. Fiscal year-to-date we rank fourth in the fund industry for long term net sales. In addition, we were the number one bank in long term mutual fund sales in the third fiscal quarter, a clear sign that our initiatives over the past two years are paying dividends. And as well, Scotia Capitals had an excess of 80% of long term assets in the top two quartiles for one, three and five year performance respectively. Finally, we’re focused on our top priority of driving sustainable, profitable revenue growth. We are adding new branches in high growth markets. We expect to open 15 branches this year on top of the 35 we’ve added last year. We’ve also increased our sales staff in the important small business sector and put more financial advisors into our existing branches. On the services front, our bank direct deposit account is being well received by customers with more than 70,000 enrollments thus far. Looking at non-organic growth we continue to build partnerships and make acquisitions to generate revenue lift. We recently entered into an agreement with HDFC Bank in India to help us attract customers in the important multi-cultural segments. And recently, we acquired E*Trade Canada which will close the end of September, doubling our footprint in the attractive online brokerage space. Overall, we are watching the economy closely. Going into Q4 we expect to see a relatively stable margin and continued asset growth tempered with our normal final quarter increase in expenses to support our growth initiatives. I’ll now pass it over to Rob Pitfield to discuss international banking. Robert H. Pitfield: International banking’s net income was $321 million this quarter, up $51 million or 19% from Q3 07 despite the $17 million negative impact of foreign currency translation. Revenue growth was very strong, up 30%. Key drivers were strong organic loan growth spread across all key regions as well as acquisitions in the $40 million gain relating to the IPO of the Mexican Stock Exchange. Expenses increased 25% versus last year driven largely by three factors: our acquisitions in Chile, in the Caribbean and Central America, which added $49 million; investments in revenue growth initiatives including the opening of 130 branches and the related increases in compensation, premises, advertising and technology; and a $28 million provision under a contractual indemnity that Luc mentioned earlier. Similar to the last quarter, international’s tax rate increased significantly on a year-over-year basis due to a more normalized tax rate in Mexico. Provisions grew $31 million versus last year because of higher retail provisions which relates to higher volumes. The impact of acquisitions and some deterioration of retail credit quality in Mexico. Net income was in line with Q2, revenues increased 7% with growth in both net interest and other income. Quarter-over-quarter expenses were negatively impacted by the indemnity expense and higher loan loss recoveries in Q2. Moving to slide 18, revenues by geography, as you can see our 30% revenue growth was very diversified. Each region increased year-over-year with Latin America and Asia showing particularly strong growth, up 84%. On a year-over-year basis Mexico benefited from strong retail loan growth and a higher margin. The IPO gain was partly offset by lower trading revenues. In the Caribbean and Central America, loan growth was also very strong with retail and commercial volumes increasing 18% and 13% respectively. The negative impact of foreign currency translation partly offset this strong loan growth. In Latin America and Asia, the very strong increase was driven by our position in Chile as well as strong and diversified organic loan growth. Commercial volumes in Asia grew by more than 60% and improved both commercial and retail volumes grew significantly, up 54% and 40% respectively. Quarter-over-quarter revenues increased 7% with strong contributions from Mexico, the Caribbean and Central America. Priorities, I’d like to touch on a couple of these. We remain focused on expanding our distribution networks, opening 22 branches during the quarter mainly in Mexico, Chile and Peru. We are well on our way to achieving our plan to open between 90 and 100 branches this year. We continue to grow through acquisitions. In recent months, we have announced three acquisitions in Peru, a key market for us. In May, we increased our ownership in Scotia Bank Peru, the country’s third largest bank, from 78% to 98%. We purchased Banco del Trabajo and added more than 130 locations to serve the consumer finance segment and in June, we acquired a 47.5% stake in Profuturo, Peru’s fourth largest private pension fund with 23% pension fund customers. These acquisitions helped solidify our leadership position in this fast growing market. Lastly, our segmentation strategy is working well. We are leveraging our expertise in consumer finance to drive growth in Chile and other Latin American countries and opening up private client centers to serve our more affluent clients. As well, we’ve introduced world class call centers in certain sites, internet banking and credit risk management platforms to better serve our traditional customer base. I’ll now turn it over to Steve and Scotia Capital. Stephen D. McDonald: Scotia Capital had an excellent quarter with net income of $291 million, up 5% from Q3 07 and up 16% from last year. This is our third best quarter ever after Q1 and Q2 last year which both benefited from loan loss and interest recoveries. Looking briefly at some of the trends, year-over-year revenues were up 1% from a very strong quarter last year. Expenses improved by 5% driven by lower performance based compensation. Our ROE was very strong at 34.1%, well above last year and the prior quarter. Quarter-over-quarter revenues were up 21% due to much stronger trading revenues, particularly in derivatives and fixed income which had a record quarter, higher revenues in the lending business and our second best quarter ever in investment banking. Expenses rose 5% due to higher performance based compensation in line with the higher revenues. Other operating expenses were well controlled. Looking more closely at revenues on slide 22, year-over-year revenues rose 1%. This was a great result; in fact, the second best quarterly revenue performance since 2002 as the vast majority of our businesses performed very well. In our lending business we enjoyed 31% growth in loan interest and 10% growth in credit fees. Our trading businesses also did very well with record results in fixed income and continued very strong results in foreign exchange and precious metals, both of which set new record highs earlier this year. Derivatives also had a strong revenue quarter but was down from stellar results a year ago. Quarter-over-quarter revenues rose an impressive 21% again benefiting from the strong product diversification in Scotia Capital. Trading revenues were significantly higher particularly from derivatives and a record quarter in fixed income trading. Investment banking revenues were the second best ever with Scotia Waterous having a very strong quarter and delivering record results. On the lending side, we benefited from much higher credit fees and loan interest. As well, last quarter included a loss on securities incurred in the U.S. which was not repeated this quarter. Bring to the next slide. We made very good progress against our priorities for the year. One of our key priorities is to further expand our client coverage globally in selected industry, particularly in energy, mining and infrastructure. These industries represent significant opportunities for us in our areas where we have key strength that we can leverage. We’ve been successfully executing against our strategy for these industry specialties with a coordinated approach across business lines and geographies in each of these sectors and we’re seeing some good momentum. For example, in energy, Scotia Waterous has achieved record results as noted previously and the pipeline remains strong. We recently hired a new team in Canada to focus on infrastructure, a segment that offers lots of opportunity. Estimated infrastructure spending in Canada over the next five to ten years is $100 billion to $150 billion and we want to be well positioned in that market. In mining, we recently led some major transactions. For example, this quarter we were the exclusive advisor at a large transaction for a global mining client. We’ve also been leveraging our leading global position in precious metals through ScotiaMocatta which was recently granted membership in the Shanghai Gold Exchange, China’s leading precious metals exchange. Another key priority is to continue leveraging our NAFTA capabilities, a significant competitive advantage for us. We’re very pleased with the performance of Scotia Capital Mexico where our year-to-date results have us on track for a 50% increase in whole year net income. Above all we will continue to be disciplined about risk management. It is disciplined risk management, more than anything else, that’s led us to these good results and competitive positioning. I’ll now pass it over to Brian. Brian J. Porter: As Rick mentioned, our credit quality remains stable this quarter despite the challenging environment. Our loan loss provisions were basically unchanged quarter-over-quarter. With respect to our exposure to the auto industry, an area of particular interest, it is well diversified and manageable. In particular, the GMAC program has performed in line with our expectations. Looking first at provisions in more detail, the specific provisions were $159 million this quarter compared to $153 million last quarter. The domestic provisions were basically unchanged quarter-over-quarter in both the retail and commercial portfolios. International provisions were down slightly given the higher commercial recoveries in Mexico and Peru which more than offset an increase in the retail provisions. The increased level of retail provisioning reflects continued asset growth as well as some deterioration in the Mexican retail portfolio mainly in credit cards. Scotia Capital’s provisions were $4 million compared to net recoveries of $9 million in Q2. The quarter-over-quarter increase was related to a provision against one account in the U.S. In terms of relative PCL performance, our loss ratio compares very favorably against our peer group. This quarter the loss ratio was 23 basis points, slightly below last quarter’s 24 basis. The next slide provides the breakdown of impaired loan formations by business line. The domestic formations were more or less in line with those of the prior two quarters. The quality of the domestic portfolios remains stable. The international retail formations were in line with the prior quarter. Formations were higher in our international commercial portfolio largely due to the classification of two accounts in the Caribbean. Scotia Capital had one account classified in the quarter partially offset by loan sales in Canada and the U.S. Overall our portfolios remain in good condition. On the next slide we have summarized our exposure to the North American and European wholesale auto loan and acceptances as well as auto backed securities. Our exposure to the North American and European auto industry is manageable. It represents $4.8 billion or 4% of our total business and government loan portfolio. More than half of this portfolio is to dealers and floor planning, mostly foreign auto dealers in Canada. Approximately 60% of the wholesale portfolio is investment grade and the loss experience has been quite low in the recent past and is zero so far in 2008. We also have auto backed securities totaling $7.1 billion, 97% of which for auto loans; the remaining 3% auto leases. A large portion of these securities, $5.7 billion were purchased from GMAC which I will speak to shortly. The last category is liquidity facilities to our own multi-seller conduits as well as liquidity facilities to third party conduits which are primarily auto finance conduits. Of the total $8.2 billion, $1.1 billion is to third party conduits. Approximately 84% of the assets of the third party conduits are externally rated AAA with a balance internally rated investment grade by the bank. Turning now to the GMAC program. As you will recall, we entered into a revolving purchase agreement to buy auto loans from GMAC through a structured note facility more than two years ago. The revolving period will continue for another two years. The structuring of this transaction resulted in more than 90% of the notes being rated AAA. The underlying assets of these securities are all auto loans; there are no leases. In structuring the transaction the bank negotiated a level of credit enhancement over and above the expected losses. This enhancement is in the form of over-collateralization through a discount in the purchase price. As such, we have no credit exposure to GMAC on this transaction. We gave up some of the upside for more downside protection which has served us well. It is important to point out that under the agreement, when the subsequent pools of securities are purchased, the enhancement is reset based on the recent loss performance. We recently negotiated with GMAC for a portion of future draws to be Canadian based auto loans. This will enable us to diversify our risk away from the U.S. consumer. The credit enhancement has been more than sufficient to cover all losses to date. We run different stress scenarios on this portfolio on a regular basis. We are comfortable with the results and expect this portfolio to continue to be profitable. Overall, while there are strains on the U.S. consumer we are comfortable with the performance of this program. Finally, looking at provisions beyond 2008, in the domestic bank we develop provisions to increase in line with the organic growth in the portfolios. In international, retail provisions will increase as the portfolio grows and will also be impacted by the effect of the US slowdown most notably in Mexico and some parts of the Caribbean. Further, we anticipate lower commercial recoveries in Mexico and Peru. We would also expect the slowdown in the US economy to have some impact on certain industries in our wholesale portfolios. Overall we anticipate moderate increases in provisions over the medium term. And finally as we mentioned last quarter, we do not have any exposure to auction rated securities. I’ll now turn it back to Rick. Richard E. Waugh: So as you see, in summary, we had a very solid quarter and we feel we are well positioned to meet the ongoing market challenges as well as the economic slowdown. Our diversification strategy is working well and each business is executing on our three overriding priorities that I mentioned. We’ve had strong asset growth although we do expect this will moderate somewhat going forward. Our margin is stabilized despite higher wholesale funding costs and should gradually improve as our corporate portfolios re-price. We have a strong balance sheet and our capital ratios are excellent. We are one of the very few financial institutions in the world that is growing yet at the same time improving its capital position. Our balance sheet strength allows us to continue this growth, to be opportunistic about acquisitions, to provide dividend growth to our shareholders, and to offer great careers for our people. Each of our businesses has opportunities. In domestic we have good and we believe sustainable momentum. We will continue to focus on customers, customer acquisitions and capital on the strength of our distribution channels. We’ll open more branches in this fourth quarter and we’ll continue to expand our sales forces. We’ll also look for acquisitions and alliances to drive customer growth. And we will keep our costs well controlled. In international we will reap the benefits of our expansion strategy in the faster-growing emerging markets. We are building on our distribution network and growing our wealth management and consumer finance business internationally. In Scotia Capital will continue to build in the success of our global strategy in selected industries. We are also leveraging our unique NAFTA capabilities and we will be benefiting from significantly higher spreads in the credit markets. And we will of course maintain our strong and proven risk management and cost control disciplines. These are two of our long-proven core competencies. So overall despite the very real challenges I mentioned earlier we retain a positive outlook and we expect to see profitable sustainable growth in all of our businesses. With that, before we open it up to Q&A, I just would like to mention that this will be Bob Brooks’ last time with us on this call as he is retiring, and get this, after 40 great years with the bank. So Bob, thank you personally on behalf of myself and all our colleagues at Scotia Bank. Job well done. Robert L. Brooks: Thanks very much. Richard E. Waugh: Now over to Luc for questions. Luc A. Vanneste: Could we have the first question on the phone please?

(Operator Instructions) Our first question comes from Jim Bantis - Credit Suisse Securities. Jim Bantis - Credit Suisse Securities: When I look at the mind boggling results coming from Scotia Capital, that’s really impressive in the context of record revenues and 34% ROE. I’m just trying to understand the corporate loan growth, where that’s coming from in the context of the comments that Brian had about a slowing US economy and we’d all see the headlines with respect to the global economy slowing. Maybe Steve you can elaborate more on where this 32% business loans growth is coming from year-over-year in terms of asset class, perhaps sector, rating? Maybe a little bit more color to give us comfort on this strong growth. Stephen D. McDonald: Sure Jim. We’re really seeing it across the board very broadly. So in all of our markets we’re seeing growth. I think that is because of our unique competitive positioning that in this environment we’re actually open for business and we are seeing some very high quality opportunities. So that continues. We’ve been talking about this now for a number of quarters and we hope that this condition will continue. So across the board and similar to comments in the past, we really are trending toward the investment grade and continue to have investment grade credit as the predominant asset class. We haven’t seen a lot of need or reason to go down the risk quality curve because we’re seeing excellent opportunities in the investment grade. They’re re-pricing very nicely. We’re seeing a lot of corporate to corporate consolidations. The private equity market seems to be quite dead but the corporate to corporate industry consolidation is actually quite active and that’s typically investment grade high quality deals, good synergies, deals make a lot of sense, capital structures are very acceptable, so we’ve been participating quite actively in that sphere. Of the growth in overall assets, some of the growth has been our total return swap business. We’ve seen about 24% year-over-year growth in our core loan business globally and the balance has been a relatively manageable level of growth in our total return swap business. Jim Bantis - Credit Suisse Securities: So you’re not seeing any increase in single name risks or sector risks in that regard? I guess I’m just worried about slipping back into perhaps what was an issue five years ago in terms of the corporate loan book. Richard E. Waugh: Believe me, we are vigilant and if by the odd chance that we ever step out of line, we’ve got a lot of people around the table and around the bank to make sure [inaudible]. Stephen D. McDonald: You can hear me nodding my head, Jim. Jim Bantis - Credit Suisse Securities: It’s true but Mr. Brooks is leaving so there’s a little bit of a caution. Richard E. Waugh: And he’s taking the one big loan with him. Stephen D. McDonald: The single name limit is probably the most important thing that we’ve done in terms of risk management in this bank over the last 10 years. And we really are rigorous about complying with that risk-rated constraint and we absolutely live by that. Brian J. Porter: The only point I’d add to that Jim as Steve’s saying we’re adhering to our discipline, we monitor the exceptions if we go over a stated limit for M&A purposes where there’s a bridge or something like that. That’s reported to the board on a quarterly basis. Those exceptions have gone down in the last couple of quarters and will continue to trend down. Jim Bantis - Credit Suisse Securities: Thanks for the color Brian. And a quick question for Luc on the other segment for the sharp drop in earnings down to $89 million loss. Can you just elaborate on what caused that? Luc A. Vanneste: I’ll turn that over in a second to Jeff Heath, our Group Treasurer, because that largely relates to funding and funding costs but I just want to confirm to everyone that relative to our funds transfer methodology there have been no changes in that methodology. We’re doing the same thing as we’ve done previously in that the GAAP in domestic is charged to the domestic bank on an assumed 30-60-90 day BA rate. So those rates have been coming down the short end so Chris and his team are benefiting. Two years ago it was going the other way so they suffered as a result but the funding is more expensive and that is in the other category. Maybe I can turn it now to Jeff to add a little color and commentary. Jeffrey C. Heath: Treasury basically is responsible for managing the bank’s interest rate risk sort of at the top level and liquidity risk. The costs of that largely reside in Treasury and as you’re probably aware, year-over-year all banks are paying increased funding costs in the wholesale markets as measured by the credit spreads that are being demanded in the markets. So we’re swept up in that market re-pricing of risk. However, on a relative basis we have good market access and pricing. Jim Bantis - Credit Suisse Securities: It seemed like the loss though seemed to be exaggerated on a sequential basis as opposed to year-over-year and I was wondering if there was anything unusual in there as well? Luc A. Vanneste: We’ve got some lower securities gains in the current quarter as well that are part of the Treasury unit so that will impact the number as well. Jeffrey C. Heath: Keep in mind the major securities gain in the quarter was within international because it was the Mexican IPO. So if you net that against the securities, securities gains within Treasury were down as Luc said or at least were lower.

Our next question comes from Rob Sedran - National Bank Financial. Rob Sedran - National Bank Financial: Brian, if I could just take you to your last slide, Slide 31, where you talk about the outlook for provisions over the medium term. The one aspect or the one category where you didn’t talk about a US slowdown is in the domestic portfolio. Is the bank operating under the assumption that Canada should be able to avoid any material impact here and are you positioned in the book for that scenario? Brian J. Porter: That’s a good question actually. When we look through the different products in domestic retail this past quarter, delinquencies are down in basically all product lines, which is a good sign and was a slight surprise. But the business continues to perform fairly well. We thought we might see some upticks in delinquencies in some particular products. So keep in mind that we can adapt and change very quickly in terms of our scoring and other methodologies. But the key driver in our domestic credit profile is employment rates and employment rates in Canada are still relatively strong and we haven’t seen the cotangent from the US in our domestic retail portfolios. Rob Sedran - National Bank Financial: And just turning to the second category, can you talk a little bit about what your baseline scenario or what your assumed economic performance in Mexico is for the next little while, the next year or so? Brian J. Porter: I think Rob made a comment in his slides and I made a comment in my slides is that our international retail provisions for the quarter were approximately $80 million. $48 million of that is related to Mexico; $27 million of that is related to cards in Mexico. That’s been our biggest issue. We talked about it in prior quarters. We have taken action; we think the action that we’ve taken is getting traction. What we’ve done is we changed our underwriting standards; we’ve changed how we acquire clients; we’ve gone to risk based pricing; we’ve changed our collection principles. Keep in mind that a lot of what we’re seeing in Mexico is astemic. All of our counterparts have had big hits in their credit card portfolios so we’re not alone in this. We deal at the mid- to higher end portion of the market place. But I will say that we are seeing some signs of cotangent generally in Mexico and the credit environment in Mexico will be slightly challenging for the next three to four quarters in our estimation.

Our next question comes from Michael Goldberg - Desjardins Securities. Michael Goldberg - Desjardins Securities: I wonder if you could give us some thoughts on the meltdown in US banking, whether you think it provides an opportunity? What would be prerequisites for you execute on something? Richard E. Waugh: I guess I’ll take that one on. For the last several years we have not made retail banking, P&C banking in the United States any priority at all. This was due to we thought superior opportunities in other markets. Obviously we were all aware of the significant change in valuations that we’ve seen over the last year, valuations in banks, the currency and what have you. So one of the negatives that we certainly had here at Scotia was the values were awfully high to pay in a very competitive legalistic regulatory environment. So the valuation is there but it’s still very competitive; the regulation environment is actually getting worse rather than better because I think the US has to go through a major upheaval in re-regulating vis-à-vis Bear Stearns and who’s going to regulate what and how is going to be a long journey and will affect all the participants. And of course as we’re seeing the legal system down there is reacting in many ways and creating problems to the participants. So while values are very enticing a lot of the issues still remain. We’re always mindful of opportunities and when you look at the values, we look. But unless we see a very compelling reason where not only are we getting value but we can achieve going forward value, we have a very defined and disciplined process and we’ll keep that. What the future will hold down there, our wholesale portfolios are giving us good prudent leverage. We’ll watch it but it’s not on strategy as we speak and we still I think have got significant opportunities elsewhere but we are in a relatively good position to look at whatever opportunities present themselves. So it’s business as usual. Michael Goldberg - Desjardins Securities: I’ve also got a couple of questions for Chris. What accounts for the 20% increase in managed mutual fund assets during the quarter? Was there any acquisition or is it all from net flows? Christopher J. Hodgson: Michael, no there were no acquisitions. It’s just organic growth. We as we indicated in some of our numbers have had very strong growth in terms of our long-term sales. There’s been a significant push in the last two years to provide tools to our advisors in the branch system and put the metrics in place. But specifically it’s not from any acquisitions. This is just purely from organic growth and we actually expect that to continue into the future. So we’ve had very significant margin gains in that area and we’d expect those to carry forward. Michael Goldberg - Desjardins Securities: Also, over the past year your personal non-term deposits are up about $5 billion. This is in the bank as a whole for 14%. How much of the increase results from intensified focus in domestic retail and how much of that is organic versus acquisition related? Christopher J. Hodgson: I think clearly we’ve had a significant focus on growing our deposit base over the last couple of years and if you look at the numbers too in terms of our growth in assets versus liabilities, you see we’ve narrowed that spread to almost equal. We have benefited from the purchase of Dundee Bank. We have $3.3 billion in deposits there Michael. When we bought that bank we had $1.7 billion so we’ve grown it by $1.6 billion. We’ve also had a significant focus on some product specific opportunities during the RSPCs and we brought in another $500 million in that area. But what I’d like to say on this is we’re not buying deposits. The reality is that we’re being very disciplined in our pricing. So we actually have $10 billion in our money master account; we pay 2.25% on that; two other institutions pay more; and a couple of other institutions are about the same. So we’ve been very, very price neutral in watching that and making sure that we keep our margins in place. So we’re going to continue to focus in growing our deposits but I think the key message here is that we’ve narrowed the gap between the growth in our assets and growth in deposits. Michael Goldberg - Desjardins Securities: I wasn’t actually asking about term deposits; I was just only interested in the personal non-term. Do you have any idea what the organic growth in that is over the past year? Christopher J. Hodgson: Well it would be most of it because in terms of acquisitions, I can’t think of any that would play into that Michael so it would be abominably organic. Richard E. Waugh: Personal non-term the wins we’ve had now is we reinvigorated our small business strategy and as you know small businesses tend to be conservative and it’s really a deposit gathering strategy. And I don’t have the numbers with me but we were very happy over the last four or five quarters on our growth in small business deposits. Luc A. Vanneste: Small business deposits were up $1.5 billion or 12%. Richard E. Waugh: There’s 12% growth right there.

Our next question comes from Ian De Verteuil - BMO Nesbitt Burns. Ian De Verteuil - BMO Nesbitt Burns: I have a question for Brian on the [G-mac] portfolio. One of the things that I was surprised at was the subsequent purchases that you see in the [Nordsford] financials. You have an ability to reset the amount of over-collateralization. Can you explain to me how that works? Brian J. Porter: Sure. Just a couple of things that I want to repeat that I think are crucial in the [G-mac] transaction, which I think once we get it out people have a better understanding of it. So first, and I’ve said it before and I’ve said it in my text, that these are loans, not leases. Secondly, the pools are cross collateralized. And thirdly, the enhancement is based on the last loss experience of draw-down. So if the loss experience is going up, our credit enhancement is based on the last loss experience. The fourth point I want to make is we have stressed this portfolio a number of different ways and we’re comfortable, as I said in my text. So if you look at the stressed environment of the last three months, if it continues through the 24 months remaining of this revolver, we do not lose money. The transaction is still profitable for the bank. So I think that’s important to note. And we’ve stressed it under a variety of other different scenarios so if you take two times the original loss assumptions, the transaction is still profitable. If you take two times the actual loss experience, it’s still profitable. Ian De Verteuil - BMO Nesbitt Burns: When you say cross collateralization, what do you mean by that? Because if I’m correct, it’s not [G-mac] over-collateralizing, actually you get a discounted value off the face amount, but how does cross collateralization work? Brian J. Porter: Well, the pools work such that based on expected loss performance and actual loss performance, there’s a sharing agreement with [G-mac] in terms of performance and that if one pool performs better than the other, we take the excess profit or enhancement if you will and move it to the next pool. Ian De Verteuil - BMO Nesbitt Burns: And how many pools are there in total? Because I know you buy them in sort of tranches. How many are there? Brian J. Porter: I don’t have it off the top of my head but we’re generally doing this on a quarterly basis so there’s eight different pools. Ian De Verteuil - BMO Nesbitt Burns: How big can the Canadian piece end up being of the total amount? Brian J. Porter: 25%. So based on $6 billion that’s $1.5 billion.

Our next question comes from Mario Mendonca - Genuity Capital Markets. Mario Mendonca - Genuity Capital Markets: A question first for Chris Hodgson. 6.8% operating leverage in the quarter retail, you suggested that the fourth quarter would be a little heavier on expenses. 6.8% is obviously a really big number and not something we should probably expect much going forward, but what are you getting at when you refer to higher expenses in the fourth quarter? Could you put anything around that to help us gauge it? Christopher J. Hodgson: Sure Mario. I think 6.8% is a big number and I wouldn’t be looking for that in Q4 but when I talked about expenses trending up in Q4, historically if you go back and look at our numbers you will see some increased expenses and they tend to be around two areas, one is project spending which we will put into Q4. The other is our branch expansion. I mentioned that we were doing 15 branches; we’ve opened six so there’ll be another nine coming in in Q4. And then there will be some acquisition costs on things that we’ve done over the course of this year. So if you do look at what we’ve done historically, we’re going to come in right around that level. Mario Mendonca - Genuity Capital Markets: In terms of an efficiency ratio or operating leverage? Christopher J. Hodgson: No, operating leverage we expect to decline in Q4 but we’re going to have a positive operating leverage for the year and we still expect a reasonable overall [Niat] for Q4. Mario Mendonca - Genuity Capital Markets: Another sort of related question in retail. Loan growth has been huge now for quite some time. I think all of us would expect at some point a slow down there. What do you think of as a normalized loan growth in Canada? What would you connect it with? Would you look at the long term and say the sort of 6% we’ve seen over the last 15 years is normal? And do you expect the slowdown in the near term? Christopher J. Hodgson: Let me answer your question on the near term. We actually believe if we’re looking at Q4 the pipeline that we see is still quite solid and I made a comment on that in some of my comments. So we do think that Q4 actually will be pretty reasonable. We are watching 09 and certainly with markets and the environments that could have an impact. But surprisingly we have not yet seen that actually in our flows of business up to this point. Richard E. Waugh: We’re just starting to put together what next year is going to look like and as you know when you hear the central bankers say they don’t know what next year’s going to look like, it gives us some challenges. But having said that, and particularly your question on the Canadian side, the Canadian market (a) didn’t have the bubbles - there are some but not as many; (b) as I think Brian or someone mentioned the unemployment rates and that are still very manageable in Canada; and (c) our banking system will be lending; which are three characteristics you don’t see in the United States where all this stuff is drawn up. So we can’t keep up this pace as you mentioned and we were quite presently surprised this year at the pace of growth but we will see growth. We haven’t got our number yet so we’re not going to give it to you, but it will be positive and I think there will be growth. Let’s go that far, but there’ll be growth. Mario Mendonca - Genuity Capital Markets: Finally, Brian you referred to unemployment being obviously a very important driver. Canada’s seeing around 6% right now, maybe 6.1% I can’t exactly remember the number. Your own economist, BNS’ economist, I think is calling for something like 6.6% later on in 2009 and TDs is called around 6.7%. Do those changes, say from 6% to 6.6% or 6% to 6.7%, those 60 or 70 basis point lifts in unemployment, does that matter or do you need to see something a little more dramatic than that to actually push PCLs up in Canada and loan growth down in Canada? Brian J. Porter: That’s a good question. Actually we’ve run some stresses on our domestic retail portfolio and our view is it has to get over 100 basis points increase in unemployment to have any meaningful impact on our retail portfolios. So 50 or 60 basis points, not going to have an impact on delinquencies, PCLs. It would have an impact on loan growth though. Mario Mendonca - Genuity Capital Markets: You kind of hit on what I was going for. The domestic retail you say not much of a move there. Commercial similarly? No big move unless we see 100 basis points or more? Brian J. Porter: I would agree. Mario Mendonca - Genuity Capital Markets: And how about wholesale? Brian J. Porter: If you go through our wholesale portfolio, I talked about some stresses on certain industries and you know what we’re mindful of. It’s the auto industry; secondarily the forest industry; and anything that touches the house in the US which obviously has an impact on employment rates and the consumer. But the general health of our commercial and wholesale portfolios is fairly good. So 50 basis points not going to have an impact. 100 basis points or more you start to get concerned.

Our next question comes from Sumit Malhotra - Merrill Lynch. Sumit Malhotra - Merrill Lynch: First one also for Brian Porter. You talked a little bit about the fact that there was classification of two accounts in the Caribbean in your international commercial portfolio. Two quarters in a row we’ve seen a big pick up in formations and impaired loans there yet your provisions have been in net recoveries in that segment for a good period of time. Can you talk a little bit about international commercial and how you feel you’re reserved there? Brian J. Porter: As you said two accounts went non-accrual this quarter. They’re real estate development projects. We didn’t provide for them. One is $45 million; the other one’s $31.5 million. We didn’t provide for them because loan to value is relatively low. It’s below 50% so we’re very comfortable that there’s enough equity in those transactions and where we sit for the time being. I would make a general comment about the Caribbean though. Again we’re feeling the impact of the US cotangent. The closer you are to the US, be it Puerto Rico or the Bahamas, is feeling the pinch. And there’s been a lot of hot money in real estate developments in the Caribbean in the last couple years. We’ve backed away from a lot of transactions. They were either done by somebody else or they hadn’t been done by somebody else. But the Caribbean and some of these real estate financings and projects is going to be a bit of a grind-out. But again we’ve been at this for a long time; we’re comfortable with our loan to values; and we’ll be fine. Sumit Malhotra - Merrill Lynch: I’ll switch over to one for Luc. When I look at the three operating segments, each of them have NIM up quarter-over-quarter. Each of them have very strong operating leverage. To go back to your comments on the transfer pricing, you end up negative on operating leverage on the all bank level and certainly there’s a lot of references to higher funding costs. Is this just really a situation where we watch where the 30-60-90 bankers’ acceptance rate goes on average during the quarter and that gives us an idea where domestic NIM is going to go? Obviously there are a few other pieces, but in between the segments is that the way to look at it? Luc A. Vanneste: I think that’s fair. Going to domestic I think you need to watch what’s happening on the deposit growth side as well as you’ve got your rates decreasing. The benefits of those deposits are less than they would be in a higher rate environment. The other thing, in terms of operating leverage clearly a key component there is the discretionary spend and the expansion side. We continue to be a growth story but we are committed to the positive operating leverage on an annual basis. So that’s something that we’re going to have to manage going forward. Richard E. Waugh: One thing on the NIM, on the asset side our customers have gone over to the floating rate variable and so that has an effect and especially there’s some pretty great competition out there. So the asset mix because the margin on the floating is not as good as the five-year and I think certainly our portfolio and I would assume most of our competitors’, there’s been a great swing year-over-year from the five year to the floating rate. I mean, a dramatic swing. And that has some NIM implications. Sumit Malhotra - Merrill Lynch: Last one is for Chris Hodgson. Chris you referenced it a couple times the strong results in the mutual fund side for the bank, given the fact you seem to have momentum in the long-term space in the industry right now and considering Scotia’s long-held mantra of a path to control, can you talk about a situation in which you think it would be beneficial for you to have a smaller stake in the business you own today? Christopher J. Hodgson: I think first of all we’re very happy with the organic growth that we’ve had in our mutual fund business and that was really the purpose of the comments that I was making earlier, and we’re quite happy to go it alone in that respect. We’ve also been very clear that if there were opportunities to expand our asset management that we would consider that but there are two key factors. One is there has to be a good strategic fit and secondly, the pricing has to fit in with the discipline that we’ve had within Scotia for all of our acquisitions. So if those are there, then we do it. If they’re not there, we don’t do it. We’re very, very pleased with the direction we’re going with our business today and we’re going to continue to expand our asset management business organically and if there are opportunities that present themselves, we will look at it. I won’t comment on any of the speculation and rumors because we have a policy not to do that but we certainly do like to have a meaningful stake. We own 100% of our business today and that continues to be important to us as we go forward. Sumit Malhotra - Merrill Lynch: So in the short term maybe for Rick, path to control isn’t necessarily a deal breaker for Scotia Bank at this time? Richard E. Waugh: If you look over the last several years what we’ve done, we’ve done a lot of acquisitions. They tend to be add-ons and smaller ones and what have you, but our international side we started out with 20% and 30% positions in Chili, in Peru, in Mexico, in Thailand. We just did the Thai deal which is 25% and we do get a chance to go to 49%. 175 years of long-term we’ve been able to a) have strategic influence and be there when the opportunities happen to build on the platform. I’ve also learned at M&A over the last several years there is no one formula. What is important is that are well disciplined and defined in what we do and it moves us forward on our strategies. So wealth management as we’ve said time and again is a significant priority for us because we’re very comfortable with our organic growth but in Canada and even international we’ve got to get more scale. So whatever we do will be on strategy and will move us forward on that strategy in particular in earnings. If that is a less than 100% or whatever the percentage is, it will have to meet a lot of other tests. So one formula doesn’t fit all so we can’t comment and wouldn’t on any specifics but we’ll keep our discipline, we measure what we do by do we have the talent and is it on our strategy and do the numbers make sense. We certainly have the capital and we’re in this for the long term so we’ll see what gives but I must compliment the organic growth that we’re getting. I just wish we were twice the size. But we’ll see.

Our next question comes from Darko Mihelic - CIBC World Markets. Darko Mihelic - CIBC World Markets: I just have one question and I’m hoping for some good color on it. My question is for Brian. I’m looking at the US corporate and commercial portfolio of about $22 billion in size. When I compare it to one of your competitors, and I’ll name them BMO which has a $25.5 billion US corporate and commercial portfolio, and if I’ve done this right, it looks as though you have a very small amount of gross impaired loans for that portfolio, somewhere around $86 million. That would be 10 times less than that of BMO’s impairments for its non-commit portfolio in the US. I was wondering if you could provide some sort of breakout of what you have in that portfolio and more or less recognizing the purpose of my question is what’s going to give me comfort that we’re not going to see a 10 times rise in your non-performing assets in the US? I suppose if I ignore fairway for BMO it would only be five times greater than what you have, but either way what’s to say that we’re not going to see a five to 10 times increase in the non-performing assets of your US corporate and commercial portfolio? Brian J. Porter: Fair question. If you look at the concentrations by industry Darko and we addressed this a little bit last quarter, not as directly, but the big industry concentrations we have are energy and in energy we include pipelines and midstream assets; it is power which is an investment grade portfolio; real estate and that includes real estate in Canada, in our commercial business and in the US; automotive which I’ve spoken about; and financial which I can talk about as well. So if you look at that portfolio, it’s largely investment grade by composition. It would be approximately 70% investment grade. There will be in a credit downturn some migration pressures downward on that portfolio but again a number of us around the table lived through the experience of 2001 and 2002 and redirecting that business in the US. We’ve put some disciplines; we’ve put controls in single name limits, exposures by industry, by corporation, etc we adhere to those - you heard me express that earlier. So I think the big thing is we’re adhering to discipline; we’ve dodged some of the bullets in terms of industry; and the comment I made before Darko is we did not go down market. This bank had a long rich history in terms of the LBO market and high leverage transactions in the 70s and 80s and 90s. But when we looked at it, we said we didn’t have the capital to compete and we couldn’t manage the tail end risk. And that’s turned out to be fortuitous for us so I can think of in Scotia Capital this year we’ve done under an internal IG code of sub investment grade IG75 I think we’ve got one $30 million commitment this year. So we’re adhering to our discipline, we’re sticking to our focus, industries where we have cross sell potential and we can manage the risk. Luc A. Vanneste: If I could just add to that question, give a little color as you asked for, although Brian covered it very, very adequately, there’s two of us here actually around the table that lived down there for 10 years and managed the wholesale portfolio. I did it for Scotia and Steve McDonald did it for another bank, we don’t have to name them. So, we’ve lived there and done that, we’ve seen what I call the good, the bad and the ugly and I think it was about three or four quarters ago, I forgot, we actually gave you and everybody a presentation that if things get as bad as they were a number of years ago we’re in much better position as a bank and in the US whatever comes to bear and it’s because of the metrics Brian just gave you. The percentage of our portfolio today versus the years perhaps Steve and I were down there and others, the percentage that is investment grade today and the number is not right at my finger tips but we can get if for you because we do disclose it, is significantly higher. The distribution by industry is significantly broader, the distribution by counterparty and credit is significantly broader. You heard the comment that our hold levels, and we embarked on this thing now for over four or five years ago to bring down the average hold level and the disciplined we’ve instigated that so it is about risk management. Again, I’m just speaking for ourselves, we’ve worked very, very hard. It’s always been a part of risk management and as my opening comments said, it’s about diversification and what have you. We never, ever [inaudible] business. If you remember there was a somewhat controversial a number of years ago that we didn’t put a non-core and we stated it so we kept our relationships and so most of the people we deal with we’ve been dealing with for not a few years, not five years but many, many years. So, it’s not one silver bullet, far from it, it is a whole bunch of risk management practices and what have you. We’re not going to be immune, our provisioning will go up. I guess the last thing I’ll say and then I’ll shut up is look at the – there was a lot of the hung LBOs over the last year and as Brian said we were in that business and we’re still in it. But, we didn’t take the big chunk and we did back off on covenant light, we did back off when we didn’t like the structures and so we had none of that, absolutely none, nil. Again, I’m only speaking for our bank and not the others and what have you, we’ll have higher provisions but I really think and in March, our core competencies of risk management is helping, it’s not going to keep us free and clear but it’s going to move us. Thanks.

Your next question comes from Brad Smith – Blackmont Capital. Brad Smith – Blackmont Capital: Brian, I was just wondering if you could fill in some color for me with respect to the allowance levels. They’ve been basically coming down for at least the last two years, they’ve come down quite substantially. I tend to look at them relative to the gross loan positions and they are still obviously above some of your peer banks but the spread has diminished quite substantially. I think your allowance is down from 131 basis points in Q306 down to around 87 relative to your gross loans now on a consolidated basis. Is there something that you can point to in the mix of your loan portfolio? Something maybe in the international that is changing and it’s a permanent change that will allow you to continue to reduce that allowance to gross loans level? Or, is that just sort of a natural cyclical process and it will start to rebuild at some point? Brian J. Porter: First of all, we’re comfortable with the allowances and obviously the cushion. The big driver here and it goes back to my earlier comment, we provided for two accounts in the Caribbean that went non-accrual $70 some million. We didn’t take a provision because loan-to-value is below 50%, there’s lots of equity ahead of us and we’re very comfortable. We also took a provision in the US, it was non-accrual for $90 million, the provision was approximately $10 million so you’ve got $166 million of non-accruals with $10 million of provision. We obviously go through a lot of thought when we make those provisions and do that but that impacts the allowances and the cushion. We’ve had the same sort of experience the last couple of quarters so that’s what’s driving it. Brad Smith – Blackmont Capital: Yes Brian but that overall allowance, I mean what was different in Q306 when you were sitting with 131 basis points of allowance and today when you’re sitting with 87? I can see the current quarter contributed maybe five basis points of that spread but what’s been going on consistently through there? And, will it continue? Should we anticipate that to continue to ramp down? Brian J. Porter: I think it’s a function of what’s happening in Scotia Capital. We gross impaired loans in Scotia Capital that are basically less than $100 million. We did have some recoveries which would have impacted that to a certain extent. We’ve had right downs and we’ve had significant loan growth too. Risk weighted assets have gone up considerably that’s the main driver. There’s been no change in our methodologies. Luc A. Vanneste: Thank you for joining us on the call today. We will see you next quarter. Thank you.