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Scotiabank 2025 Annual Meeting of Shareholders 0 Remarks BY SCOTT THOMSON, PRESIDENT AND CEO APRIL 8, 2025 Check against delivery
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1 SCOTT THOMSON President and Chief Executive Officer, Scotiabank Good morning, Halifax! And good morning to all of our shareholders that are tuning in from across the globe. This is the first time the Bank of Nova Scotia has taken its annual meeting on the road since the pandemic, and I cannot think of a more fitting location to host it than here in Halifax—the city where our story began. As past CEO Cedric Ritchie said during our AGM in 1975: “It is the tradition of the sea that a ship must return to her home port periodically, to report to her owners on the results of her latest voyage and trading activities. So it is this morning that the Bluenose of Canada’s banking fleet drops anchor in her historic home port of Halifax.” Our history in this region goes back nearly 200 years. A group of merchants were frustrated that the only other financial institution in Halifax was a private bank that could not meet their needs. So with a handful of staff, we opened our first branch in 1832 just down the road from here at the corner of Duke and Granville. By the late 1800s we expanded into New Brunswick, PEI, and Newfoundland & Labrador. Our journey has since taken us across the world, as we followed our clients to where they wanted to trade and transact—into the US, the Caribbean, Latin America, and beyond. But even with all of our growth and expansion, the Bank of Nova Scotia has never shied away from its Atlantic roots. This is our home.
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2 Our vision is to be our clients’ most trusted financial partner, and today thousands of Scotiabankers proudly represent our Bank in Atlantic Canada, serving more than 950,000 clients in one of our nearly 100 branches across the region. Or in our offices—as advisors, corporate and commercial bankers, and portfolio managers. And in our Client Experience Centre at Scotia Square, which employs more than 450 people in Halifax that are serving clients across the country. Our Client Experience Centre is an anchor of our Atlantic footprint, and I am proud to share that we are making a long-term investment in the facility, to fully modernize and transform it into a multi-purpose campus that will house as many as 800 employees across our business. Through this commitment, as well as an additional investment to increase the footprint of our Wealth Management Office at Purdy’s Wharf, we are continuing to support growing employment in the region. Our Client Experience Centre is just one of our unique differentiators in Atlantic Canada—another being our Corporate and Investment Banking Office. We are the only one of our peers with such an office locally. It is one of the reasons that we hold such a strong position in the market and maintain relationships with the ten largest TSX-listed companies in the region, providing advice and services to help them thrive. I spent yesterday evening with 100 business leaders representing some of our biggest clients in Atlantic Canada—many of whom are longstanding, with relationships that go back generations. Clients like Sobeys, who have been with Scotiabank since we lent Frank H. Sobey the money to buy a load of potatoes and expand his business 100 years ago, after no other lender would do so. That deal helped launch Sobeys’ journey towards becoming one of Canada’s great retail success stories, and formed the foundation of an enduring relationship that has only grown throughout the last century. Today Sobeys, and parent company Empire, are amongst the Bank’s closest partners, as we co- founded and co-own our best-in-class loyalty program, Scene+, which has created immense value for clients of both of our businesses. Coming out of last night, I was inspired by how committed this group of business leaders is to the success of Atlantic Canada, energized about its continued potential, and fiercely passionate about this place they call home. And we are here with them, every step of the way.
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3 Beyond our clients, we are also investing deeply in helping Atlantic Canada thrive, through initiatives that drive economic resilience in communities across the region. You may have recently seen new signage being hoisted up the side of the Scotiabank Centre. We are proud to have renewed our partnership to support the next era of best-in-class sports, entertainment, and community programming that the Centre has become known for. Yesterday, we brought together local community leaders for our sixth ScotiaRISE Summit, to discuss how we can support a stronger Atlantic Canada through our community programs. Over the last four years, we have made nearly $11 million in community investments in the region, and we are increasing our support for 2025. This includes a new partnership with Dalhousie University to help establish a first-of-its-kind College of Digital Transformation that will drive greater inclusion and opportunity within high-demand technology fields. It also includes our partnerships with Hope Blooms to develop youth entrepreneurial skills; the Mi’kmawey Debert Cultural Centre’s Emerging Creators Program; and our deeply rooted partnership with the United Way Maritimes. And, our partnership with the QEII Health Sciences Foundation, which connects educated newcomers working in healthcare and their families with resources to help them settle in their new communities in Nova Scotia. We are investing in Atlantic Canada because we see the opportunity and potential here. We see the region’s key position in a more connected Canada. And we see the important role the Atlantic Region plays in our own strategy that we unveiled just over a year ago. To deliver on our vision to be our clients’ most trusted financial partner and drive sustainable and profitable growth, our strategy centres on redeploying capital into North America, with a focus first on Canada. As well as making important investments to deepen our relationships with our clients, to get to know them better, and to help them thrive. This has certainly been a year of progress for the Bank. Our North Star continues to be earning primary clients and growing deposits. 30% of our Canadian retail clients are now primary, having added more than 200,000 since we launched the strategy.
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4 This is being driven by programs like Scene+, which has grown to 15 million members, with 25% of Scene+ members now having a Scotiabank payment product. And Mortgage+, which combines your mortgage with other Scotiabank products to provide clients with preferred rates, and now accounts for nearly 90% of new mortgages. Beyond our Canadian retail bank, our Canadian Wealth business delivered double-digit earnings growth last year. The Canadian Wealth business reached an all-time high in client satisfaction, and delivered 30% more financial plans to our clients, on the back of investments that we are making in talent and in our offering. Client referrals across our Canadian retail, commercial, and wealth businesses grew to $13 billion last year, while retail deposits and retail investments grew 6% year-over-year. Alongside Indigenous partners, we also launched Cedar Leaf Capital—Canada’s first majority Indigenous-owned investment dealer—which is uniquely positioned to foster greater Indigenous participation in Canadian capital markets, and is reflected within Scotiabank’s first Truth & Reconciliation Action Plan that we released this past year. All of this is indicative of the focus that we are putting on our home market of Canada, and the results that we are beginning to see. Canada is at the heart of our strategy, and our success here sets us up for success across the larger continent. In our Global Banking and Markets business in the US, we are optimizing capital and building out our ancillary business capabilities, to deliver more for our clients. Just this past quarter, Global Banking and Markets delivered a very strong start to the year, with earnings up 33%. We recently took a 14.9% stake in KeyCorp, a leading US regional bank. This investment is a cost-effective, high-return, and low-risk way to deploy capital into the United States while contributing to our earnings growth. When we introduced our strategy, we also committed to optimizing our International business, including turning around or divesting those markets that had been underperforming. To that end, we recently announced the transfer of our banking operations in Colombia, Costa Rica, and Panama to regional bank Davivienda, for 20% ownership in the newly combined entity. The work we have done over the last two years in managing our capital, improving our balance sheet metrics, and responsibly building allowances has set a solid foundation for the Bank.
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5 Since the end of 2022, we have: • Improved our capital ratio by approximately 140 basis points; • Built approximately $1.6 billion in additional allowances for potential loan losses, adding almost 350 million to our allowances this past quarter alone; and, • Significantly improved our liquidity ratios. I want to take a moment to recognize that the changes we have been making at the Bank to deliver profitable and sustainable growth have not been easy. In pursuit of our goals, we have asked our teams to collectively rethink our priorities, and relentlessly and efficiently pursue them to create better results for our clients, our shareholders, and each other. We started down this path over a year ago—steady and consistently—knowing that this was a multi- year endeavour. We closed out last year with a total shareholder return of 35%—fourth amongst the Big Six Canadian banks, which is a significant improvement relative to the last ten years. We are committed to our journey—we are doing what we said we would do—and we are now realizing the benefits. We have not made knee-jerk reactions in the face of evolving macroeconomic conditions. We have not changed course. We continue on confidently, even in these volatile times. It is on the back of this discipline and balance sheet strength that we find ourselves well-positioned for today. --- Canada stands at a pivotal moment in time that will test its commitment to this country’s future and to the next generation of Canadians. If there is a silver lining to today’s uncertainty, it is that it has driven a conversation around Canada’s economic potential and the kind of country we want to be. It has become abundantly clear that for too long Canada has let its own growth and productivity stagnate, and the country now finds itself at a crossroads.
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6 Much like the journey Scotiabank recently undertook to chart its new strategic direction, Canada must focus on building the capacity and means to grow, without relying solely on external relationships that the country has perhaps taken for granted. Canada needs a Growth-First agenda. With more exports going to the United States alone than moving between provinces within our own borders, dismantling barriers that prevent goods and services from crossing our own economic union is essential to executing on such an agenda. I have to applaud Premier Houston, who was one of the first to come out strongly on this issue, with Nova Scotia leading the way across the country to tear down these economic walls. Studies indicate that trade barriers add between 8% and 15% to the cost of goods sold across the country. And lowering these barriers could increase per capita GDP by $3000-5000. A more interconnected Canada is important because from coast-to-coast-to-coast, ours is a country that is blessed with an abundance of natural resources, a highly educated population, robust governance, and a strong, stable financial system. Canada consistently ranks highly amongst its peers on quality of life, and is considered to be one of the most desirable places to live for highly educated workers. The world needs—and wants—what Canada has, and yet Canada’s economic potential is massively underdeveloped and unrealized. Growth-First means unlocking Canada’s natural resources, which have the potential to give the country a unique place on the world stage as trading partners seek more secure supply lines. This includes critical minerals, which are an essential component of much modern-day manufacturing. Yet the vast majority of production of critical minerals is concentrated in a small handful of countries with opaque governance, which the world relies on for the security of their economies and consumers. Canada, by contrast, has rich endowments of critical minerals, with the potential to be a major player as global demand is expected to double by 2040. Here in Atlantic Canada alone, the Atlantic Economic Council recently identified 17 critical mineral projects that could lead to several billion dollars of construction activity, create thousands of jobs, and offer revenues and security to future generations of Atlantic Canadians. In recent years, European leaders have said that Canada is their preferred resource partner, yet our critical mineral exports to the EU are only a fraction of our US exports.
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7 Canada accounts for roughly a third of the world’s reserves and production of potash—the largest of any nation. Used as an agricultural fertilizer, global demand for potash is only expected to grow alongside increasing demand for food, and Canada can be the secure, stable supplier of what the world needs. Canada has the world’s largest deposits of high-grade uranium ore, and is the second largest producer of uranium globally, accounting for 13% of global output. This is at a time when the International Energy Agency estimates that installed nuclear generation capacity could grow by 80% within the next twenty-five years. In fact, Canada holds reserves of all 34 minerals identified by the federal government as critical. It is clear that Canada has in abundance what the world needs—but it will take massive investment, and a clear path to enable that investment, to fully assert its position as a natural resource powerhouse. Nowhere is the challenge more obvious than in the energy sector. The failure to get the Northern Gateway pipeline built has been well-documented, and is a clear example of the shortsighted policymaking that has led to Canada’s current predicament. Natural gas is another area where Canada can and should be a global leader, making a product that delivers energy affordability, energy security, economic growth, and lower emissions relative to other fossil fuels. For those trading partners around the globe that want to diversify their supply, Canada’s gas is produced in one of the most secure, stable, and trade-friendly jurisdictions in the world. Canada’s production and environmental standards are amongst the highest in the world, regulated by institutions that ensure industry practices are monitored, measured, verified, and authenticated. Yet if we look back at Canada’s efforts over the past decade or so, it is valuable to compare ourselves to the United States. Both countries had strong visions about the role they could play in energy security beyond their borders, and the impact LNG could have in supporting an orderly energy transition while creating economic growth. Fast forward to today, and the US has eight LNG export facilities in service with nearly two dozen more in the pipeline. They are capable of exporting some 14 billion cubic feet per day of LNG to places like the Netherlands, France, Japan, and South Korea, with billions more in capacity poised to come online in the coming years.
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8 The US natural gas industry employs more than 220,000 workers and contributed nearly $45 billion to the American economy last year, while helping global partners move rapidly off thermal coal in exchange for a more emissions-friendly option. By contrast, in the face of red tape and regulatory obstacles, Canada has not yet put a meaningful export terminal into service. There are seven projects in various stages of development that could collectively represent more than $100 billion in investment if fully advanced and realized, including a new plant in Kitimat that is expected to start shipping LNG to global markets later this year. But with vast untapped reserves, this is only a fraction of Canada’s potential. For the benefit of Canada’s economic growth and security today, and the world’s energy security tomorrow, Canada needs to create the conditions to build big infrastructure, like pipelines and LNG facilities, faster and more efficiently. But Growth-First is about more than just the resources that we can pull out of the ground. Canada faces a near-insatiable appetite for electricity, and alternative energy sources including renewables, as the country pivots towards a more sustainable economy. The federal government’s Electricity Advisory Council has estimated that the demand for electricity will double above current levels in Canada over the next two decades. Yet the obstacles to meeting this growing appetite are significant. Canada’s transmission network is well-connected to the United States, but our provincial and territorial electricity systems remain largely siloed from one another. Atlantic Canadians know well the challenges of inter-provincial transmission. The recent Newfoundland and Quebec power agreement is a significant milestone, but even it will require substantial infrastructure investments to realize. Building the infrastructure required to meet Canada’s growing needs will mean investing $55 billion— roughly double today’s investment—every year for the next twenty-five years, with half earmarked to transmission infrastructure to bring power to where it will be required. The good news is that 80% of Canada’s electricity is already emissions-free, like the 102-megawatt South Canoe Wind Project—the largest operating wind farm in Nova Scotia—which the Bank of Nova Scotia helped to finance. The majority of clean tech projects in Canada are in the energy sector, with three out of every five energy projects planned or underway classified as clean technology.
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9 The country is also a leader in carbon management, with the third most active projects in the world. The recently announced two-billion-dollar partnership between Strathcona Resources and the Canada Growth Fund, to capture and permanently store up to two million tonnes of carbon dioxide annually, is a great example of the innovative work underway here. Strathcona is an entrepreneurial success story that is responsibly developing Canada’s resources, creating jobs for Canadians, and contributing royalties and taxes to governments across the resource value chain, and Scotiabank is a strong supporter of the work they are doing. However, to meaningfully reduce Canada’s emissions over time, carbon capture will need to double or triple in capacity above what is already planned and announced in the country. If done right, Canada could be a global hub for investment, technology, and expertise, but it will take significant investment in infrastructure, growing the skilled workforce, and finding efficiencies in constructing new projects to get there. --- I am not alone in advocating for a Growth-First agenda that leverages Canada’s economic strengths for maximum impact. Canada is facing one of the most consequential economic and existential challenges that it has faced in its 158-year history. This is no mere inflection point—this is something bigger. The country cannot afford to stand still, to wait to see where the chips will fall, and then react. Our Scotiabank Economics team recently proposed that Canada’s political leaders—those competing today to be the next Prime Minister—should commit to raising real GDP per capita growth by 2% annually on a sustained basis. Put into more tangible terms, this would translate into higher real incomes for households: roughly $1200 per person, or almost $5000 over a four-year period. Think about what that could mean for those families working hard to make ends meet here in Atlantic Canada. Our governments have spent the past decade investing deeply in this country’s human capital—but now is the time to be equally ambitious in physical capital. This includes addressing the real obstacles that stand in the way of big infrastructure projects: high cost, long timelines, an immense regulatory burden, unpredictable policymaking, a lack of government guarantees, and important Indigenous rights considerations—to name a few.
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10 If Canada hopes to compete on the world stage, we need to be able to build faster, create the conditions to get resources to tidewater, and export them to foreign markets that are looking for energy and resource security. We need to lay down a more integrated, sustainable, and future-ready electricity grid that connects all corners of the country, to move clean energy from provinces with a surplus to provinces that need it, and ease the path towards decarbonization. This would be a national project not just for today, but for the future—benefitting generations to come. I also recognize that as banks, we must play an important and constructive role in driving forward Canada’s Growth-First agenda. We are economic engines and financiers of first-resort, drivers of prosperity in good times and bulwarks in bad. We need to be advocates for policy that works, and vocal about policy that does not. And we need to be there to support our producers, our manufacturers, our builders, and our innovators in creating good jobs, building affordable homes, producing what the world needs, and getting those goods to global markets. For our part—and I say this to our clients, to our political leaders, and to all of our stakeholders—if you propose it, if you plan it, and if it makes good economic sense, we will help you drive it forward. We are here to help move the needle—whether through our balance sheet, through our partnerships, or by leveraging the relationships that we are building through Cedar Leaf Capital to help facilitate solutions that bring all stakeholders and rightsholders on board. This year we will be working with key clients, sectors, and industries to collectively and relentlessly focus on a new economic trajectory for Canada. In the new economy, every business needs to be thinking about getting better, faster, and more efficient—so this includes working with our clients in all sectors, big and small, that are committed to growing their productivity. And helping clients on all sides of the border manage through this uncertain time. We will also be discussing how we can better leverage our own community investment portfolio to help address both the challenges of today and those posed by greater economic growth—such as supporting people through economic shocks, or providing wraparound support for those whose hard work will power the construction of our massive infrastructure needs. This is a time for big ambitions.
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11 Growth-First means Canada, and Canadians, need to deliver urgently, collaboratively, and in alignment. The solution is certainly greater than Scotiabank alone, but you can be sure that we are here to play our part. --- Closing out my remarks today, I want to take a moment to thank you, our shareholders, for your confidence in our Bank and in our management team as we have executed on our new strategy. You have continued to stand by the Bank of Nova Scotia, and we are committed to delivering for you. We recently introduced a new culture framework for our Bank, our ScotiaBond, with the core values and key behaviours needed to help us build a strong future for our clients, shareholders, and Scotiabankers globally. Because while we cannot predict the future—and recent events certainly demonstrate that—we can ensure that our Bank is ready for every future. Reflecting again on Ritchie’s comments 50 years ago, he told shareholders that: “Storm clouds are already rolling on the horizon, but this doesn’t faze anyone living on or by the sea. This is the way it has always been and always will be. Notwithstanding the roughness that may await us, the combined strengths of a strong ship and a sturdy crew will win out in the end for you, the owners.” Long-term sustainable growth does not happen overnight. But with inclusion as our bond, and 90,000 Scotiabankers lined up behind a shared vision, we will get it done. This is a belief that Scotiabankers—here in Atlantic Canada and across our global footprint—have held throughout our nearly 200-year history. And it is one that we continue to hold today, as we look ahead to the next 200 years. Thank you.
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Scotiabank 2025 Annual Meeting of Shareholders 12