The Bank of Nova Scotia (BNS) investor relations material

ROE targets and drivers

• Targeting 14% ROE by 2027, with Canadian banking as the main driver, expecting 55–65 basis points improvement, about a third from risk-adjusted margin gains.

• Loan loss provisions in Canadian banking expected to improve in H2 2024 and through 2027, aided by margin expansion and business mix changes.

• Mortgage repricing and productivity gains, including benefits from a restructuring charge, are expected to contribute to ROE improvement, with full benefits realized in 2027.

• International banking ROE at 16% is ahead of plan, with further improvement targeted, especially in Latin America and the Caribbean, despite potential headwinds from U.S. rate cuts.

• GBM segment has achieved 14% ROE, with potential for further gains if market conditions remain favorable.

Canadian banking and mortgage strategy

• Mortgage growth is strong at 5% year-over-year, driven by the Mortgage Plus product, which encourages multi-product relationships and higher deposit balances.

• Mortgage Plus clients have significantly higher checking and savings balances, supporting margin expansion and primacy strategy.

• Loan-to-deposit ratio in Canadian banking has improved from 136% to around 117%, with a long-term goal of 115–120%.

• Commercial loan growth was flat but is expected to pick up in H2 2024, with strong pipelines and sector diversification.

• Mortgage Plus is being adopted by competitors, seen as validation of its success.

Credit quality and risk management

• Credit quality is expected to improve in H2 2024 due to better roll rates and enhanced collections, with macroeconomic factors closely monitored.

• Auto loan portfolio is stable, with prime auto performing well and near-prime book managed conservatively.

• Stress testing and scenario analysis are ongoing, with manageable exposure to oil price shocks and private credit.

• Private credit exposure is limited and focused on mid-market commercial and corporate, with strong underwriting and collateral standards.

• No current signs of stress from macro events, but vigilance remains high.