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Grupo Scotiabank reports third quarter earnings

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Grupo Scotiabank reports third quarter earnings Powered By Docstoc
					Q3
FINANCIAL HIGHLIGHTS

               THIRD QUARTER REPORT
2009

Grupo Scotiabank reports third                                                     Third quarter financial results
quarter earnings                                                                   compared to the same period a
                                                                                   year ago:

Mexico D.F., October 30, 2009 – Grupo Scotiabank today announced                   – Total Revenue of P$3,239
results for the third quarter of 2009. Consolidated net income was P$592           million up from P$3,167 million
million, compared to P$755 million in the same quarter last year.                  – Net income of P$592 million
Continued underlying mortgage growth, higher non-interest income and               versus P$755 million
lower provisions for credit losses were more than offset by the impact of          – Productivity ratio of 65.5%
falling market rates on interest income, higher expenses and a higher
                                                                                   versus 61.8%
effective tax rate.
                                                                                   – Capital ratio remains strong at
The Group continued to record robust asset growth. Mortgage volumes                16.5% versus 16.6%
grew 16% compared to the same quarter last year. Continued
improvement of the Group’s funding mix was fuelled by a strong 13%
increase in demand and savings deposits reflecting the Bank’s continued
emphasis on growing its core deposit base, supported by innovative
products and high quality service to customers. Despite increases in the           Scotiabank Mexico - Selected
above assets and liabilities, net interest income was impacted by a steep          financial and operational indicators:
decrease in market interest rates.
                                                                                       1     CONTINUED GROWTH:
Other income, compared to the same period last year, was up P$86
million or 6%, due primarily to higher foreign exchange revenues and
higher mutual fund and insurance fees.                                                    Mortgage balances up 16%
                                                                                          Demand and Savings account
Loan loss provisions declined for the third straight quarter with a decrease               balances up 13%
of P$85 million or 12% from the comparative period last year due to the
Bank’s proactive management of its loan portfolios. Expenses increased
P$216 million or 10%, due largely to further investments in proactive                  2
collections management and information technology.                                           CREDIT RISK MANAGEMENT:

The Bank’s capital ratio remained strong at 16.5%, enabling continued                     Past due portfolio at 3.8% of total
pursuit of strategic growth initiatives. Return on equity was 9%, due partly               loans
to the Group’s strong capital levels.                                                     Allowance for credit losses at
                                                                                           109% of past due portfolio
“Despite headwinds, our third quarter results are up from the last two                    Three consecutive quarters of
quarters. We are pleased to report that continued growth in strategically                  falling credit provisions
identified segments and our investment in people and technology within
the collections space have helped to produce a third consecutive quarter
of lower loan losses. We will continue to actively manage our balance                       EFFICIENCY:
sheet for quality asset growth and sustainable low cost funding
opportunities, and maintain the proactive management of our loan                          Productivity ratio of 64.3%
portfolios. We continue to work closely with our customers to help them
manage their debt load and payment capacity during challenging times.”
said Nicole Reich De Polignac, Grupo Scotiabank President and CEO.




                                                                            Grupo Scotiabank – 2009 Third Quarter Report    1
FINANCIAL HIGHLIGHTS



Non-Financial Highlights:

Scotiabank Mexico was ranked 23rd among the 40 most sustainable and best governed financial institutions in
Latin America by Management and Excellence and Latin Finance. This ranking reflects adherence to
international standards of governance and sustainability.

Scotiabank Mexico was also recognized as one of the top 36 companies for women to work in Mexico by Mujer
Ejecutiva and the Great Place to Work Institute.




                                                                  Grupo Scotiabank – 2009 Third Quarter Report   2
FINANCIAL HIGHLIGHTS



Grupo Scotiabank
                                                              Nine months ended                                        Three months ended
Condensed Financial Information
                                                        September 30,         September 30,            September 30,           June 30,         September 30,
                                                            2009                  2008                     2009                  2009               2008
Net Income (P$ millions):
Scotiabank Mexico                                               1,365                 2,477                      558                359                   758
Holding company and other subsidiaries                             87                   123                       34                 13                    (3)
Total Group                                                     1,452                 2,600                      592                372                   755

ROE                                                               7%                   14%                       9%                 6%                   12%

Grupo Scotiabank
                                                              Nine months ended                                        Three months ended
Condensed Statement of Income
( P$ millions; Consolidated with subsidiaries)          September 30,         September 30,            September 30,           June 30,         September 30,
                                                            2009                  2008                     2009                  2009               2008
Net Interest income                                           7,045                  6,597                    2,307               2,259                2,406
Other income                                                  4,179                  4,983                    1,540               1,104                1,454
Revenue                                                      11,224                 11,580                    3,847               3,363                3,860
Provision for credit losses                                  (2,331)               (1,896)                    (608)               (687)                (693)
Total revenue                                                 8,893                  9,684                    3,239               2,676                3,167
Operating expenses                                           (6,840)               (6,382)                  (2,410)             (2,216)              (2,194)
Profit before income tax                                      2,053                  3,302                      829                  460                 973
Income tax                                                     (604)                 (756)                    (241)                 (72)               (229)
Participation in results of subsidiaries and
                                                                     3                  54                         4               (16)                    11
associated companies
Profit after income tax                                         1,452                 2,600                      592                372                   755




 Grupo Scotiabank is a member of the Scotiabank family. Scotiabank is one of North America’s premier financial institutions and Canada’s
 most international bank.

 Grupo Scotiabank is one of the leading groups in Mexico, with 660 branches and 1,464 ATMs throughout Mexico. It employs approximately 9,190
 people in its main subsidiaries: Scotiabank Mexico, Scotia Fondos, Scotia Casa de Bolsa and Scotia Afore. Together these companies offer an
 extensive range of financial products and services for individuals, small businesses and multinational corporations.

 See Scotiabank Mexico at: www.scotiabank.com.mx

Shares held by
Grupo Scotiabank                                                                                     Scotiabank Mexico                     99.9999%
                                                                                                     Scotia Casa de Bolsa                  99.9864%
                                                                                                     Scotia Fondos                         99.9999%
                                                                                                     Scotia Afore                          99.9999%

Grupo Scotiabank, Scotiabank, Scotia Casa de Bolsa, Scotia Fondos and Scotia Afore are the trade names of, respectively, Grupo Financiero Scotiabank Inverlat,
S.A de C.V.; Scotiabank Inverlat S.A.; Scotia Inverlat Casa de Bolsa S.A. de C.V.; Scotia Fondos S.A. de C.V. and Scotia Afore S.A. de C.V.




                                                                                                     Grupo Scotiabank – 2009 Third Quarter Report                3
                                                                                      MANAGEMENT'S DISCUSSION & ANALYSIS


                                                                                                              October 30, 2009
Scotiabank Mexico

Total revenue was P$3,030 million for the third quarter of 2009, a P$71 million or 2% increase from the same period last
year, and P$583 million or 24% higher than last quarter. The period-over-period increase was due primarily to higher
foreign exchange revenues (in other income) and lower provisions for credit losses. The increase from last quarter was
due largely to last quarter’s loss on sale of a portion of the Bank’s credit card portfolio to a related regulated financial
company, and because of higher interest income and lower provisions for credit losses this quarter.

Pre-tax income was P$795 million this quarter, P$154 million or 16% below the same period last year. This decline was
mainly attributable to lower net interest income and higher expenses, which were partially offset by higher non-interest
revenues and lower provisions for credit losses. The P$375 million or 89% increase from last quarter was due primarily to
lower loan loss provisions and the impact, last quarter, of the aforementioned portfolio sale.

After-tax income was P$558 million this quarter compared to P$758 million for the same period last year. The decline
reflects higher expenses and a higher effective tax rate this quarter, partially offset by lower provisions for credit losses.
After-tax income increased P$199 million from last quarter, and was largely explained by the aforementioned portfolio
sale.

For the nine-month period ended September 30, 2009, after-tax net income was P$1,365 million, compared to P$2,477
million in the same period last year. Higher net interest income was more than offset by the impact of the prior portfolio
sale, the gain on the Mexican Stock Exchange IPO recognized in June 2008, higher provisions for credit losses, higher
expenses and an increase in the effective tax rate.

Scotiabank Mexico
Condensed Statement of Income                       Nine months ended                      Three months ended
(P$ millions; Consolidated with subsidiaries   September 30,   September 30,    September 30,    June 30,     September 30,
and UDI trust)                                     2009            2008             2009           2009            2008
Interest earned                                     11,199          12,991             3,055       3,577           4,632
Interest paid                                       (4,329)         (6,587)            (783)      (1,385)         (2,276)
Net interest income                                   6,870          6,404             2,272       2,192           2,356
Other income                                          3,690          4,416             1,366          942          1,296
Revenue                                             10,560           10,820            3,638       3,134           3,652
Provision for credit losses                         (2,331)         (1,896)            (608)        (687)          (693)
Total revenue                                         8,229          8,924             3,030       2,447           2,959
Operating expenses                                  (6,319)         (5,856)          (2,235)      (2,027)         (2,010)
Profit before income tax                              1,910          3,068               795          420            949
Income tax                                            (545)           (641)             (239)          (44)         (200)
Participation in results of subsidiaries and
                                                         -              50                2           (17)           9
associated companies
Profit after income tax                              1,365           2,477              558           359          758


Net Interest Income

Net interest income was P$2,272 million for the third quarter of 2009, down P$84 million or 4% from the same quarter
last year, but up P$80 million or 4% from last quarter. The decline from the same period last year was driven by a lower
interest rate environment this quarter. The increase from last quarter was due largely to higher volumes and one additional
day this quarter.

For the nine months ended September 30, 2009, net interest income was P$6,870 million, an increase of P$466 million or
7% from the same period last year. This increase reflects the year-over-year growth of the mortgage portfolio, and the
continued growth of low cost deposits.

                                                                               Grupo Scotiabank – 2009 Third Quarter Report   4
                                                                                              MANAGEMENT'S DISCUSSION & ANALYSIS


Net interest income continues to be negatively affected by the funding cost of certain investments (classified in Other
Assets), for which revenue is recognized in other income.

Based on the Bank’s overall cost of funds, the interest spread on earning assets was as follows:
Scotiabank Mexico                                                            Nine months ended
Analysis of Interest Income                                  September 30, 2009                September 30, 2008
(Accumulated average)                                     Volume            Spread           Volume           Spread
Deposits with banks                                         20,787                   1.2%                   19,425            2.6%
Securities                                                  14,856                   2.4%                   12,807            4.7%
Loans                                                       93,501                   8.7%                   90,599            8.1%

Other Income

Scotiabank Mexico
                                                        Nine months ended                             Three months ended
Other Income
(P$ millions; Consolidated with subsidiaries and   September 30,     September 30,          September 30,       June 30,   September 30,
UDI trust)                                             2009              2008                   2009              2009         2008
Commissions and fees (net)                               1,515             1,522                    500              472           504
Revenues from trading and intermediation                   626               547                    140              261            (1)
Other revenues and expenses (net)                        1,564             1,690                    558              482           487
Other operational income (net)                            (15)               657                    168            (273)           306
Total Other Income                                       3,690             4,416                  1,366              942         1,296


This quarter’s other income was P$1,366 million, up P$70 million or 5% from the same period last year. Higher income
from intermediary financial instruments (primarily interest rate swaps) and foreign exchange revenues (in revenues from
trading and intermediation) and higher mutual fund and insurance fees (in other revenues and expenses (net)) were
partially offset by lower recoveries (in other operational income (net)). The P$424 million or 45% increase from last
quarter was due primarily to the loss of P$371 million pre-tax recorded last quarter on the sale of a portion of the Bank’s
credit card portfolio.

For the nine-month period ended September 30, 2009, other income was P$3,690 million, a P$726 million decline from
the same period last year. The decline arose mainly from the aforementioned loss on sale of the credit card portfolio (in
other operational income (net)) and the Mexican Stock Exchange IPO gain recognized in the comparative period last year
(in other revenues and expenses (net)).

Scotiabank Mexico
                                                        Nine months ended                             Three months ended
Commissions and fees (net)
(P$ millions; Consolidated with subsidiaries and   September 30,     September 30,          September 30,       June 30,   September 30,
UDI trust)                                             2009              2008                   2009              2009         2008
Loan commissions                                            82               110                     27               27            34
Account handling commissions                               191               213                     63               64            72
Credit card commissions                                    489               643                    153              156           225
Trust                                                      182               168                     61               60            56
Electronic banking                                         223               187                     73               79            64
Other                                                      348               201                    123               86            53
Total commissions and fees (net)                         1,515             1,522                    500              472           504

Net commissions and fees were P$500 million this quarter, relatively unchanged from the same period last year but up
P$28 million or 6% from last quarter. The quarter-over-quarter increase was due largely to fees related to loans to
corporate customers (in other).

On a year-to-date basis, total commissions and fees remained relatively unchanged.




                                                                                      Grupo Scotiabank – 2009 Third Quarter Report         5
                                                                                             MANAGEMENT'S DISCUSSION & ANALYSIS


Scotiabank Mexico
                                                           Nine months ended                         Three months ended
Other revenues and expenses (net)
(P$ millions; Consolidated with subsidiaries and      September 30,   September 30,        September 30,   June 30,   September 30,
UDI trust)                                                2009            2008                 2009          2009         2008
Recoveries                                                     541            601                   180         171           157
Other income (net)                                           1,071          1,172                   394         343           352
Rental income                                                   43             32                    16          13            10
Write-offs, write-downs and other charges                     (91)          (115)                  (32)        (45)           (32)
Total other revenues and expenses (net)                      1,564          1,690                   558         482           487

Other revenues and expenses were P$558 million this quarter, an increase of P$71 million or 15% from the same quarter
last year and P$76 million or 16% above last quarter. These increases were driven largely by higher recoveries, and higher
mutual funds and insurance revenues (in other income (net)).

For the nine-month period ended September 30, 2009, other revenues and expenses of P$1,564 million were down P$126
million or 7% from the comparative period one year ago. The period-over-period decrease was due primarily to the gain
on the Mexican Stock Exchange IPO recorded last year (in other income (net)).

Scotiabank Mexico
                                                           Nine months ended                         Three months ended
Other operational income (net)
(P$ millions; Consolidated with subsidiaries and      September 30,   September 30,        September 30,   June 30,   September 30,
UDI trust)                                                2009            2008                 2009          2009         2008
Loan loss recoveries                                           300            647                   123          88           285
Loss on sale of loan assets                                  (371)               -                    -       (371)              -
Revenue from sale of repossessed assets                         86             27                    62          18             28
Other                                                         (30)           (17)                  (17)         (8)            (7)
Total other operational income (net)                          (15)            657                   168       (273)           306

Other operational income of P$168 million this quarter was down P$138 million from the same quarter last year but up
P$441 million from last quarter. The decrease from the same period last year was mainly from higher revenues from the
sale of repossessed assets being more than offset by lower recoveries. The increase from last quarter was due primarily to
the impact, last quarter, of the loss on sale of a portion of the Bank’s credit card portfolio.

For the nine-month period ended September 30, 2009, other operational income was negative P$15 million, down P$672
million from the comparative period last year. This decrease was due largely to the loss on sale of a portion of the Bank’s
credit card portfolio recorded this year as well as lower loan loss recoveries.

Provision for credit losses

Scotiabank Mexico
                                                           Nine months ended                         Three months ended
Provision for credit losses (net)
(P$ millions; Consolidated with subsidiaries and      September 30,   September 30,        September 30,   June 30,   September 30,
UDI trust)                                                2009            2008                 2009          2009         2008
Provision for credit losses                                (2,331)         (1,896)               (608)        (687)         (693)
Loan loss recoveries (reported in Other operational
                                                             300               647                123          88            285
income, net)
Total provision for credit losses (net)                    (2,031)         (1,249)               (485)        (599)         (408)

Following new guidelines on credit cards provisioning published by the CNBV, a one-time charge of P$265 million was
applied against retained earnings this quarter.

Provisions for credit losses, net of recoveries, were P$485 million this quarter, up P$77 million from the same quarter last
year. Excluding recoveries, provision for credit losses were P$608 million, a decrease of P$85 million or 12% from the
same quarter one year ago. This decrease was due to lower retail delinquencies, primarily in credit cards, and to lower
commercial provisions this quarter.



                                                                                      Grupo Scotiabank – 2009 Third Quarter Report    6
                                                                                                                MANAGEMENT'S DISCUSSION & ANALYSIS

Provisions for credit losses, net of recoveries, were down P$114 million or 19% from last quarter. Excluding recoveries,
provisions for credit losses decreased P$79 million or 11% from the previous quarter. The decrease was due to lower
retail provisions in all products following the implementation of restructuring and support programs, partially offset by
higher releases, last quarter, of commercial provisions no longer required.

On a year-to-date basis, net provisions for credit losses increased P$782 million, due largely to higher retail delinquencies
and lower recoveries.

In response to the prevailing economic environment, the Bank is continuing to proactively manage its loan portfolios,
closely working with its customers to help them manage their debt load and payment capacity.

Non-Interest Expenses

The productivity ratio (refer to Note 1), a measure of the Bank’s efficiency, was 64.3% this quarter, up from 60.2% in the
same quarter last year but down from 67.0% last quarter. On a year-to-date basis, the Bank’s productivity ratio was
62.0%, compared to 57.8% for the same period last year. When excluding one-time items in both comparative periods, the
Bank’s productivity ratio remained relatively unchanged.

 Scotiabank Mexico
                                                                     Nine months ended                                   Three months ended
 Non-Interest Expenses
 (P$ millions; Consolidated with subsidiaries and             September 30,         September 30,            September 30,        June 30,       September 30,
 UDI trust)                                                       2009                  2008                     2009               2009             2008
 Personnel expenses                                                (2,881)               (2,713)                    (986)            (909)              (909)
 Other operating expenses                                          (3,438)               (3,143)                  (1,249)          (1,118)            (1,101)
 Total non-interest expenses                                       (6,319)               (5,856)                  (2,235)          (2,027)            (2,010)

Non-interest expenses were P$2,235 million this quarter, up P$225 million from the same quarter last year and P$208
million from last quarter.

Compared to the same quarter last year, personnel expenses were up P$77 million or 8%, reflecting higher salaries and
benefits from staffing increases in the Collections and IT areas. During the same period, other operating expenses
increased P$148 million or 13%, mainly from higher rental expense, higher professional fees, and information
technology-related expenses.

Personnel expenses of P$986 million this quarter were P$77 million or 8% higher than the previous quarter, due largely to
higher PTU and benefit expenses. Other operating expenses were up P$131 million or 12% from the previous quarter, due
primarily to higher professional fees, advertising and rental expenses.

On a year-to-date basis, total expenses increased P$463 million or 8%, to P$6,319 million. Other operating expenses were
the largest component of the period-over-period increase as lower marketing expenses were more than offset by higher
professional fees and higher deposit insurance and rental expenses.

Participation in results of subsidiaries and associated companies

Participation in results of subsidiaries and associated companies was P$2 million this quarter, down P$7 million from the
same quarter last year. The decline was due in part to the year-to-date impact of an accounting change pertaining to
income recognition recorded this quarter.

For the nine months ended September 30, 2009, participation in the results of subsidiaries and associated companies
decreased P$50 million due primarily to the aforementioned accounting change.



Note 1: Non-interest expenses & PTU as a percentage of the sum of net interest income and other income, excluding loan recoveries. A lower ratio indicates improved
productivity.

                                                                                                      Grupo Scotiabank – 2009 Third Quarter Report                    7
                                                                                          MANAGEMENT'S DISCUSSION & ANALYSIS

Tax

Scotiabank Mexico
                                                        Nine months ended                         Three months ended
Taxes
(P$ millions; Consolidated with subsidiaries and   September 30,   September 30,        September 30,   June 30,   September 30,
UDI trust)                                             2009            2008                 2009          2009         2008
Income tax current                                        (693)           (721)                (319)        (91)          (248)
Income tax deferred                                         148              80                   80          47             48
Total Taxes                                               (545)           (641)                (239)        (44)          (200)


Total income tax expense was P$239 million this quarter, up P$39 million from the same quarter last year. The increase
was due primarily to lower inflation-related adjustments, partially offset by more favourable timing differences this
quarter. Total income tax expense was up P$195 million from last quarter, due largely to more favourable timing
differences being more than offset by higher earnings.

On a year-to-date basis, total income tax expense decreased P$96 million. The decline was due largely to lower earnings
and other favourable timing differences.




                                                                                   Grupo Scotiabank – 2009 Third Quarter Report    8
                                                                                      MANAGEMENT'S DISCUSSION & ANALYSIS

Balance Sheet

As at September 30, 2009, the Bank’s total assets were P$156.8 billion, an increase of P$11.7 billion or 8% from a year
ago and P$5.2 billion or 3% from last quarter. These increases were due primarily to strong mortgage loan growth as well
as higher cash and securities positions this quarter.

Scotiabank Mexico – Condensed Balance Sheet                         September 30,          June 30,          September 30,
(P$ millions; Consolidated with subsidiaries and UDI trust)             2009                2009                 2008
Cash, banks, securities                                                   45,819                 40,067             31,658
Performing loans                                                          94,340                 93,221             97,606
Past due loans                                                              3,757                 4,175              3,159
Allowance for loan losses                                                 (4,084)               (4,039)            (3,319)
Other assets                                                              16,927                 18,100             15,916
Total assets                                                             156,759               151,524             145,020

Deposits                                                                 107,825               105,167             107,600
Loans from bank                                                            4,235                 6,052               5,144
Other liabilities                                                         20,223                16,089               7,548
Capital                                                                   24,476                24,216              24,728
Total liabilities and capital                                            156,759               151,524             145,020



Performing Loans

Scotiabank Mexico – Performing Loan Portfolio                       September 30,           June 30,         September 30,
(P$ millions; Consolidated with subsidiaries and UDI trust)             2009                 2009                2008
  Credit card and other personal loans                                      17,641               17,971             19,810
  Mortgages                                                                 36,897               35,011             31,828
Total personal loans                                                        54,538               52,982             51,638
  Business loans                                                            31,480               32,216             33,493
  Loans to financial institutions                                            3,330                3,675              3,832
  Loans to government entities                                               4,992                4,348              8,643
Total business, financial and government                                    39,802               40,239             45,968
Total performing loans                                                      94,340               93,221             97,606

The Bank’s retail lending portfolio grew P$2.9 billion or 6% from last year. This growth was largely concentrated in the
mortgage portfolio which increased by P$5.1 billion or 16% from the same period last year and P$1.9 billion or 5% from
last quarter. These increases were partially offset by the sale, last quarter, of a portion of the Bank’s credit card portfolio
and lower personal loan balances this quarter, when compared to both comparative periods.
Non-personal loans declined P$6.2 billion or 13% from the same quarter last year and P$0.4 billion or 1% from last
quarter. The decrease from the same quarter last year was due largely to the impact of the securitization of a P$4.3 billion
government loan in October 2008. The decline from last quarter was driven by lower business loan balances this quarter.

Past due loans
Scotiabank Mexico – Past Due Loan Portfolio                         September 30,           June 30,         September 30,
(P$ millions; Consolidated with subsidiaries and UDI trust)             2009                 2009                2008
Past due loans                                                               3,757                4,175               3,159
Allowance for credit losses                                                (4,084)              (4,039)             (3,319)
Net past due loans                                                           (327)                  136               (160)

Past due loans as a percent of total loans                                    3.8%                4.3%                3.1%
Allowance for credit losses as a percent of past due loans                   109%                 97%                105%

Gross past due loans totalled P$3,757 million this quarter, an increase of P$598 million or 19% from the same period last
year, but a P$418 million or 10% decrease from last quarter. The period-over-period increase was due to higher retail

                                                                               Grupo Scotiabank – 2009 Third Quarter Report   9
                                                                                           MANAGEMENT'S DISCUSSION & ANALYSIS

delinquencies, primarily in mortgages, and the classification as past due of a commercial loan last quarter. The decrease
from last quarter was due largely to the benefits of retail loan restructuring initiatives implemented in prior quarters and
mortgage write-offs.

The Bank’s allowance for credit losses increased by P$765 million year-over-year and P$45 million from last quarter. The
year-over-year increase was due largely to higher retail delinquencies in the mortgage portfolio, the aforementioned
classification of a commercial loan as past due and the new regulatory provisions over credit cards, partially offset by
lower delinquencies in credit cards. The increase from last quarter was due primarily to the aforementioned change to
credit card regulatory provisions.

As a percent of past due loans, allowance for credit losses was 109% as at September 30, 2009, up from 105% a year ago
and from 97% last quarter. This increase was partly due to the new provisioning guidelines published by the CNBV for
credit card loans.

At September 30, 2009, the Bank’s past due loan portfolio was 3.8% of the total portfolio compared to 3.1% in the same
quarter last year and 4.3% in the prior quarter. The increase from the same period one year ago was due to higher retail
delinquencies and the aforementioned classification of a commercial loan. The decrease from last quarter largely reflects
the impact of retail loan restructuring programs.

Deposits

Scotiabank Mexico – Deposits                                               September 30,         June 30,        September 30,
(P$ millions; Consolidated with subsidiaries and UDI trust)                    2009               2009               2008
Total demand and saving                                                           54,052             53,435            47,742
  Term deposits from customers                                                    49,425             47,378            53,409
  Money market term deposits (Wholesale)                                             113                140               201
Total term deposits                                                               49,538             47,518            53,610
Investment Certificates                                                            4,235              4,214             6,248
Total deposits                                                                   107,825            105,167           107,600

Demand and saving deposits totalled P$54.1 billion as at September 30, 2009, an increase of P$6.3 billion or 13% over
the same period last year, and up P$0.6 billion or 1% from last quarter. These increases reflect the Bank’s continuing
emphasis on growing its cost-efficient core deposit base, supported by its no-interest no-fees suite of accounts and high
quality service to its customers.

Total term deposits decreased P$4.1 billion or 8% over the same quarter last year, but increased P$2.0 billion or 4% from
last quarter. The annual decline was mainly from the maturity of higher cost deposits. The quarter-over-quarter increase
was primarily concentrated in customer deposits, reflecting the Bank’s focus on offering innovative deposit products to
meet clients’ investment needs.

Investment Certificates were down P$2.0 billion from the same quarter last year and were relatively unchanged from last
quarter. The reduction from the comparative period last year was due to the maturity, in March 2009, of a P$2.0 billion
tranche, which was not renewed due to market conditions and the strong liquidity position of the Bank.




For further information, please contact:
Jean-Luc Rich         (52) 55 5229-2937               jlrich@scotiabank.com.mx
Internet:                                           www.scotiabank.com.mx

                                                                                  Grupo Scotiabank – 2009 Third Quarter Report   10
                                                                                                                            NOTE

Attachment 1 Notes

This document has been prepared by the Group solely for the purposes of providing financial and other information to the
markets. All official information (financial and other) of the Group and its subsidiaries is published in Spanish and is
furnished to the Mexican financial authorities as required under applicable law and regulations. The information (financial
and other) in Spanish published by the Group and its subsidiaries and furnished to the Mexican financial authorities is the
only official information (financial and other) of the Group and its subsidiaries that should be used for purposes of
determining the financial situation of the Group and its subsidiaries.
The information contained herein is based on financial information of each of the entities described herein. Results for any
interim period are not necessarily indicative of results that maybe achieved for a full fiscal year or any other interim period.
The financial information contained herein has been prepared in accordance with accounting principles and regulations
issued by the National Banking and Securities Commission. The foregoing regulations and accounting principles may
differ from each other and from generally accepted accounting principles established by the Mexican Institute of Public
Accounting (“Mexican GAAP”). Such accounting practices and principles also differ from generally accepted accounting
principles and U.S. Securities and Exchange Commission guidelines applicable to such institutions in the United States of
America (“U.S. GAAP”). No reconciliation to U.S. GAAP of any of the financial information contained herein has been
made. The information contained herein is not, and should not be interpreted as a solicitation of an offer to purchase, or an
offer to sell, any securities of the companies described herein.
Some balances, totals and percentage calculations in this press release may differ slightly to the same balances, totals
and/or percentage calculations disclosed elsewhere within this document and/or to the same balances, total and/or
percentage calculations in the financial statements due to rounding.

Note

Scotiabank Mexico adopted the resolution published by the CNBV on June 12, 2009 related to the prevention and
contingency plan for the new influenza A(H1N1) virus.

The loans that benefit from this program are: car, mortgage, Scotia line and credit card loans.

At the end of September 2009, only 4 loans were incorporated to this program: 2 car loans and 2 mortgage loans. The
amount of these transactions was not material.




                                                                             Grupo Scotiabank – 2009 Third Quarter Report     11
                                                                                                                                                            CONSOLIDATED FINANCIAL STATEMENTS

  Attachment 2
                                                             GRUPO FINANCIERO SCOTIABANK INVERLAT, S.A. DE C.V.
                                                         LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                                           CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 2009
                                                                  EXPRESSED IN MILLIONS OF MEXICAN PESOS

                                               ASSETS                                                                                   LIABILITIES AND STOCKHOLDERS’ EQUITY
FUNDS AVAILABLE                                                                                   23,604             FUNDING
                                                                                                                     Demand and saving deposits                                                           53,694
MARGIN ACCOUNTS                                                                                       203            Time deposits                                                                        49,506
                                                                                                                         General public                                              49,396
FINANCIAL INSTRUMENTS                                                                                                    Money market                                                   110
Securities – available for trading                                          25,238                                   Issue credit certificates                                                             4,235      107,435
Securities – available for sale                                              5,863
Securities – held to maturity                                                1,851                32,952             BANK AND OTHER LOANS
                                                                                                                     Demand                                                                                  200
REPURCHASE AGREEMENTS (DEBTOR)                                                                      1,126            Short term                                                                            2,061
                                                                                                                     Long term                                                                             1,974         4,235
SECURITIES RECEIVABLE                                                                                    -
                                                                                                                     LIABILITIES RELATED TO SECURITIES IN THE COURSE
DERIVATIVES                                                                                                          OF SETTLEMENT                                                                                       3,076
Trading                                                                      1,909
Hedge                                                                          377                  2,286            REPURCHASE AGREEMENTS                                                                              16,862

                                                                                                                     COLLATERAL SOLD OR GIVEN IN GUARANTEE
LOAN PORTFOLIO
Business loans                                                              39,802                                   SECURITIES RECEIVABLE                                                                   260           260
  Commercial                                          31,480
  Financial intermediaries                             3,330                                                         DERIVATIVES
  Government loans                                     4,992                                                         Trading                                                                               2,308
Consumer loans                                                              17,641                                   Hedge                                                                                   310         2,618
Housing loans                                                               36,897
                                                                                                                     OTHER PAYABLES
TOTAL CURRENT LOAN PORTFOLIO                                                94,340
                                                                                                                     Income taxes                                                                            281
PAST-DUE LOAN PORTFOLIO                                                                                              Employee profit sharing                                                                 271
Business loans                                                                 508                                   Liquidation of operations (Creditor)                                                  5,441
  Commercial                                             504                                                         Sundry creditors and other payables                                                   5,984        11,977
  Financial intermediaries                                 4
                                                                                                                     DEFERRED CREDITS                                                                                      874
Consumer loans                                                               1,220
Housing loans                                                                2,029                                   TOTAL LIABILITIES                                                                                147,337

TOTAL PAST-DUE PORTFOLIO                                                     3,757                                   STOCKHOLDERS’ EQUITY
LOAN PORTFOLIO (NET)                                                        98,097
( - ) LESS:                                                                                                          PAID-IN CAPITAL
ALLOWANCE FOR LOAN LOSSES                                                    4,084                                   Capital stock                                                                         4,507         4,507

LOAN PORTFOLIO (NET)                                                                              94,013             CAPITAL SURPLUS
                                                                                                                     Capital reserves                                                                        901
OTHER RECEIVABLES (NET)                                                                           13,525             Results from previous years                                                          18,841
                                                                                                                     Effects from valuation of securities available for sale                                 337
FORECLOSED ASSETS (NET)                                                                                32            Effects from valuation of hedging instruments                                           129
                                                                                                                     Net result                                                                            1,452        21,660
PROPERTY, FURNITURE AND EQUIPMENT (NET)                                                             3,417
                                                                                                                     TOTAL STOCKHOLDERS’ EQUITY                                                                         26,167
LONG-TERM INVESTMENT IN EQUITIES                                                                      122

LONG-TERM ASSETS AVAILABLE FOR SALE                                                                      -

DEFERRED TAXES (NET)                                                                                  725

OTHER ASSETS
Deferred and intangibles charges                                             1,105
Short and long term assets                                                     394                  1,499

TOTAL ASSETS                                                                                     173,504             TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                       173,504

                                                                          MEMORANDUM ACCOUNTS
Assets and liabilities contingent                                                         2,218
Commitment loan                                                                           2,380
Assets in trust or mandate                                                              101,097
   Trust                                                                  100,796
   Mandate                                                                    301
Assets in custody or under administration                                               620,408
Collateral received for the entity                                                      109,860
Collateral received and sold or delivered in
guarantee for the entity                                                                          46,374
Investment bank transaction on behalf of third parts (net)                                        45,745
Interest not collected from past due portfolio                                                       140
Other control accounts                                                                           887,703


“These balance sheets, consolidated with those of the financial and other entities comprising the Group that are subject to consolidation, were prepared in accordance with the accounting criteria for financial group holding
companies issued by the National Banking and Securities Commission based on Article 30 of the Law that Regulates Financial Groups, which are of a general and mandatory nature and have been applied on a consistent
basis. Accordingly, they reflect the transactions carried out by the Holding Company and the financial and other entities comprising the Group that are subject to consolidation, through the dates noted above. Furthermore,
these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These balance sheets were approved by the Board of Directors under the responsibility of the following officers.

The historical capital stock amounts to $ 3,111 (millions) as September 30, 2009”.

     NICOLE REICH DE POLIGNAC                                        JEAN-LUC RICH                                  KEN PFLUGFELDER                                            GORDON MACRAE
                                                             DIRECTOR GENERAL FINANCE AND                          DIVISIONAL DIRECTOR
                PRESIDENT                                                                                                                                               DIRECTOR GROUP ACCOUNTING
                                                                    ADMINISTRATION                                         AUDIT


www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica



                                                                                                                                           Grupo Scotiabank – 2009 Third Quarter Report                                      12
                                                                                                                                               CONSOLIDATED FINANCIAL STATEMENTS



                                                                 GRUPO FINANCIERO SCOTIABANK INVERLAT, S.A. DE C.V.
                                                             LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                                                        CONSOLIDATED STATEMENT OF INCOME
                                                                  FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                                                      EXPRESSED IN MILLIONS OF MEXICAN PESOS


   Total interest earned                                                                                                                                                                14,810
   Total interest paid                                                                                                                                                                   7,766

   Net interest profit                                                                                                                                                                   7,044

   Provision for credit losses                                                                                                                                                           2,331

   Net interest profit, after provision for credit losses                                                                                                                                4,713

   Commissions earned                                                                                                                                2,358
   Commissions paid                                                                                                                                    254
   Revenues from intermediation                                                                                                                        623
   Other operational net income                                                                                                                        (15)                              2,712

   Total operating revenues                                                                                                                                                              7,425

   Administrative and operating expenses                                                                                                                                                 6,840

   Result from operations                                                                                                                                                                   585

   Other revenues                                                                                                                                    1,560
   Other expenses                                                                                                                                       92                               1,468

   Net income before income tax                                                                                                                                                          2,053

   Current income tax                                                                                                                                   789
   Deferred income tax                                                                                                                                  185                               (604)

   Results before subsidiaries unconsolidated and associated companies                                                                                                                   1,449

   Participation in the results of subsidiaries unconsolidated and associated
                                                                                                                                                                                               3
   companies

   Net Income after tax                                                                                                                                                                  1,452




“These statement of income, consolidated with those of the financial and other entities comprising the Group that are subject to consolidation, were prepared in accordance with the accounting criteria for financial
group holding companies issued by the National Banking and Securities Commission based on Article 30 of the Law that Regulates Financial Groups, which are of a general and mandatory nature and have been
applied on a consistent basis. Accordingly, they reflect the revenues and costs relating to the transactions carried out by the Holding Company and the financial and other entities comprising the Group that are
subject to consolidation, through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These consolidated statements of income were approved by the Board of Directors under the responsibility of the following officers”.




       NICOLE REICH DE POLIGNAC                                              JEAN-LUC RICH                               KEN PFLUGFELDER                                   GORDON MACRAE
                                                                     DIRECTOR GENERAL FINANCE AND                       DIVISIONAL DIRECTOR
                   PRESIDENT                                                ADMINISTRATION                                      AUDIT                             DIRECTOR GROUP ACCOUNTING



www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                 Grupo Scotiabank – 2009 Third Quarter Report                                 13
                                                                                                                                                                                                                     CONSOLIDATED FINANCIAL STATEMENTS



                                                                                                  GRUPO FINANCIERO SCOTIABANK INVERLAT, S.A. DE C.V.
                                                                                             LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                                                                            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
                                                                                                FOR THE PERIOD DECEMBER 31, 2008 TO SEPTEMBER 30, 2009
                                                                                                       EXPRESSED IN MILLIONS OF MEXICAN PESOS

                                                                      Paid-in Capital                                                                                                 Capital Surplus
                                                                                                                                                                                                                                   Gain from
                                                                                                                                                                          Income                           Gain from             holding non-    Employee
                                                                               Premium                   Results        Unrealised gain (loss)       Effects from                                                                                                                           Total
                                                                                                                                                                        (loss) from    Cumulative         holding non-         monetary assets    benefits                  Non-
                          CONCEPT                                   Capital    from the     Statutory      from           from valuation of          valuation of                                                                                               Net                     stockholders’
                                                                                                                                                                        conversion       effect of      monetary assets        (from valuation   adjustment              controller
                                                                     stock      sale of     reserves     previous         available-for-sale           hedging                                                                                                income                       equity
                                                                                                                                                                         of foreign    restatement      (from valuation          of permanent      at the               participation
                                                                                shares                    years              securities              instruments
                                                                                                                                                                        operations                      of fixed assets)        investments in   retirement
                                                                                                                                                                                                                                    shares)
Balances as of December 31 , 2008                                     4,507             -         901         18,005                       331                 62                 -              -                         -                 -            -    3,101                -         26,907

ITEMS RELATED TO STOCKHOLDERS DECISIONS

Issuance of shares
Capitalisation of profits
Creation of reserves
Transfer of prior years results                                                                                 3,101                                                                                                                                         (3,101)
Dividend payment                                                                                              (2,000)                                                                                                                                                                         (2,000)
Other
Total                                                                      -            -            -         1,101                             -                  -             -              -                         -                 -            -   (3,101)               -         (2,000)

ITEMS RELATED TO RECOGNITION OF
COMPREHENSIVE INCOME

Net income                                                                                                                                                                                                                                                     1,452                           1,452
Gain from valuation of available-for-sale securities                                                                                         6                                                                                                                                                     6
Effects from valuation of hedging instruments                                                                                                                  67                                                                                                                                 67
Cumulative effect of restatement
Gain from holding non-monetary assets                                                                                                                                                                                                        -
Employee benefits adjustment
Other                                                                                                          (265)                                            -                                                          -                 -                                                  (265)

Total                                                                      -            -            -         (265)                             6             67                 -              -                         -                 -            -    1,452                -          1,260

Balances as of September 30, 2009                                     4,507             -         901         18,841                       337               129                  -              -                         -                 -            -    1,452                -         26,167


“These statement of changes stockholders’ equity, consolidated with those of the financial and other entities comprising the Group that are subject to consolidation, were prepared in accordance with the accounting criteria for financial
group holding companies issued by the National Banking and Securities Commission based on Article 30 of the Law that Regulates Financial Groups, which are of a general and mandatory nature and have been applied on a consistent
basis. Accordingly, they all the stockholders’ equity account entries relating to the transactions carried out by the Holding Company and the financial and other entities comprising the Group that are subject to consolidation, through the
dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These consolidated statements of changes in stockholders’ equity were approved by the Board of Directors under the responsibility of the following officers”.


                NICOLE REICH DE POLIGNAC                                                        JEAN-LUC RICH                                                                  KEN PFLUGFELDER                                                          GORDON MACRAE
                                                                                        DIRECTOR GENERAL FINANCE AND
                            PRESIDENT                                                          ADMINISTRATION                                                            DIVISIONAL DIRECTOR AUDIT                                               DIRECTOR GROUP ACCOUNTING


www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                                                                                        Grupo Scotiabank – 2009 Third Quarter Report                               14
                                                                                                                                                                CONSOLIDATED FINANCIAL STATEMENTS

                                                        GRUPO FINANCIERO SCOTIABANK INVERLAT, S.A. DE C.V.
                                                    LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                                             CONSOLIDATED STATEMENT OF CASH FLOW
                                                          FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                                             EXPRESSED IN MILLIONS OF MEXICAN PESOS

              Net income                                                                                                                                                                                           1,452
              Adjustments for items that not imply cash flow :
              Profit or loss valuation associated with investment and financing activities                                                                                                              96
              Provision for credit losses                                                                                                                                                           2,331
              Provision for difficult or not collection                                                                                                                                                  5
              Losses for deterioration or cancel effect associated with investment and funding activities                                                                                               90
              Depreciation and amortization                                                                                                                                                           191
              Provisions                                                                                                                                                                                 -
              Income tax (caused and deferred)                                                                                                                                                      (185)
              Participation in results unconsolidated subsidiaries and associated companies                                                                                                            (3)
              Not controller participation                                                                                                                                                               -
              Discontinuous operations                                                                                                                                                                   -
              Others                                                                                                                                                                                  (75)           2,450

              Operation activities
              Change in margin accounts                                                                                                                                                                                 (19)
              Change in securities investment                                                                                                                                                                         1,484
              Change in repurchase agreements (debtor)                                                                                                                                                              (1,110)
              Change in securities receivable (assets)                                                                                                                                                                      -
              Change in derivates (assets)                                                                                                                                                                              (30)
              Change in loan portfolio                                                                                                                                                                              (1,229)
              Change in acquired collections                                                                                                                                                                                -
              Change in benefits for receiving in operations of securitization                                                                                                                                              -
              Change in foreclosed assets                                                                                                                                                                                (4)
              Change in other operational assets                                                                                                                                                                    (2,486)
              Change in funding                                                                                                                                                                                     (6,121)
              Change in bank and other loans                                                                                                                                                                        (1,920)
              Change in liabilities related to securities in the course of settlement                                                                                                                                       -
              Change in repurchase agreements (creditor)                                                                                                                                                              (299)
              Change in securities receivable (liabilities)                                                                                                                                                                 -
              Change in collateral sold or in guarantee                                                                                                                                                                 165
              Change in derivates (liabilities)                                                                                                                                                                     (1,480)
              Change in operations of securitization (liabilities)                                                                                                                                                          -
              Change in subordinated debentures (liabilities)                                                                                                                                                               -
              Change in other operational liabilities                                                                                                                                                                 5,630
              Change in hedging instruments                                                                                                                                                                               -
              Operation activities cash flow                                                                                                                                                                        (7,419)

              Investment activities
              Collections for regulation of property, furniture and equipment                                                                                                                                             5
              Payments for acquisition of property, furniture and equipment                                                                                                                                          (647)
              Collections for regulation in subsidiaries and associated companies                                                                                                                                       35
              Payments for acquisition in subsidiaries and associated companies                                                                                                                                           -
              Collections in cash (dividends)                                                                                                                                                                          389
              Payments for acquisition of intangible assets                                                                                                                                                             (1)
              Collections for regulation in long term assets available for sale                                                                                                                                      4,797
              Collections for regulation in long term of other assets                                                                                                                                                     -
              Payments for acquisition in long term of other assets                                                                                                                                                       -
              Associated collections in hedging instruments                                                                                                                                                               -
              Associated payments in hedging instruments                                                                                                                                                                  -
              Others                                                                                                                                                                                                    50
              Investment activities cash flow                                                                                                                                                                        4,628

              Financing activities
              Collections in equity issues                                                                                                                                                                               -
              Payments for return in capital stock                                                                                                                                                                       -
              Payments in cash (dividends)                                                                                                                                                                           (389)
              Associated payments in equity repurchase                                                                                                                                                                   -
              Collections in subordinated debentures (capital)                                                                                                                                                           -
              Associated payments in subordinated debentures (capital)                                                                                                                                                   -
              Financing activities cash flow                                                                                                                                                                         (389)
              Net Increase in cash                                                                                                                                                                                     722
              Cash flow adjustments in foreign exchange and inflation variations                                                                                                                                         -
              Cash and equivalent at the beginning of the period                                                                                                                                                    22,882
              Cash and equivalent at the final of the period                                                                                                                                                        23,604


“These statement of cash flow, consolidated with those of the financial and other entities comprising the Group that are subject to consolidation, were prepared in accordance with the accounting criteria for financial
group holding companies issued by the National Banking and Securities Commission based on Article 30 of the Law that Regulates Financial Groups, which are of a general and mandatory nature and have been
applied on a consistent basis. Accordingly, they all the stockholders’ equity account entries relating to the transactions carried out by the Holding Company and the financial and other entities comprising the Group that
are subject to consolidation, through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These consolidated statement of cash flow were approved by the Board of Directors under the responsibility of the following officers”.


          NICOLE REICH DE POLIGNAC                                    JEAN-LUC RICH                                           KEN PFLUGFELDER                                          GORDON MACRAE
                                                              DIRECTOR GENERAL FINANCE AND
                   PRESIDENT                                                                                             DIVISIONAL DIRECTOR AUDIT                             DIRECTOR GROUP ACCOUNTING
                                                                     ADMINISTRATION

www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                                Grupo Scotiabank – 2009 Third Quarter Report                                    15
                                                                                                                                                              CONSOLIDATED FINANCIAL STATEMENTS
Attachment 3                                                                      SCOTIABANK INVERLAT, S.A.
                                                                               INSTITUCION DE BANCA MULTIPLE
                                                                          GRUPO FINANCIERO SCOTIABANK INVERLAT.
                                                     BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                        CONSOLIDATED WITH ITS SUBSIDIARIES AND WITH THE TRUSTS CONTAINING RESTRUCTURED LOANS DENOMINATED IN UDIS
                                                                                   AS AT SEPTEMBER 30, 2009
                                                                          EXPRESSED IN MILLIONS OF MEXICAN PESOS

                                                        ASSETS                                                                                                  LIABILITIES AND STOCKHOLDERS’ EQUITY
FUNDS AVAILABLE                                                                                                           23,603      FUNDING
MARGIN ACCOUNTS                                                                                                              167        Demand and saving deposits                                                     54,053
FINANCIAL INSTRUMENTS                                                                                                                   Time deposits                                                                  49,538
   Securities – available for trading                                                            11,435                                    General public                                                 49,425
   Securities – available for sale                                                                5,609                                    Money market                                                      113
   Securities – held to maturity                                                                  1,852                   18,896        Issue credit certificate                                                        4,235      107,826

REPURCHASE AGREEMENTS (DEBTOR)                                                                                              872       BANK AND OTHER LOANS
                                                                                                                                        Demand                                                                            200
DERIVATIVES                                                                                                                             Short term                                                                      2,061
   Trading                                                                                         1,904                                Long term                                                                       1,974        4,235
   Hedge                                                                                             376                   2,280
                                                                                                                                      REPURCHASE AGREEMENTS                                                                          6,403
LOAN PORTFOLIO
Business loans                                                                                   39,802
     Commercial                                                            31,480                                                     LIABILITIES RELATED TO SECURITIES IN THE COURSE OF
     Financial intermediaries                                               3,330                                                     SETTLEMENT                                                                                     1,924
     Government loans                                                       4,992
Consumer loans                                                                                   17,641                               DERIVATIVES
Housing loans                                                                                    36,897                                 Trading                                                                         2,048
                                                                                                                                        Hedge                                                                             310        2,358

TOTAL CURRENT LOAN PORTFOLIO                                                                     94,340                               OTHER PAYABLES

                                                                                                                                         Income Taxes                                                                     254

                                                                                                                                         Employee profit sharing                                                          242

PAST-DUE LOAN PORTFOLIO                                                                                                                  Liquidation of operations (Creditor)                                           2,404
Business loans                                                                                       508
   Commercial                                                                 504                                                        Sundry creditors and other payables                                            5,764        8,664
   Financial intermediaries                                                     4
Consumer loans                                                                                     1,220
Housing loans                                                                                      2,029                              DEFERRED CREDITS                                                                                 874

TOTAL PAST-DUE PORTFOLIO                                                                           3,757
                                                                                                                                      TOTAL LIABILITIES                                                                            132,284
LOAN PORTFOLIO                                                                                   98,097
( - ) LESS:                                                                                                                           STOCKHOLDERS’ EQUITY
ALLOWANCE FOR LOAN LOSSES                                                                          4,084
                                                                                                                                      PAID-IN CAPITAL
                                                                                                                                        Capital stock                                                                   7,451
LOAN PORTFOLIO (NET)                                                                                                      94,013        Premium from the sale of shares                                                   472        7,923

OTHER RECEIVABLES (NET)                                                                                                   11,530      CAPITAL SURPLUS
                                                                                                                                        Capital reserves                                                                2,221
                                                                                                                                        Results from previous years                                                    12,567
FORECLOSED ASSETS                                                                                                            32         Effects from valuation of securities available for sale                           270
                                                                                                                                        Effects from valuation of hedging instruments                                     129
                                                                                                                                        Net result                                                                      1,365       16,552
PROPERTY, FURNITURE AND EQUIPMENT (NET)                                                                                    3,256


LONG-TERM INVESTMENT IN EQUITIES                                                                                             74


DEFERRED TAXES                                                                                                              687

OTHER ASSETS
   Other assets, deferred and intangible charges                                                     955
   Short and long term other assets                                                                  394                   1,349
                                                                                                                                      TOTAL STOCKHOLDERS’ EQUITY                                                                    24,475

TOTAL ASSETS                                                                                                          156,759         TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                   156,759

                                                                                                     MEMORANDUM ACCOUNTS


                                                                                     Assets and liabilities contingent                                                             71

                                                                                     Commitment loan                                                                             2,380

                                                                                     Assets in trust or mandate                                                             101,097
                                                                                       Trust                                                            100,796
                                                                                       Mandate                                                              301

                                                                                     Assets in custody or under administration                                              350,323

                                                                                     Collateral received for the entity                                                         77,269

                                                                                     Collateral received and sold or delivered in guarantee for                                 14,296
                                                                                     the entity

                                                                                     Investment bank transaction on behalf of third parts                                       45,745

                                                                                     Interest not collected from past due portfolio                                               140

                                                                                     Other control accounts                                                                 838,397


“These balance sheets were prepared in accordance criteria for institutions issued by the National Banking and Securities Commission based on Articles 99, 101 and 102 of the Credit Institutions Law, which are of a general and mandatory
nature and have been applied on a consistent basis. Accordingly, they reflect the transactions carried out by the Bank through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound
banking practices and the applicable legal and administrative provisions.
These balance sheets were approved by the Board Directors under the responsibility of the following officers.
The Bank’s historical capital stock amounts to $ 6,200 (millions)”.


               NICOLE REICH DE POLIGNAC                                       JEAN-LUC RICH                                                      KEN PFLUGFELDER                                        GORDON MACRAE
                      PRESIDENT                                 DIRECTOR GENERAL FINANCE AND ADMINISTRATION                                 DIVISIONAL DIRECTOR AUDIT                             DIRECTOR GROUP ACCOUNTING



www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/ Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica


                                                                                                                                            Grupo Scotiabank – 2009 Third Quarter Report                                          16
                                                                                                                              CONSOLIDATED FINANCIAL STATEMENTS


                                                    SCOTIABANK INVERLAT, S.A.
                                                 INSTITUCION DE BANCA MULTIPLE
                                            GRUPO FINANCIERO SCOTIABANK INVERLAT.
                        BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F., C.P. 11700
                   STATEMENT OF INCOME OF THE BANK CONSOLIDATED WITH ITS SUBSIDIARIES AND WITH THE TRUSTS
               CONTAINING RESTRUCTURED LOANS DENOMINATED IN UDIS, FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                            EXPRESSED IN MILLIONS OF MEXICAN PESOS


                Total interest earned                                                                                                                         11,199
                Total interest paid                                                                                                                            4,329

                Net interest profit                                                                                                                            6,870

                Provision for credit losses                                                                                                                    2,331

                Net interest profit, after provision for credit losses                                                                                         4,539

                Commissions earned                                                                                                        1,727
                Commissions paid                                                                                                            212
                Revenues from intermediation                                                                                                626
                Other operational income                                                                                                    (15)               2,126

                Total operating revenues                                                                                                                       6,665

                Administrative and operating expenses                                                                                                          6,319

                Result from operations                                                                                                                            346

                Other revenues                                                                                                            1,654
                Other expenses                                                                                                               91                1,563

                Net income before income tax                                                                                                                   1,909

                Current income tax                                                                                                          692
                Deferred income tax                                                                                                         148                 (544)

                Results before subsidiaries unconsolidated and associated companies                                                                            1,365

                Participation in the results of subsidiaries unconsolidated and associated companies                                                                 -

                Net Income before continuing operations                                                                                                        1,365

                Continuing operations                                                                                                                                -

                Net income                                                                                                                                     1,365




“These statement of income was prepared in accordance criteria for institutions issued by the National Banking and Securities Commission based on Articles 99, 101 and 102 of the
Credit Institutions Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect the revenues and costs the transactions
carried out by the institution through the dates noted above. Furthermore, these transactions were carried out and value in accordance with sound banking practices and the applicable
legal and administrative provisions.

These statement of income were approved by the Board Directors under the responsibility of the following officers”.




       NICOLE REICH DE POLIGNAC                                    JEAN-LUC RICH                                  KEN PFLUGFELDER                       GORDON MACRAE
                                                           DIRECTOR GENERAL FINANCE AND
                  PRESIDENT                                       ADMINISTRATION                              DIVISIONAL DIRECTOR AUDIT            DIRECTOR GROUP ACCOUNTING


www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                    Grupo Scotiabank – 2009 Third Quarter Report                17
                                                                                                                                                                                                              CONSOLIDATED FINANCIAL STATEMENTS



                                                                                       SCOTIABANK INVERLAT, S.A.
                                                                                    INSTITUCION DE BANCA MULTIPLE
                                                                               GRUPO FINANCIERO SCOTIABANK INVERLAT
                                                           BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                                CONSOLIDATED STATEMENT OF CHANGES IN THE CAPITAL OF THE BANK WITH ITS SUBSIDIARIES AND WITH THE TRUSTS
                                               CONTANING RESTRUCTURED LOANS DENOMINATED IN UDIS, FOR THE PERIOD DECEMBER 31, 2008 TO SEPTEMBER 30, 2009
                                                                              EXPRESSED IN MILLIONS OF MEXICAN PESOS

                                                                    Paid-in Capital                                                                                             Capital Surplus
                                                                                                                                                                                                                             Gain from
                                                                                                                                                                    Income                           Gain from             holding non-
                                                                              Premium                   Results       Unrealised gain (loss)       Effects from                                                                                                                       Total
                                                                                                                                                                  (loss) from    Cumulative         holding non-         monetary assets   Employee                   Non-
                         CONCEPT                                   Capital    from the     Statutory      from          from valuation of          valuation of                                                                                           Net                     stockholders’
                                                                                                                                                                  conversion       effect of      monetary assets        (from valuation    benefits               controller
                                                                    stock      sale of     reserves     previous        available-for-sale           hedging                                                                                            income                       equity
                                                                                                                                                                   of foreign    restatement      (from valuation          of permanent    adjustment             participation
                                                                               shares                    years              securities             instruments
                                                                                                                                                                  operations                      of fixed assets)        investments in
                                                                                                                                                                                                                              shares)
Balances as of December 31, 2008                                    7,451          472        1,911      12,113                          276                 62             -              -                         -                 -            -    3,099                -         25,384

ITEMS RELATED TO STOCKHOLDERS DECISIONS

Issuance of shares
Capitalisation of profits
Creation of reserves                                                                            310        (310)                                                                                                                                                                              -
Transfer of prior year's results                                                                           3,099                                                                                                                                        (3,099)                               -
Dividend payment                                                                                         (2,070)                                                                                                                                                                        (2,070)
Total                                                                     -            -        310          719                               -              -             -              -                         -                 -            -   (3,099)               -         (2,070)

ITEMS RELATED TO RECOGNITION OF
COMPREHENSIVE INCOME

Net income                                                                                                                                                                                                                                               1,365                            1,365
Gain from valuation of available-for-sale securities                                                                                      (6)                                                                                                                                                (6)
Effects from valuation of hedging instruments                                                                                                                67                                                                                                                              67
Cumulative effect of restatement
Gain from holding non-monetary assets
Other                                                                                                         (265)                                                                                                                                                                       (265)

Total                                                                     -            -            -         (265)                       (6)                67             -              -                         -                 -            -    1,365                -           1,161

Balances as of September 30, 2009                                   7,451          472        2,221      12,567                          270               129              -              -                         -                 -            -    1,365                -         24,475


“These statement of changes in stockholders’ equity were prepared in accordance criteria for institutions issued by the National Banking and Securities Commission based on Articles 99, 101 and 102 of the Credit Institutions Law, which are of a
general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect the stockholders’ equity account entries relating to the transactions carried out by the Bank through the dates noted above. Furthermore, these
transactions were carried out and value in accordance with sound banking practices and the applicable legal and administrative provisions.

These statement of changes in stockholders’ equity were approved by the Board Directors under the responsibility of the following officers”.


                NICOLE REICH DE POLIGNAC                                                      JEAN-LUC RICH                                                             KEN PFLUGFELDER                                                          GORDON MACRAE
                                                                                      DIRECTOR GENERAL FINANCE AND
                           PRESIDENT                                                         ADMINISTRATION                                                       DIVISIONAL DIRECTOR AUDIT                                                DIRECTOR GROUP ACCOUNTING
www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                                                                               Grupo Scotiabank – 2009 Third Quarter Report                                  18
                                                                                                        CONSOLIDATED FINANCIAL STATEMENTS

                                                SCOTIABANK INVERLAT, S.A.
                                             INSTITUCION DE BANCA MULTIPLE
                                        GRUPO FINANCIERO SCOTIABANK INVERLAT
                    BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
  CONSOLIDATED STATEMENT OF CASH FLOW CONSOLIDATED STATEMENT OF CASH FLOW OF THE BANK WITH ITS SUBSIDIARIES AND WITH
                            THE TRUSTS CONTAINING RESTRUCTURED LOANS DENOMINATED IN UDIS
                                    FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                        EXPRESSED IN MILLIONS OF MEXICAN PESOS


    Net income                                                                                                                                         1,365

    Profit or loss valuation associated with investment and financing activities                                                              121
    Provision for credit losses                                                                                                             2,331
    Provision for difficult or not collection                                                                                                    5
    Losses for deterioration or cancel effect associated with investment and funding activities                                                 46
    Depreciation and amortisation                                                                                                             182
    Income tax (caused and deferred)                                                                                                        (148)
    Other                                                                                                                                     (74)
    Adjustment for items that not imply cash flow:                                                                                                     2,463

    Operation activities
    Change in margin accounts                                                                                                                            (24)
    Change in securities investment                                                                                                                      314
    Change in repurchase agreements (debtor)                                                                                                           (865)
    Change in derivates (assets)                                                                                                                         (27)
    Change in loan portfolio                                                                                                                         (1,229)
    Change in foreclosed assets                                                                                                                           (4)
    Change in other operational assets                                                                                                                 (140)
    Change in funding                                                                                                                                (7,101)
    Change in bank and other loans                                                                                                                   (1,920)
    Change in repurchase agreements (creditor)                                                                                                         1,226
    Change in derivates (liabilities)                                                                                                                      42
    Change in other operational liabilities                                                                                                            2,763
    Operation activities cash flow                                                                                                                   (6,965)

    Investment activities
    Collections for regulation of property, furniture and equipment                                                                                        5
    Payments for acquisition of property, furniture and equipment                                                                                      (645)
    Collections for regulation in subsidiaries and associated companies                                                                                   44
    Collections for regulation in long term assets available for sale                                                                                  4,797
    Others                                                                                                                                                50
    Investment activities cash flow                                                                                                                    4,251

    Financing activities
    Payments in cash (dividends)                                                                                                                       (389)
    Financing activities cash flow                                                                                                                     (389)
    Net Increase in cash                                                                                                                                 725
    Cash and equivalent at the beginning of the period                                                                                                22,878

    Cash and equivalent at the final of the period                                                                                                    23,603

“These statement of cash flow were prepared in accordance criteria for institutions issued by the National Banking and Securities Commission based on Articles
99, 101 and 102 of the Credit Institutions Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they
reflect the stockholders’ equity account cash entrance and cash outflow relating to the transactions carried out by the Bank through the dates noted above.
Furthermore, these transactions were carried out and value in accordance with sound banking practices and the applicable legal and administrative provisions.

These statement of cash flow were approved by the Board Directors under the responsibility of the following officers”.


NICOLE REICH DE POLIGNAC                    JEAN-LUC RICH                               KEN PFLUGFELDER                         GORDON MACRAE
                                    DIRECTOR GENERAL FINANCE AND
          PRESIDENT                        ADMINISTRATION                         DIVISIONAL DIRECTOR AUDIT              DIRECTOR GROUP ACCOUNTING
www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                            Grupo Scotiabank – 2009 Third Quarter Report                  19
                                                                                                                                                   CONSOLIDATED FINANCIAL STATEMENTS

Attachment 4
                                                     SCOTIA INVERLAT CASA DE BOLSA, S.A. DE C.V.
                                                      GRUPO FINANCIERO SCOTIABANK INVERLAT.
                                   BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                                    CONSOLIDATED BALANCE SHEET WHICH INCLUDES
                                                      BALANCE SHEETS AS AT SEPTEMBER 30 , 2009
                                                      EXPRESSED IN MILLIONS OF MEXICAN PESOS
                                                               MEMORANDUM ACCOUNTING
OPERATIONS ON BEHALF THIRD PARTIES                                             OWN OPERATIONS
CUSTOMER CURRENT ACCOUNTS                                                      ASSETS AND LIABILITIES CONTINGENT                                                                                               2,145
  Cash balances                                              7
  Transaction settlement                                   163          170

CUSTOMER SECURITIES                                                                                               COLLATERAL RECEIVED BY THE ENTITY
  Securities held in custody                                                      157,926                          Government debt                                                             32,075
  Foreign securities                                                                    -          157,926         Own instruments                                                                515        32,590

TRANSACTIONS ON BEHALF OF CUSTOMERS                                                                               COLLATERAL RECEIVED, SOLD                    OR     DELIVERED       IN
                                                                                                                  GUARANTEE FOR THE ENTITY
Securities operations                                                              40,046                          Government debt                                                             31,824
Securities receivable operations                                                      207                          Own instruments                                                                255        32,079
Collaterals received in guarantee                                                      82
Collaterals given in guarantee                                                      1,350
Purchase derivative operations                                                                                    OTHER RECORD ACCOUNTS                                                                             -
   Futures and forwards                                                                158
Sale derivative operations                                                               -
Administrative trusts                                                                  112           41,955

TOTAL ON BEHALF OF THIRD PARTIES                                                                   200,051        TOTAL BROKERAGE FIRM                                                                       66,814


                                                 ASSETS                                                                                   LIABILITIES AND STOCKHOLDERS’ EQUITY
FUNDS AVAILABLE                                                                                         356       LIABILITIES SECURITIZATION                                                                        -

MARGIN ACCOUNTS (DERIVATES)                                                                              36       BANK AND OTHER LOANS
                                                                                                                   Short term                                                                        -
FINANCIAL INSTRUMENTS                                                                                              Long term                                                                         -              -
   Securities – available for trading                                              13,684
   Securities – available for sale                                                    254
   Securities – Held to maturity                                                        -            13,938       LIABILITIES RELATED TO SECURITIES IN THE COURSE OF
                                                                                                                  SETTLEMENTS                                                                                 1,152
REPURCHASE AGREEMENTS - DEBTORS                                                                         254       REPURCHASE AGREEMENTS – CREDITORS                                                          10,458
                                                                                                                  SECURITIES RECEIVABLES                                                                          -
SECURITIES RECEIVABLE                                                                                         -   COLLATERAL SOLD OR GIVEN IN GUARANTEE
                                                                                                                    Repurchase                                                                      -
DERIVATES                                                                                                           Securities receivable                                                         261
  Trading                                                                                6                          Derivates                                                                       -
  Hedge                                                                                  -                    6     Others collateral sold or given in guarantee                                    -           261

MARK TO MARKET ADJUSTMENTS HEDGE OF FINANCIAL                                                                     DERIVATES
ASSETS                                                                                                        -
                                                                                                                    Trading                                                                       260
OTHER ACCOUNTS RECEIVABLE (NET)                                                                       2,093         Hedge                                                                           -           260
                                                                                                                  MARK TO MARKET ADJUSTMENTS HEDGE OF FINANCIAL
                                                                                                                  LIABILITIES                                                                                       -
PROPERTY, FURNITURE AND EQUIPMENT (NET)                                                                 158       SUBORDINATED LIABILITIES DEBENTURES
                                                                                                                  OTHER PAYABLES
LONG-TERM INVESTMENTS IN EQUITIES                                                                             3     Income tax                                                                     23
                                                                                                                    Employee profit sharing                                                        26
                                                                                                                    Contributions for future increases by the Shareholders' assembly                -
ASSETS OF LONG TERM AVAILABLE FOR SALE                                                                        -     Liquidation of operations (Creditor)                                        3,037
                                                                                                                    Margin Accounts (Creditor)                                                      -
DEFERRED TAXES                                                                                           30         Sundry creditors and other payables                                           300         3,386
                                                                                                                  DEFERRED TAXES                                                                                  -
OTHER ASSETS                                                                                                      TOTAL LIABILITIES                                                                          15,517
  Other assets, deferred and intangible charges                                        116
  Short and long term other assets                                                       -              116       STOCKHOLDERS’ EQUITY

                                                                                                                  PAID-IN CAPITAL
                                                                                                                    Capital stock                                                                               551
                                                                                                                  CAPITAL SURPLUS
                                                                                                                   Statutory reserves                                                              37
                                                                                                                   Results from prior years                                                       703
                                                                                                                   Results for valuation of securities available for sale                          67
                                                                                                                   Net results                                                                    115           922
                                                                                                                  TOTAL STOCKHOLDERS’ EQUITY                                                                   1,473
TOTAL ASSETS                                                                                         16,990       EQUITY TOTAL LIABILITIES AND STOCKHOLDERS’                                                 16,990

“These balance sheets have been prepared in accordance with the accounting criteria for brokerage firms, issued by the National Banking and Securities Commission based on Article 205 last paragraph, 210 second
paragraph and 211 of the Securities Market Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect the transactions carried out by the Brokerage Firm
through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These balance sheets were approved by the Board Directors under the responsibility of the following officers.

As at September 30, 2009, the historical capital stock amount is $ 386 millions”.
       GONZALO ROJAS RAMOS                               JEAN-LUC RICH                             KEN PFLUGFELDER                           GORDON MACRAE                       FRANCISCO LOPEZ CHAVEZ
                                              DIRECTOR GENERAL FINANCE AND                                                                                                        ASSISTANT DIRECTOR OF
             PRESIDENT                                  ADMINISTRATION                        DIVISIONAL DIRECTOR AUDIT              DIRECTOR GROUP ACCOUNTING                          ACCOUTING

www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                    Grupo Scotiabank – 2009 Third Quarter Report                                    20
                                                                                                                               CONSOLIDATED FINANCIAL STATEMENTS

                                                   SCOTIA INVERLAT CASA DE BOLSA, S.A. DE C.V.
                                                    GRUPO FINANCIERO SCOTIABANK INVERLAT
                                 BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                      STATEMENT OF INCOME FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                                    EXPRESSED IN MILLIONS OF MEXICAN PESOS



                Commissions and fees collected                                                                                          346
                Commissions and fees paid                                                                                                20
                Financial intermediation income                                                                                          52              378

                Service Income                                                                                                                           378

                Gain on purchase and sale of securities                                                                                  400
                Loss on purchase and sale of securities                                                                                (388)
                Interest income                                                                                                        4,277
                Interest expense                                                                                                     (4,104)
                Valuation gain (loss) on securities                                                                                      (19)

                Net Interest Profit for Intermediation                                                                                                   166

                Total operating revenues                                                                                                                   -

                Total Operating Income                                                                                                                   544

                Administrative and operating expenses                                                                                                    458

                Operating income                                                                                                                          86

                Other income                                                                                                               81
                Other expense                                                                                                               -             81

                Net income before income tax                                                                                                             167

                Current income tax                                                                                                        87
                Deferred income tax                                                                                                     (35)              52

                Results before subsidiaries unconsolidated and associated companies                                                                      115

                Participation in the results of subsidiaries unconsolidated and associated companies                                                       -

                Results from continuing operations                                                                                                       115

                Net income                                                                                                                               115




“These statement of income were prepared in accordance with the accounting criteria for brokerage firms, issued by the National Banking and Securities Commission based
on Article 205 last paragraph, 210 second paragraph and 211 of the Securities Market Law, which are of a general and mandatory nature and have been applied on a
consistent basis. Accordingly, they reflect the revenues and disbursement relating to the transactions carried out by the Brokerage Firm through the dates noted above.
Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These balance sheets were approved by the Board Directors under the responsibility of the following officers.




    GONZALO ROJAS RAMOS                            JEAN-LUC RICH                                 KEN PFLUGFELDER          GORDON MACRAE         FRANCISCO LOPEZ CHAVEZ
                                             DIRECTOR GENERAL FINANCE                                                     DIRECTOR GROUP         ASSISTANT DIRECTOR OF
             PRESIDENT                          AND ADMINISTRATION                         DIVISIONAL DIRECTOR AUDIT        ACCOUNTING                 ACCOUTING




www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                       Grupo Scotiabank – 2009 Third Quarter Report      21
                                                                                                                                                                                               CONSOLIDATED FINANCIAL STATEMENTS
                                                                              SCOTIA INVERLAT CASA DE BOLSA, S.A. DE C.V.
                                                                               GRUPO FINANCIERO SCOTIABANK INVERLAT
                                                           BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                                  STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD DECEMBER 31, 2008 TO SEPTEMBER 30, 2009
                                                                               EXPRESSED IN MILLIONS OF MEXICAN PESOS
                                                                                                              Paid-in Capital                                                             Capital Surplus

                                                                                                                                                                                                             Gain from holding non-                                Total
                                                                                                                       Premium from                                               Result for valuation of
                                        CONCEPT                                                                                             Statutory         Results from                                   monetary assets (from          Net                stockholders’
                                                                                                  Capital stock              the                                                  securities available for
                                                                                                                                            reserves         previous years                                  valuation of permanent       income                   equity
                                                                                                                       sale of shares                                                       sale             investments in shares)

Balances as of December 31, 2008                                                                                 551                    -               35              670                            55                             -             35                   1,346

ITEMS RELATED TO STOCKHOLDERS DECISIONS

Issuance of shares
Capitalisation of profits
Creation of reserves                                                                                                                                    2                (2)                                                                                                   -
Dividend payment
Transfer of prior year's results                                                                                                                                         35                                                                        (35)                        -
Other movements

Total                                                                                                              -                    -               2                33                                                           -            (35)                        -

ITEMS RELATED TO RECOGNITION OF COMPREHENSIVE INCOME
Integral Profit
     -Net income                                                                                                                                                                                                                                   115                     115
     -Gain from valuation of available-for-sale securities                                                                                                                                             12                                                                   12
     -Effects from valuation of hedging instruments
     -Cumulative effect of restatement                                                                                                                                                                                                -                                        -
     -Gain from holding non-monetary assets
     -Other movements                                                                                              -                    -                -                    -                          -                            -               -                        -

Total                                                                                                              -                    -                -                    -                        12                             -            115                     127

Balances as of September 30 2009                                                                                 551                    -               37              703                            67                             -            115                   1,473



“These statements of changes in stockholders´ equity have been prepared in conformity with the accounting criteria for brokerage firms, issued by the National Banking and Securities Commission based on Article 205 last paragraph, 210 second
paragraph and 211 of the Securities Market Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect all the stockholders’ equity account entries relating to the transactions carried out
by the Brokerage Firm through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These statement of changes in stockholders’ equity were approved by the Board Directors under the responsibility of the following officers”.


          GONZALO ROJAS RAMOS                                       JEAN-LUC RICH                                               KEN PFLUGFELDER                                    GORDON MACRAE                                 FRANCISCO LOPEZ CHAVEZ
                                                            DIRECTOR GENERAL FINANCE AND
                   PRESIDENT                                       ADMINISTRATION                                         DIVISIONAL DIRECTOR AUDIT                     DIRECTOR GROUP ACCOUNTING                           ASSISTANT DIRECTOR OF ACCOUTING
www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                                                                                  Grupo Scotiabank – 2009 Third Quarter Report                            22
                                                                                                                              CONSOLIDATED FINANCIAL STATEMENTS


                                                  SCOTIA INVERLAT CASA DE BOLSA, S.A. DE C.V.
                                                    GRUPO FINANCIERO SCOTIABANK INVERLAT
                                BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                    STATEMENT OF CASH FLOW, FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                                   EXPRESSED IN MILLIONS OF MEXICAN PESOS

              Net income                                                                                                                                           115
               Adjustments for items that do not imply flow of cash
               Profit or loss valuation associated with investment and funding activities                                                            (26)
               Provision for difficult or not collection                                                                                                -
               Losses for deterioration or cancel effect associated with investment and funding activities                                             45
               Depreciation and amortization                                                                                                            8
               Provisions                                                                                                                               -
               Income tax (caused and deferred)                                                                                                      (35)
               Participation in results of not consolidated subsidiaries and associated companies                                                       -
               Discontinuous operations
               Other                                                                                                                                  (2)          (10)

              Operation Activities
               Change in margin accounts                                                                                                                               4
               Change in securities investment                                                                                                                    1,199
               Change in repurchase agreements (debtor)                                                                                                           (245)
               Change in securities receivable (assets)                                                                                                                -
               Change in derivates (assets)                                                                                                                          (4)
               Change in benefits for receiving in operations of securitization                                                                                        -
               Change in other operational assets                                                                                                               (2,100)
               Change in liabilities                                                                                                                                   -
               Change in bank and other loans                                                                                                                          -
               Change in liabilities related to securities in the course of settlement                                                                                 -
               Change in repurchase agreements (creditor)                                                                                                       (1,524)
               Change in securities receivable (liabilities)                                                                                                           -
               Change in collateral sold or in guarantee                                                                                                            165
               Change in derivates (liabilities)                                                                                                                (1,521)
               Change in operations of securitization (liabilities)                                                                                                    -
               Change in subordinated debentures (liabilities)                                                                                                         -
               Change in other operational liabilities                                                                                                            2,948
               Change in hedging instruments                                                                                                                           -
               Operation activities cash flow                                                                                                                   (1,078)

                 Investment Activities
                 Collections for regulation of property, furniture and equipment                                                                                       -
                 Payments for acquisition of property, furniture and equipment                                                                                       (2)
                 Collections for regulation in subsidiaries and associated companies                                                                                   -
                 Payments for acquisition in subsidiaries and associated companies                                                                                     -
                 Collections for regulation in long term investments                                                                                                   -
                 Payments for acquisition in long term investments                                                                                                     -
                 Collections in cash (dividends)                                                                                                                       -
                 Payments for acquisition of intangible assets                                                                                                       (1)
                 Collections for regulation in long term assets available for sale                                                                                     -
                 Collections for regulation in long term of other assets                                                                                               -
                 Payments for acquisition in long term of other assets                                                                                                 -
                 Associated collections in hedging instruments                                                                                                         -
                 Associated payments in hedging instruments                                                                                                            -
                 Investment activities cash flow                                                                                                                     (3)

                 Financing activities
                 Collections in equity issues                                                                                                                          -
                 Payments for return in capital stock                                                                                                                  -
                 Payments in cash (dividends)                                                                                                                          -
                 Associated payments in equity repurchase                                                                                                              -
                 Collections in subordinated debentures (capital)                                                                                                      -
                 Associated payments in subordinated debentures (capital)                                                                                              -
                 Financing activities cash flow                                                                                                                        -

                 Net Increase in cash                                                                                                                             (976)


                 Cash flow adjustments in foreign exchange and inflation variations                                                                                    -

                 Cash and equivalent at the beginning of the period                                                                                              1,332

                 Cash and equivalent at the final of the period                                                                                                    356


“These statements of cash flow have been prepared in conformity with the accounting criteria for brokerage firms, issued by the National Banking and Securities
Commission based on Article 205 last paragraph, 210 second paragraph and 211 of the Securities Market Law, which are of a general and mandatory nature and have
been applied on a consistent basis. Accordingly, they reflect the cash entrance and cash outflow of funds relating to the transactions carried out by the Brokerage Firm
through the dates noted above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and
administrative provisions.

These statement of cash flow were approved by the Board Directors under the responsibility of the following officers”.

    GONZALO ROJAS RAMOS                            JEAN-LUC RICH                                KEN PFLUGFELDER          GORDON MACRAE         FRANCISCO LOPEZ CHAVEZ
                                             DIRECTOR GENERAL FINANCE                                                    DIRECTOR GROUP         ASSISTANT DIRECTOR OF
             PRESIDENT                          AND ADMINISTRATION                        DIVISIONAL DIRECTOR AUDIT        ACCOUNTING                 ACCOUTING
www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica




                                                                                                                      Grupo Scotiabank – 2009 Third Quarter Report         23
                                                                                                                                          CONSOLIDATED FINANCIAL STATEMENTS


Attachment 5
                                                            SCOTIA FONDOS, S.A. DE C.V.
                                               SOCIEDAD OPERADORA DE SOCIEDADES DE INVERSION
                                                    GRUPO FINANCIERO SCOTIABANK INVERLAT
                                BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F., C.P. 11700
                                                    BALANCE SHEET AS AT SEPTEMBER 30, 2009
                                                  EXPRESSED IN THOUSANDS OF MEXICAN PESOS

                                                ASSETS                                                                        LIABILITIES AND STOCKHOLDERS’ EQUITY

FUNDS AVAILABLE                                                                                          15   OTHER PAYABLES
                                                                                                               Income tax                                         3,333
                                                                                                               Employee profit sharing                            2,975
                                                                                                               Sundry creditors and other payables               57,880    64,188
FINANCIAL INSTRUMENTS
   Securities – available for trading                                                             118,698
                                                                                                              TOTAL LIABILITIES                                            64,188

OTHER ACCOUNTS RECEIVABLE (NET)                                                                    60,281

                                                                                                              STOCKHOLDERS’ EQUITY

                                                                                                              PAID-IN CAPITAL
                                                                                                               Capital stock                                                2,586
DEFERRED TAXES (NET)                                                                                 1,615

                                                                                                              CAPITAL SURPLUS
OTHER ASSETS                                                                                                   Capital reserves                                     517
  Deferred changes and intangible assets                                              206                      Results from prior years                          86,747
  Short and Long term assets                                                           47              253     Net results                                       26,824   114,088


                                                                                                              TOTAL STOCKHOLDERS’ EQUITY                                  116,674


TOTAL ASSETS                                                                                      180,862     TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                  180,862




                                                                                           MEMORANDUM ACCOUNTS

                               Assets and Liabilities contingent                                                                      1,685
                               Assets in custody or under administration                                                         99,270,978


“These balance sheets were prepared in accordance with the accounting criteria for mutual fund management companies, issued by the National Banking and Securities
Commission based on Article 76 of the Investment Companies Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly,
they reflect the transactions carried out by the Management Companies through the dates indicated above. Furthermore, these transactions were carried out and valued in
accordance with sound practices and the applicable legal and administrative provisions.

These balance sheets were approved by the Board Directors under the responsibility of the following officers.

The historical capital stock amount is $ 2,000 (thousands) as September 30, 2009”.



                                    ERNESTO DIEZ SANCHEZ                                                                                GORDON MACRAE
                                         PRESIDENT                                                                                DIRECTOR GROUP ACCOUNTING




www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
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                                                                                                                            Grupo Scotiabank – 2009 Third Quarter Report        24
                                                                                                                                 CONSOLIDATED FINANCIAL STATEMENTS




                                                  SCOTIA FONDOS, S.A. DE C.V.
                                     SOCIEDAD OPERADORA DE SOCIEDADES DE INVERSION
                                          GRUPO FINANCIERO SCOTIABANK INVERLAT
                      BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                           STATEMENT OF INCOME FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                        EXPRESSED IN THOUSANDS OF MEXICAN PESOS



                Commissions and fees collected                                                                                                                                       395,625
                Commissions and fees paid                                                                                                                                            355,514

                Service Income                                                                                                                                                         40,111

                Valuation gain (loss) on securities                                                                                                              314
                Gain and loss on purchase and sale of securities                                                                                               3,951                    4,265

                Total Operating Income                                                                                                                                                 44,376

                Administrative expenses                                                                                                                                                 6,742

                Operating income                                                                                                                                                       37,634

                Other income                                                                                                                                      66
                Other expense                                                                                                                                  1,189                  (1,123)

                Net income before income tax                                                                                                                                           36,511

                Current income tax                                                                                                                             9,983
                Deferred income tax                                                                                                                            (296)                    9,687

                Results before subsidiaries unconsolidated and associated companies                                                                                                    26,824



                Results from continuing operations                                                                                                                                     26,824



                Net income after tax and PTU                                                                                                                                           26,824



“These statement of income were prepared in accordance with the accounting criteria for mutual fund management companies, issued by the National Banking and Securities Commission based on
Article 76 of the Investment Companies Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect the revenues and costs relating to
the transactions carried out by the Management Companies through the dates indicated above. Furthermore, these transactions were carried out and valued in accordance with sound practices and
the applicable legal and administrative provisions.

These statement of income were approved by the Board Directors under the responsibility of the following officers”.




                                    ERNESTO DIEZ SANCHEZ                                                                              GORDON MACRAE
                                         PRESIDENT                                                                              DIRECTOR GROUP ACCOUNTING




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                                                                                                                      Grupo Scotiabank – 2009 Third Quarter Report                                  25
                                                                                                                                                                                        CONSOLIDATED FINANCIAL STATEMENTS

                                                                                  SCOTIA FONDOS, S.A. DE C.V.
                                                                      SOCIEDAD OPERADORA DE SOCIEDADES DE INVERSION
                                                                           GRUPO FINANCIERO SCOTIABANK INVERLAT
                                                      BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                             STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD DECEMBER 31, 2008 TO SEPTEMBER 30, 2009
                                                                         EXPRESSED IN THOUSANDS OF MEXICAN PESOS


                                                                                                                  Paid-in Capital                                                    Capital Surplus

                                                                                                                                                                                                                                           Total
                                           CONCEPT                                                                           Premium from the       Statutory        Results from             Employee benefits                        stockholders’
                                                                                                         Capital stock                                                                                                Net income
                                                                                                                               sale of shares       reserves        previous years              adjustment                                 equity


Balances as of December 31, 2008                                                                                  2,586                         -           517                54,926                             -          31,821             89,850

ITEMS RELATED TO STOCKHOLDERS DECISIONS

Issuance of shares
Capitalisation of profits                                                                                                                                                                                                                              -
Creation of reserves                                                                                                                                                                                                                                   -
Transfer of prior year's results                                                                                                                                                                                                                       -
Dividend payment                                                                                                                                                                                                                                       -
                                                                                                                                                                               31,821                                       (31,821)                   -
                                                                                                                                                                                                                                                       -
Total                                                                                                                    -                      -               -              31,821                             -         (31,821)                   -

ITEMS RELATED TO RECOGNITION OF COMPREHENSIVE INCOME
Integral Profit
     -Net income                                                                                                                                                                                                             26,824             26,824
     -Gain from valuation of available-for-sale securities                                                                                                                                                                                           -
     -Gain from holding non-monetary assets                                                                                                                                                                                                          -

Total                                                                                                                    -                      -               -                      -                          -          26,824             26,824

Balances as of September 30, 2009                                                                                 2,586                         -           517                86,747                             -          26,824            116,674


“These statement of changes in stockholders’ equity have been prepared in accordance with the accounting criteria for mutual fund management companies, issued by the National Banking and Securities Commission based on Article 76 of
the Investment Companies Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect all the stockholders’ equity account entries relating to the transactions carried out by the
Management Companies through the dates indicated above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative provisions.

These statement of changes in stockholders’ equity were approved by the Board Directors under the responsibility of the following officers”.


                                                    ERNESTO DIEZ SANCHEZ                                                                                                           GORDON MACRAE
                                                         PRESIDENT                                                                                                           DIRECTOR GROUP ACCOUNTING


www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
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                                                                                                                                                                         Grupo Scotiabank – 2009 Third Quarter Report                     26
                                                                                                                      CONSOLIDATED FINANCIAL STATEMENTS



                                                                     SCOTIA FONDOS, S.A. DE C.V.
                                                        SOCIEDAD OPERADORA DE SOCIEDADES DE INVERSION
                                                             GRUPO FINANCIERO SCOTIABANK INVERLAT
                                         BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                             STATEMENT OF CASH FLOW, FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                                           EXPRESSED IN THOUSANDS OF MEXICAN PESOS

              Net income                                                                                                                                      26,824
              Adjustments for items that not imply cash flow :                                                                                            -
              Profit or loss valuation associated with investment and financing activities                                                            (314)
              Provision for difficult or not collection                                                                                                   -
              Losses for deterioration or cancel effect associated with investment and funding activities                                                 -
              Depreciation and amortisation                                                                                                               -
              Provisions                                                                                                                                471
              Income tax (caused and deferred)                                                                                                        (296)
              Participation in results unconsolidated subsidiaries and associated companies                                                               -
              Discontinous operations                                                                                                                     -      (139)

              Operation activities
              Change in securities investment                                                                                                                  (29,016)
              Change in repurchase agreements (debtor)                                                                                                                -
              Change in other operational assets                                                                                                               (20,222)
              Change in bank and other loans                                                                                                                          -
              Change in collateral sold or in guarantee                                                                                                               -
              Change in other operational liabilities                                                                                                            22,555
              Operation activities cash flow                                                                                                                   (26,683)

              Investment activities
              Collections for regulation of property, furniture and equipment                                                                                          -
              Payments for acquisition of property, furniture and equipment                                                                                            -
              Collections for regulation in subsidiaries and associated companies                                                                                      -
              Payments for acquisition in subsidiaries and associated companies                                                                                        -
              Collections for regulation in long term investments equities                                                                                             -
              Payments for acquisition in long term investments equities                                                                                               -
              Collections in cash (dividends)                                                                                                                          -
              Payments for acquisition of intangible assets                                                                                                            -
              Collections for regulation in long term assets available for sale                                                                                        -
              Collections for regulation in long term of other assets                                                                                                  -
              Payments for acquisition in long term of other assets                                                                                                    -
              Investment activities cash flow                                                                                                                          -

              Financing activities
              Collections in equity issues                                                                                                                           -
              Payments for return in capital stock                                                                                                                   -
              Payments in cash (dividends)                                                                                                                           -
              Associated payments in equity repurchase                                                                                                               -
              Financing activities cash flow                                                                                                                         -
              Net Increase in cash                                                                                                                                   2
              Cash flow adjustments in foreign exchange and inflation variations                                                                                     -
              Cash and equivalent at the beginning of the period                                                                                                    13
              Cash and equivalent at the final of the period                                                                                                        15



“These statement of changes in financial position have been prepared in accordance with the accounting criteria for mutual fund management companies, issued by the
National Banking and Securities Commission based on Article 76 of the Investment Companies Law, which are of a general and mandatory nature and have been applied
on a consistent basis. Accordingly, they reflect the sources and application of funds relating to the transactions carried out by the Management Companies through the
dates indicated above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and administrative
provisions.

These statement of changes in financial position were approved by the Board Directors under the responsibility of the following officers”.


                                    ERNESTO DIEZ SANCHEZ                                                                  GORDON MACRAE
                                         PRESIDENT                                                                  DIRECTOR GROUP ACCOUNTING




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                                                                                                              Grupo Scotiabank – 2009 Third Quarter Report         27
                                                                                                                                                                             CONSOLIDATED FINANCIAL STATEMENTS

                                                                                             SCOTIA FONDOS, S.A. DE C.V.
                                                                                SOCIEDAD OPERADORA DE SOCIEDADES DE INVERSION
                                                                                     GRUPO FINANCIERO SCOTIABANK INVERLAT
                                                                 BOSQUE DE CIRUELOS No. 120 PISO 4 COL. BOSQUES DE LAS LOMAS, MEXICO D.F. C.P. 11700
                                                                       STATEMENT OF INVESTMENT LOAN VALUATION, AS AT SEPTEMBER 30, 2009
                                                                                   EXPRESSED IN THOUSANDS OF MEXICAN PESOS

                                                                                                                                No. OF        No. OF        No. OF        AVERAGE        TOTAL                    TOTAL
REFERENCE           INVESTMENT                                          SECURITY         MARKET           RATE     CREDIT                                                                             MARKET               DAYS TO
                                          ISSUER          SERIES                                                              SECURITIES    SECURITIES   SECURITIES      ACQUISITION   ACQUISITION               MARKET
 NUMBER                TYPE                                               TYPE            RATE            TYPE     RATING                                                                              PRICE               MATURITY
                                                                                                                             MANAGEMENT    SETTLEMENTS     ISSUED        COST / UNIT      COST                    VALUE


                           D             SCOTIAG            M6              51                0               TR   AAA/2 F    3,363,944      133,618       206,896,552    35.282829      118,689     35.285421   118,698        0




                                         TOTALS:                                                                                                                                         118,689                 118,698




“These statement of investment loan valuation have been prepared in accordance with the accounting criteria for mutual fund management companies, issued by the National Banking and Securities Commission based on
Article 76 of the Investment Companies Law, which are of a general and mandatory nature and have been applied on a consistent basis. Accordingly, they reflect the sources and application of funds relating to the
transactions carried out by the Management Companies through the dates indicated above. Furthermore, these transactions were carried out and valued in accordance with sound practices and the applicable legal and
administrative provisions.

These statement of investment loan valuation were approved by the Board Directors under the responsibility of the following officers”.



                                                      ERNESTO DIEZ SANCHEZ                                                                                                     GORDON MACRAE
                                                           PRESIDENT                                                                                                     DIRECTOR GROUP ACCOUNTING




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                                                                                                                                                               Grupo Scotiabank – 2009 Third Quarter Report                28
                                                                                                                                           CONSOLIDATED FINANCIAL STATEMENTS
Attachment 6
                                                                           SCOTIA AFORE, S.A. DE C.V.
                                                                  ADMINISTRADORA DE FONDOS PARA EL RETIRO
                                                                    GRUPO FINANCIERO SCOTIABANK INVERLAT
                                                          LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                                                   BALANCE SHEET AS AT SEPTEMBER 30, 2009
                                                            EXPRESSED IN THOUSANDS OF MEXICAN PESOS, EXCEPT TITLES

                                            ASSETS                                                                               LIABILITIES AND STOCKHOLDERS´ EQUITY

INVESTMENT                                                                                          LIABILITIES
Special investment provision:                                                                         Other obligations                                                                          9,789
   Siefore Basica 1                                                                     2,326
   Siefore Basica 2                                                                     6,633          Provision for various obligations                                                         9,441
   Siefore Basica 3                                                                     8,307
   Siefore Basica 4                                                                     9,258              Total Liabilities                                                                    19,230
   Siefore Basica 5                                                                     4,913
   Siefore Ahorro Voluntario CP 1                                                         807
   Special investment provision restated                                                (162)
Investment in Capital stock minimum:
   Siefore Basica 1                                                                     4,000       STOCKHOLDERS´ EQUITY
   Siefore Basica 2                                                                       100
   Siefore Basica 3                                                                       100       Paid-in Capital
   Siefore Basica 4                                                                       100         Historical fixed                                                                        56,000
   Siefore Basica 5                                                                       100         Restated fixed                                                                           2,629
   Siefore Ahorro Voluntario CP 1                                                         100         Historical variable                                                                    201,200
   Investment in Capital stock minimum restated                                         1,218         Restated variable                                                                        1,751
                                                                                                    Retained Earnings- Prior Periods                                                       (136,270)
      Total Investment                                                                 37,800       Excess or insufficiency in stockholder´s equity                                                -
                                                                                                    Net income                                                                              (52,261)
FUNDS AVAILABLE
  Bank                                                                                  4,299          Total Stockholders´ Equity                                                               73,049
  Available investments                                                                     -

      Total Fund Available                                                              4,299

OTHER RECEIVABLES
  Various debtors                                                                       2,059
  Commissions collected                                                                     -
  Employees                                                                               121

      Total Other receivables                                                           2,180

OTHER INVESTMENT
  Investments in service entities                                                         381
  Other investment                                                                      5,878

      Total other investment                                                            6,259

PROPERTY,FURNITURE AND EQUIPMENT (NET)
  Furniture and equipment (net)                                                         2,379
       Total furniture and equipment (net)                                              2,379


ANTICIPATED PAYMENTS AND DEFERRED CHARGES (NET)
  Deferred Tax                                                                          6,636
  Anticipated payments (net)                                                           11,206
  Compensation to employees promoted                                                   21,520

      Total Anticipated payments (net)                                                 39,362

       TOTAL ASSET                                                                     92,279          TOTAL LIABILITIES AND STOCKHOLDERS´ EQUITY                                                92,279

                                                                                  MEMORANDUM DEBT ACCOUNTS

                                     Authorised Capital Stock*                                                                                              187,200
                                     Stocks issued (authorized number)                                                                                  187,200,000
                                     Housing contributions*                                                                                               1,640,913
                                     Siefores stocks, third position (number)                                                                                     6
                                     Siefores stocks, own position (number)                                                                              30,969,005
                                     ISSSTE pension bond                                                                                                     14,390
                                     Housing contributions (Fovisste)                                                                                         6,732
                                     Investment management employees (number)                                                                         2,974,461,615
                                     Accumulated withdrawals*                                                                                               615,542
                                     Accumulated retirements*                                                                                                41,073
                                     Internal Control of Administrator                                                                                        3,030
                                     Member accounts of banks                                                                                                   470
                                     Transfer request                                                                                                        47,971

                                     * Historical pesos

 " Balance sheet has been formulated in agreement to the rules of group of accounts established by the National Commission of the System of Saving for the Retirement, (“Comision Nacional de
 Sistema de Ahorro para el Retiro”) and under the strict responsibility of the executives who sign ":


                                                          Pablo Alberto Magaña Arana                      Brenda Patricia Rivera Quijada
                                                            President Scotia Afore                     Manager of Administration and Treasury

      www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
      www.cnbv.gob.mx/estadistica




                                                                                                                               Grupo Scotiabank – 2009 Third Quarter Report                              29
                                                                                                                                      CONSOLIDATED FINANCIAL STATEMENTS




                                                               SCOTIA AFORE, S.A. DE C.V.
                                                           RETIREMENT FUND ADMINISTRATOR
                                                        GRUPO FINANCIERO SCOTIABANK INVERLAT
                                              LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
                                          STATEMENT OF INCOME FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                           EXPRESSED IN THOUSANDS OF MEXICAN PESOS, EXCEPT APPRASIAL PRICE


                   Income
                     Commissions                                                                                                                        36,836
                     Other revenues                                                                                                                      4,185
                     Participation in results of subsidiaries and associated companies                                                                   3,163
                   Total income                                                                                                                                              44,184

                   Egresos:
                     Personnel remunerations                                                                                                            11,674
                     Personnel services                                                                                                                  3,351
                     Personnel and Commissioners remunerations                                                                                             250
                     Professional fees                                                                                                                   3,174
                     Full revenues                                                                                                                         870
                     Promotion expense                                                                                                                       6
                     Administrative and operating expenses                                                                                              22,651
                     Commisions                                                                                                                             47
                     Administrative services                                                                                                            11,321
                     Taxes                                                                                                                               5,564
                     Depreciation                                                                                                                          320
                     Amortization                                                                                                                          195
                     Not deducible expenses                                                                                                              2,126
                     Personnel promotion remuneration                                                                                                   28,000
                     Personnel services to the promotion                                                                                                 6,595
                     Financial expenses                                                                                                                    293
                     Monetary position result                                                                                                                8
                   Total expenses                                                                                                                                            96,445

                   Net Income                                                                                                                                              (52,261)

                   The all shares management by the Investment society AFORE are shown on September 30, 2009.

                                                                                                Shares          Appraisal          Total
                                                                                              outstanding         Price           amount
                                  Basic Investment Society 1:
                                  Own position Afore                                           6,558,030       $ 1.288958          $ 8,453
                                  Worker Appraisal                                           308,487,933       $ 1.288958         397,628
                                  Basic Investment Society 2:
                                  Own position Afore                                           5,309,991       $ 1.203771          $ 6,392
                                  Worker Appraisal                                           549,003,469       $ 1.203771         660,875
                                  Basic Investment Society 3:
                                  Own position Afore                                           7,032,796       $ 1.199071          $ 8,433
                                  Worker Appraisal                                           854,283,330       $ 1.199071       1,024,347
                                  Basic Investment Society 4:
                                  Own position Afore                                           7,782,550       $ 1.202013            9,354
                                  Worker Appraisal                                           937,790,518       $ 1.202013       1,127,236
                                  Basic Investment Society 5:
                                  Own position Afore                                           3,564,352       $ 1.219520          $ 4,347
                                  Worker Appraisal                                           309,991,796       $ 1.219520         378,041
                                  Volunteer and save investment society:
                                  Own position Afore                                            721,286        $ 1.138390            $ 821
                                  Worker Appraisal                                            14,904,569       $ 1.138390          16,967
                                  Societies:
                                  Own position Afore                                         30,969,005                          $ 37,800
                                  Worker Appraisal                                          2,974,461,615                       3,605,094
                                                                                                                 Society
                                                                                                                  Total        $ 3,642,894



“This statement of income has been presented in accordance with the rules established by the National Commission for the System of Saving for the Retirement (“Comision Nacional de Sistema de Ahorro
para el Retiro”) and are the responsibility of the undersigned officers:



                                        Pablo Alberto Magaña Arana                                                                        Brenda Patricia Rivera Quijada
                                          President Scotia Afore                                                                       Manager of Administration and Treasury

www.scotiabank.com.mx/QuienesSomos/quien/Info_coporativa/estados_financieros/Pages/Estados_financieros.aspx
www.cnbv.gob.mx/estadistica
                                                                                                                        Grupo Scotiabank – 2009 Third Quarter Report                               30
                                                                                                                        CONSOLIDATED FINANCIAL STATEMENTS



                                             SCOTIA AFORE, S.A. DE C.V.
                                     ADMINISTRADORA DE FONDOS PARA EL RETIRO
                                      GRUPO FINANCIERO SCOTIABANK INVERLAT
                           LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
         STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD DECEMBER 31, 2008 TO SEPTEMBER 30, 2009
                                     EXPRESSED IN THOUSANDS OF MEXICAN PESOS

                                                                            Paid-in Capital                                      Adjustment
                                                                                                               Retained                                              Total
                                                                                                                                     for              Net
                                                                     Restated            Restated             Earnings –                                         Stockholders
                                                                                                                                 Retirement         Income
                                                                      fixed              variable             Prior Period                                          Equity
                                                                                                                                  Liabilities
Balances as of December 31, 2008                                           58,629            132,951               (49,805)                     -   (86,465)          55,310

Items related to stockholders decisions

Transfer of prior year’s results                                                                                   (86,465)                          86,465                -
Capital contribution                                                                           70,000                                                                 70,000



Inherent movements at the integral result:

Net Income                                                                                                                                          (52,261)         (52,261)
Adjust of additional liability recognized in net
stockholder’s equity of deferred taxes                                                                                                                                      -
                                                                                  -                   -                      -                  -            -              -

Balances as of September 30, 2009                                          58,629            202,951              (136,270)                     -   (52,261)          73,049



“This statement of changes in stockholders’ equity has been presented in accordance with the rules established by the National Commission for
the Retirement Saving System (“Comision Nacional de Sistema de Ahorro para el Retiro”) and are the responsibility of the undersigned officers:



                         Pablo Alberto Magaña Arana                                                              Brenda Patricia Rivera Quijada
                           President Scotia Afore                                                             Manager of Administration and Treasury


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                                                                                                              Grupo Scotiabank – 2009 Third Quarter Report                  31
                                                                                                                       CONSOLIDATED FINANCIAL STATEMENTS

                                                SCOTIA AFORE, S.A. DE C.V.
                                        ADMINISTRADORA DE FONDOS PARA EL RETIRO
                                         GRUPO FINANCIERO SCOTIABANK INVERLAT
                               LORENZO BOTURINI No. 202 COL. TRANSITO, MEXICO, D.F. C.P. 06820
               STATEMENT OF CHANGES IN THE FINANCIAL POSITION FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 2009
                                        EXPRESSED IN THOUSANDS OF MEXICAN PESOS


               Operating Activities
                Net Income                                                                                                                 (52,261)
                Item nor requiring (providing) funds
                   Depreciation and amortisation                                                                                                 515
                   Subsidiaries results participation                                                                                        (3,163)
                   Deferred taxes                                                                                                            (2,563)

                     Resources used in operation                                                                                           (57,472)

                 (Investment net applied to) net financial derived of operational accounts:
                   Various debtors                                                                                                             1,718
                   Anticipated payments and deferred charges                                                                                 (7,993)
                   Other obligations                                                                                                           3,737
                   Reserves for various obligations                                                                                              249

                     Resources used in operational activities                                                                              (59,761)

                     Resources generated from financial activities through stockholders equity contributions                                 70,000

               Investing Activities
                Decrease (increase) of special investment provisions and siefore’s investment capital stock
                                                                                                                                             (8,756)
                minimum
                Acquisition of equipment and furniture                                                                                        (178)

                     Funds provided by investing activities                                                                                  (8,934)

                     Increase of available                                                                                                    1,305

               Funds Available
                At beginning of year                                                                                                          2,994

                 At end of year                                                                                                               4,299




“This statement of changes in financial position has been presented in accordance with the rules established by the National Commission for the
Retirement Saving System (“Comision Nacional de Sistema de Ahorro para el Retiro”) and are the responsibility of the undersigned officers:



                          Pablo Alberto Magaña Arana                                                              Brenda Patricia Rivera Quijada
                            President Scotia Afore                                                             Manager of Administration and Treasury




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                                                                                                              Grupo Scotiabank – 2009 Third Quarter Report   32
                                                                                                                          ADDITIONAL INFORMATION

Attachment 7 Grupo Scotiabank

Grupo Scotiabank
Financial Indicators
                                                                                                      2009                                  2008
                                                                                          Q3             Q2                Q1             Q4             Q3
ROE
(Annualised quarterly net income / average capital for the quarter)                       9.1               5.8            7.5            7.5          11.6
ROA
(Annualised quarterly net income / average of total assets for the quarter)               1.5               1.0            1.3            1.3            2.0
Net Interest margin
(Net interest margin including credit loss provisions / average earning assets)           5.1               5.0            4.3            4.2            4.9
Operating efficiency
(Annualised quarterly operating expenses / average of total assets for the quarter)       6.3               6.1            5.8            6.1            5.7
Delinquency index
(Balance of past due loans at quarter end / balance total loans)                          3.8               4.3            4.2            3.6            3.1
Reserve coverage of past due loans
(Allowance for credit losses at quarter end / balance of past due loans)                108.7              96.8       104.6          108.1            105.1
Net capital / Credit risk adjustment assets                                             20.87             20.28       19.81          21.12            21.80
Net capital / Total risk adjustment assets (credit, market and operational risk)        16.45             15.98       14.96          15.50            16.55
Liquidity
(Liquid assets / liquid liabilities)                                                     68.0              58.3           65.3           67.1          67.7
Note: The 2009 figures incluye the netting of Restricted Investment related to Repos.




Grupo Scotiabank
Segments; as at September 30, 2009
(P$ millions)
                                                                                          Credit &           Trading &                             Total
                                                                                                                                 Other
                                                                                          Services           Treasury                              Group
Net interest income                                                                               5,945             928              172             7,045
Other income                                                                                      3,063             421              695             4,179
Revenue                                                                                           9,008           1,349              867            11,224
Provision for credit losses                                                                     (2,331)               -                -           (2,331)
Total revenue                                                                                     6,677           1,349              867             8,893
Operating expenses                                                                              (5,871)           (424)            (545)           (6,840)
Participation in results of subsidiaries and associated companies                                     -               -                3                 3
Profit before income tax and PTU                                                                    806             925              325             2,056
Income tax and PTU                                                                                                                                   (604)
Profit after income tax and PTU                                                                                                                      1,452



Related-party transactions

During the normal course of business, The Group carries out transactions with related parties. According to the
Group’s policies, the Bank’s Board of Directors authorizes all credit transactions with related parties, which are
granted at market rates with guarantees and terms in accordance with sound banking practices.

At September 30, 2009 principal balances with related parties are for bank loans granted of P$1,910 million.




                                                                                            Grupo Scotiabank – 2009 Third Quarter Report                33
                                                                                                   ADDITIONAL INFORMATION

Financial Information Disclosure

The Bank of Nova Scotia (“BNS”), the controlling entity, provides diversified financial services globally, and is listed
on the Toronto and New York stock exchanges. As issuer, BNS issues, amongst other information, annual and
quarterly financial information prepared in accordance with Canadian generally accepted accounting principles
(Canadian GAAP). The consolidated financial statements also comply with the accounting requirements of the
Canadian Bank Act. The financial information includes the results of entities that are consolidated in Grupo Financiero
Scotiabank Inverlat (“SBM”).

Based on the requirements set forth by the Comision Nacional Bancaria y de Valores (“CNBV”), SBM issues, through
its electronic page in the world wide web (“Internet”), its consolidated financial statements with figures as of March,
June, September and December, prepared in accordance with the Accounting Criteria for Financial Institutions defined
by the CNBV.

Reconciliation of Mexican and Canadian GAAP

The net income of MXN 372 million reported by SBM for the quarter ending June 30, 2009 is different from the MXN
653 million (CAD 56 million) figure reported by BNS since financial institutions in Mexico prepare and present their
financial statements according to Mexican GAAP, which differs in some aspects from Canadian GAAP. The
reconciling items can be grouped as follows:

Non-controlling interest - BNS records, as an expense, the non-controlling interest in SBM’s net income.

Acquisition accounting and other Canadian GAAP adjustments- On acquisition of SBM, BNS was required to
record its share of SBM’s assets and liabilities at their fair value. As a result, in subsequent periods, BNS’ share of
SBM’s net income is affected by these differences in carrying values. There are also other measurement differences
between Mexican and Canadian GAAP, which are adjusted by BNS.

Summary of the main reconciling items between net income reported by SBM and net income reported by BNS for the
quarter ending June 30, 2009.




        In MXN millions (except as indicated)                                                         Q2/09
        SBM consolidated net income under Mexican GAAP – per the June 2009 Press Release                372

        Non-controlling interest – 2.7%                                                                 (10)
        Acquisition accounting and other Canadian GAAP adjustments                                      291
        SBM consolidated net income under Canadian GAAP as reported by BNS                              653

        SBM consolidated net income under Canadian GAAP reported by BNS in Canadian
                                                                                                     CAD $56
        dollars




                                                                             Grupo Scotiabank – 2009 Third Quarter Report   34
                                                                                              ADDITIONAL INFORMATION

Internal Control

The internal control policies establish the internal control framework for Grupo Scotiabank and its subsidiaries and the
control environment in which they operate, with the objective of having a reasonable level of confidence that the
institution operates in prudent and sound manner.
An internal control model has been established to clearly identify responsibilities, subject to the premise that all the
members of GSB share responsibility concerning internal control matters. The internal control model is composed of:
 A Board of Directors that is responsible for overseeing that GSB operates in accordance with sound practices and
     that it is effectively and efficiently managed. The Board of Directors are also responsible for approving GSB
     objectives and Internal Control Policies, the Conduct in Business Guidelines and other internal conduct manuals, as
     well as the organization’s structure. The Board is also responsible for appointing GSB internal and external
     auditors, as well as its key officers.
 An Audit Committee assists the Board of Directors in determining and updating all internal control policies and
     procedures, and in verifying and evaluating them. The Audit Committee is composed of three regular directors and
     is presided over by an independent director. It meets on a monthly basis.
 The Executive Management is responsible for establishing the internal control system that manages all GSB
     subsidiaries and verifies that they operate efficiently and effectively.
 Organizational and procedural controls supported by an effective management information system (MIS), for the
     Executive that allows managing GSB’s exposure to risk.
 An independent audit area for purposes of supervising the effectiveness and efficiency of all controls in place.
 In additional for compliance and controllership activities, an independent area works for insurance integrity of the
     Internal Control System.
 Management Integral Risk Area, (UAIR like their initials in Spanish) gives support in all the process areas of risk
     control establishing policies and methods, keeping development and promotion which includes Self Assessment's
     methodology of Operative Risk.
 Very clear mandates in terms that each one of the areas and individuals, that compose GSB, is responsible for
     observing all internal control aspects and complying with the laws, regulations and internal policies of the
     institution.
In addition to the foregoing, GSB conducts itself in accordance with all applicable laws and regulations, it abides by
and observes all best corporate practices, and keeps its annual certification under the 404 rule Sarbanes Oxley Law in
2008, in its capacity as a subsidiary of The Bank of Nova Scotia in Canada.
Treasury Policies
Grupo Scotiabank (GSB) administers and maintains conservative and adequate liquidity levels, always within the best
industry practices and in accordance with regulatory requirements. To this end, a stable, traditional and well-diversified
deposit base is maintained as well as an active participation in the inter-bank market. In addition to the solid deposit
base, GSB has at its disposal a wide range of lines of credit for working capital purposes, as well as irrevocable letters
of credit that can be used to cover part of its established liquid asset requirements required by the Bank of Mexico.
Together with the above, The Group has adopted policies, procedures and clear limits for liquidity administration
which outline the timely steps to follow to maintain sufficient liquidity gaps and liquid assets in case of some
unforeseen contingency. These policies promote the uniform distribution of cash flows and try to minimize the
liquidity gaps between assets and liabilities, taking into consideration the historic movements and the various products
that make up the liquidity gaps.

The Bank of Directors and the Risk Committee have delegated to the Asset and Liability Committee, the
administration and monitoring of liquidity risk within the parameters and limits established by the Board. The financial
position with respect to liquidity, re-pricing, securities investment, risk and intermediation positions are periodically
monitored by the Risk Administration area, that in turn, informs the Asset and Liability Committee and the Risk
Committee for their analysis, follow-up and action as required. The Group Treasury Department is responsible for
managing the liquidity risk and strategies to cover the liquidity and re-pricing gaps including taking risk positions and
investing in securities.

                                                                        Grupo Scotiabank – 2009 Third Quarter Report   35
                                                                                                                     ADDITIONAL INFORMATION


Attachment 8 Scotiabank Mexico


Scotiabank Mexico
Financial Indicators
                                                                                                  2009                                 2008
                                                                                          Q3         Q2               Q1             Q4           Q3
ROE
(Annualised quarterly net income / average capital for the quarter)                       9.2         6.0             7.3            9.9         12.5
ROA
(Annualised quarterly net income / average of total assets for the quarter)               1.5         1.0             1.2            1.7          2.1
Net Interest margin
(Net interest margin including credit loss provisions / average earning assets)           5.1         4.9             4.1            4.1          4.9
Operating efficiency
(Annualised quarterly operating expenses / average of total assets for the quarter)       6.0         5.7             5.5            5.8          5.5
Delinquency index
(Balance of past due loans at quarter end / balance total loans)                          3.8         4.3             4.2            3.6          3.1
Reserve coverage of past due loans
(Allowance for credit losses at quarter end / balance of past due loans)                108.7        96.8           104.6          108.1        105.1
Net capital / Credit risk adjustment assets                                             20.87       20.28           19.81          21.12        21.80
Net capital / Total risk adjustment assets (credit, market and operational risk)        16.45       15.98           14.96          15.50        16.55
Liquidity
(Liquid assets / liquid liabilities)                                                     61.1        52.5            59.1           62.5         58.4
Note: The 2009 figures incluye the netting of Restricted Investment related to Repos.




Scotiabank Mexico
Performing Loan Portfolio; as at September 30, 2009                                      Pesos          USD                 Udis              Total
(P$ millions)
Business loans                                                                           24,192             7,288               -             31,480
Loans to financial institutions                                                           3,330                 -               -              3,330
Loans to government entities                                                              4,992                 -               -              4,992
Consumer loans                                                                           17,641                 -               -             17,641
Mortgages                                                                                36,242               189             466             36,897
Total                                                                                    86,397             7,477             466             94,340




Scotiabank Mexico
Past-due Loan Portfolio; as at September 30, 2009                                        Pesos          USD                 Udis              Total
(P$ millions)
Business loans                                                                              480               24                -                504
Loans to financial institutions                                                               4                -                -                  4
Consumer loans                                                                            1,220                -                -              1,220
Mortgages                                                                                 1,895                -              134              2,029
Total                                                                                     3,599               24              134              3,757




                                                                                            Grupo Scotiabank – 2009 Third Quarter Report          36
                                                                                                      ADDITIONAL INFORMATION




Scotiabank Mexico                                                           September             June               September
Financial Information by product and region                                  30, 2009            30, 2009             30, 2008
Performing Loan Portfolio
 Metro Division                                                                 49.1%                49.8%               54.0%
   Metro North                                                                  20.6%                19.6%               18.1%
   Metro South                                                                  28.5%                30.2%               35.9%
 West Division                                                                  24.8%                24.2%               21.6%
   Metro East                                                                   13.0%                12.6%               10.7%
   Mexico Central                                                               11.8%                11.6%               10.9%
 East Division                                                                  26.1%                26.0%               24.4%
   Mexico North                                                                 14.6%                14.4%               13.8%
   Mexico South                                                                 11.5%                11.6%               10.6%
Past-due Loan Portfolio
 Metro Division                                                                 51.5%                50.1%               51.0%
   Metro North                                                                  25.4%                23.7%               18.2%
   Metro South                                                                  26.1%                26.4%               32.8%
 West Division                                                                  25.4%                26.6%               24.9%
   Metro East                                                                   11.5%                11.8%               12.3%
   Mexico Central                                                               13.9%                14.8%               12.6%
 East Division                                                                  23.1%                23.3%               24.1%
   Mexico North                                                                 11.0%                10.8%               10.3%
   Mexico South                                                                 12.1%                12.5%               13.8%

Scotiabank Mexico
Reconciliation of Past Due Loans
(P$ millions)
Balance as at June 30, 2009                                                                                              4,175
Transfers (to) / from current loans                                                                                        432
Restructured loans                                                                                                           -
Loans recovered                                                                                                           (22)
Loans written off                                                                                                        (831)
Foreign exchange                                                                                                             3
Balance as at September 30, 2009                                                                                         3,757

Scotiabank Mexico
Allowance for Credit Losses
(P$ millions)
Balance as at June 30, 2009                                                                                              4,039
Plus:    Reserves created                                                                                                  608
         Reserves created against equity (Credit card)                                                                     265
Less:    Reserves taken into income                                                                                          -
         Transfer from Trust to Bank                                                                                         -
         Adjudications                                                                                                      23
         Charge-offs and applications relating to regular loans                                                            808
              Commercial                                                                                 -
              Mortgage                                                                                 190
              Consumer                                                                                 618
         Charge-offs and applications relating to debtor support programs                                                    3
Foreign exchange                                                                                                             6
Balance as at September 30, 2009                                                                                         4,084

Scotiabank Mexico
Authorized financing that exceeds 10% Basic Capital
(P$ millions as at September 30, 2009)
   No. of Credits                         Amount                                            % Basic Capital
          -                                 -                                                     -
Financing to the 3 principal creditors                                                                           3,848


                                                                               Grupo Scotiabank – 2009 Third Quarter Report      37
                                                                                                                ADDITIONAL INFORMATION


Capital management

The Bank has a capital management process in place to measure, deploy and monitor its available capital and assess
its adequacy. The objectives and practices of the Bank’s capital management process are consistent with those in
place as at September 30, 2009.
The two primary capital ratios used to assess capital adequacy are Tier 1 and total Tier 2 capital ratios, which are
determined by dividing those capital components by risk-weighted assets. Risk-weighted assets represent the Bank’s
exposure to credit, market and operational risk and are computed by applying a combination of the Bank’s internal
credit risk parameters. On September 30, 2009 the Bank’s Tier 1 capital ratio was 20.87% and total Tier 2 capital
ratio was 16.45%.

 Scotiabank Mexico – Capitalisation                                                        September            June            September
 (P$ millions; Consolidated with subsidiaries and UDI trusts)                             30, 2009 (*)         30, 2009          30, 2008
 Share capital                                                                                 24,476            24,216            24,728
 Less: Investment in financial companies                                                          249               363               459
        Investment in Non-financial companies                                                     146               129               105
       Other non-allowable assets and deferred expenses                                         1,925             1,850             1,567
 Plus: Allowable deferred tax                                                                       -                 -                 -
 Basic capital (tier 1)                                                                        22,156            21,874            22,597
 Allowable reserves against credits                                                               381               381               433
 Complementary capital (tier 2)                                                                   381               381               433
 Total net capital (tier 1 + 2)                                                                22,537            22,255            23,030
(*) Preliminary figures pending Banco de Mexico approval.



                                                                                                              Risk asset         Capital
 Scotiabank Mexico – Risk Assets                                                                              equivalent       requirement
(constant P$ millions as at September 30, 2009)
                                                                                                                 (*)               (*)
                  Operation in MXN at nominal rates                                                                 16,136                1,291
                  Debt Instrument operations with “sur-charge” and adjustable rate                                     629                   50
                  Operation in MXN at real rates or rates denominated in UDIS                                        1,761                  141
   Market         Positions in UDIS or with yields related to inflation accounting                                       1                    -
    Risk          Operation in foreign currencies at nominal rates                                                     228                   18
                  Foreign exchange positions                                                                             1                    -
                  Securities positions or with yields related to a group of securities                                 605                   48
                                                                                         Total market risk          19,361                1,548
                  Group III (weighted at 20%)                                                                        3,175                  254
                  Group III (weighted at 23%)                                                                          206                   16
                  Group III (weighted at 50%)                                                                        2,154                  172
                  Group III (weighted at 100%)                                                                          13                    1
                  Group IV (weighted at 20%)                                                                           958                   77
                  Group V (weighted at 50%)                                                                          2,481                  198
    Credit        Group VI (weighted at 50%)                                                                         8,777                  702
     Risk         Group VI (weighted at 75%)                                                                         9,926                  794
                  Group VI (weighted at 100%)                                                                       25,144                2,012
                  Group VII (weighted at 100%)                                                                      27,953                2,236
                  Group VII (weighted at 150%)                                                                         753                   60
                  Group VIII (weighted at 125%)                                                                      2,058                  165
                  Group IX (weighted at 100%)                                                                       24,376                1,950
                                                                                         Total credit risk         107,974                8,637
                                                                                    Total operational risk           9,634                  771
                                                                                        Total Risk Assets          136,969               10,956
(*) Preliminary figures pending Banco de Mexico approval.




                                                                                          Grupo Scotiabank – 2009 Third Quarter Report      38
                                                                                                                 ADDITIONAL INFORMATION



 Scotiabank Mexico                                                                       September           June           September
 Capital Ratios                                                                         30, 2009 (*)        30, 2009         30, 2008
 (1) Capital to credit risk:
       Basic capital (tier 1)                                                               20.52%               19.96%        21.39%
       Complementary capital (tier 2)                                                        0.35%                0.35%         0.41%
 Total net capital (tier 1+ 2)                                                              20.87%               20.31%        21.80%

 (2) Capital total risk:
       Basic capital (tier 1)                                                               16.17%               15.62%        16.24%
       Complementary capital (tier 2)                                                        0.28%                0.27%         0.31%
 Total net capital (tier 1+ 2)                                                              16.45%               15.89%        16.55%
 Classification according to the general rules referred to in Article 134 of
                                                                                                                    I             I
 the Credit Institutions Law
(*) Preliminary figures pending Banco de Mexico approval.



 Scotiabank Mexico
 Composition of Securities Portfolio
 (P$ millions as at September 30, 2009)
                                               Government            Debt       Bank
                 Category                                                                     Other      Total
                                                 Paper             Securities   Paper
 Trading                                         7,553              3,823         59            -        11,435
 Without restriction:                               18               3,708        57            -         3,783
 Restricted:
 Repurchase agreement:s                            6,380               115       -              -        6,495
 Others:                                           1,155                -         2             -        1,157
 Available for sale
 Without restriction:                              3,784             1,001      152            672       5,609
 Held to maturity
 Without restriction:                              1,852               -         -              -        1,852
 Total securities                                 13,189             4,824      211            672       18,896

 Scotiabank Mexico
 Investments in non-Government Securities (In excess of 5% of net capital)
 (P$ millions as at September 30, 2009)

        Issuer                Securities        Rate                Term           Value

  INBURSA 9394                   1,004          4.65%                 28              1,004
  BANSAN 9394                    1,004          4.55%                 28              1,004
  BANSAN 9424                    1,405          4.55%                 29              1,401
  BAMMSA 9394                      300          4.65%                  1                300
      Total                      3,713                                                3,709



 Scotiabank Mexico
 Rates paid on core deposits
 (as at September 30, 2009)
                                                            Average rate paid
                                     Pesos                   USD                   UDIs
 Demand and savings                  1.62%                   0.22%                    -
 Term Deposits                       5.30%                   0.51%                 0.32%




                                                                                        Grupo Scotiabank – 2009 Third Quarter Report    39
                                                                                                                  ADDITIONAL INFORMATION


Scotiabank Mexico                                                                     September          June                    September
Financial Information by product and region                                            30, 2009         30, 2009                  30, 2008
Demand deposits                                                                           52.2%                  52.9%               47.2%
 Metro Division                                                                           21.9%                  23.4%               19.6%
   Metro North                                                                             8.2%                   8.9%                7.4%
   Metro South                                                                            13.7%                  14.5%               12.2%
 West Division                                                                            14.7%                  14.4%               12.4%
   Metro East                                                                              7.0%                   7.1%                6.3%
   Mexico Central                                                                          7.7%                   7.3%                6.1%
 East Division                                                                            15.6%                  15.1%               15.2%
   Mexico North                                                                            7.0%                   6.7%                6.6%
   Mexico South                                                                            8.6%                   8.4%                8.6%
Ventanilla Deposits                                                                       47.7%                  47.0%               52.7%
 Metro Division                                                                           17.0%                  16.2%               19.4%
   Metro North                                                                             7.6%                   7.6%                8.0%
   Metro South                                                                             9.4%                   8.6%               11.4%
 West Division                                                                            13.5%                  13.5%               13.4%
   Metro East                                                                              5.9%                   6.1%                6.6%
   Mexico Central                                                                          7.6%                   7.4%                6.8%
 East Division                                                                            17.2%                  17.3%               19.9%
   Mexico North                                                                            5.8%                   5.8%                5.1%
   Mexico South                                                                           11.4%                  11.5%               14.8%
Total funding from customers                                                              99.9%                  99.9%               99.9%
Professional Funding                                                                       0.1%                   0.1%                0.1%



Scotiabank Mexico
Funding from Banks and Other Organisations
(P$ millions, as at September 30, 2009)
                                                Loans                               Other funding
           Term                Commercial               Banco de      Development   Development                          Total
                                                                                                     Other
                                 Banks                   México          Bank          Funds
   Pesos
     Short                           200                      -               -              -               -               200
     Medium                            -                      -           1,304            641               -             1,945
     Long                              -                      -             279          1,695               -             1,974
         Total                       200                      -           1,583          2,336               -             4,119
   Average Rate*                  4.46%                       -          7.79%          4.42%                -

  Other
    Short                                   -                     -           -              -            -                   -
    Medium                                  -                     -           -           115             1                 116
    Long                                    -                     -           -              -            -                   -
         Total                              -                     -           -           115             1                 116
  Average Rate*                             -                     -           -           0.34%         1.20%                 -
Total Interbank and
other funding                         200                         -      1,583           2.451            1                4,235
*Average rate of September 30, 2009


The bank does not have debt from any creditor that is greater than 10% of total liabilities as at September 30,
2009.

Scotiabank Mexico has 4 issuances (which include two tranches of the second issue) of Bank Certificates. The
main features of the issuances are as follow:




                                                                                       Grupo Scotiabank – 2009 Third Quarter Report          40
                                                                                                                                ADDITIONAL INFORMATION


    Issuance                                        Second – 1st            Second – 2nd
                                First                                                                  Third                     Fifth
    number                                           Tranches                Tranches
Trade Code                SCB0001 05                SCOTIAB 05              SCOTIAB 05              SCB0002 05             SCOTIAB 07
Amount issued             $400 millions             $700 millions           $800 millions           $300 millions         $2,000 millions
                          November 10,                                                              December 8,             December 5,
Date                                              November 10, 2005       December 8, 2005
                              2005                                                                      2005                   2007
                                                                                                                           1,820 days 65
                            3,652 days,           1,820 days, aprox.      1,792 days, aprox.         4,750 days,
Term                                                                                                                      periods 28 days,
                          aprox. 10 years              5 years            4 year 11 months         aprox. 13 years
                                                                                                                           aprox. 5 years
Guarantees                “Unsecured”                “Unsecured”            “Unsecured”              “Unsecured”            “Unsecured”
Interest rate             9.89% Fixed              TIIE 28 + 0.11%        TIIE 28 + 0.11%            9.75% Fixed          TIIE 28 - 0.09%
                           May 10 and
                                                                                                   December 8 and
                          November 10
Interest payment                                     Each 28 days           Each 28 days           June 8 each year           Each 28 days
                         each year until
                                                                                                    until maturity
                            maturity
Principal                One payment at            One payment at          One payment at          One payment at         One payment at
payment                  end of the tern           end of the tern         end of the tern         end of the tern        end of the tern



 Scotiabank Mexico
 Derivatives and hedging operations; as at September 30, 2009
 (P$ millions, reasonable value)
                                                                                       Structured
                    Forwards                  Futures               Options                                         Swaps
                                                                                       Operations
                                                                                                                                      Total     Total
                     Position                 Position              Position              Position                 Position
                                                                                                                                      Asset    Liability
                 Asset    Liability      Asset     Liability    Asset    Liability   Asset     Liability     Asset      Liability
 Trading          100           85           -             3        1            -     20            21      1,783         1,939      1,904       2,048

 Hedging             -             -          -            -         -           -        -             -         376         310        376        310



 Scotiabank Mexico
 Notional amounts in derivative operations; as at September 30, 2009
 (P$ millions, nominal values presented in currency origin)
                                                                                                        Structured
                         Forwards                     Futures                   Options                                                  Swaps
                                                                                                        Operations
                        Position                      Position                 Position                   Position                      Position
                    Asset    Liability            Asset     Liability      Asset     Liability        Asset     Liability           Asset     Liability
 Trading
 USD
                         314            343                                                    4
 positions
 EUR
 positions
 Currency
 Stocks                                                                                                     603         603
 Interest rate
 Mx Pesos                                         15,692        2,669                                                               52,640       51,296
 USD                                                                                                                                   320          321

 Hedging
 Interest rate
 Mx Pesos                                                                                                                            5,020        9,957
 USD                                                                                                                                                206




                                                                                               Grupo Scotiabank – 2009 Third Quarter Report                41
                                                                                          ADDITIONAL INFORMATION

Scotiabank Mexico
Market Results for the nine months ended September 30, 2009
(P$ millions)
                                                Mark to Market          Trading Results
Investment in securities (include Repo)                (58)                      72
Derivative operations & Trading                      (120)                      109
Foreign exchange                                       (10)                     627
Others                                                    -                       6
Total                                                (188)                      814




Scotiabank Mexico
Deferred Taxes
(P$ millions; as at September 30, 2009)
Assets
Provisions for sundry obligations                                                342
Other timing difference                                                          975
Subtotal                                                                       1,317
Liabilities
Revaluation of real estate                                                      251
Mark to market gain                                                             254
Other timing differences                                                        125
Subtotal                                                                        630
Net deferred taxes                                                              687




                                                                 Grupo Scotiabank – 2009 Third Quarter Report   42
                                                                                                              ADDITIONAL INFORMATION


                                                        Scotiabank Inverlat, S.A.
                                                    Clasification of the Loan Portfolio
                                                        As at September 30, 2009
                                                                 (P$ millions)
                                                                             Allowance for Credit Losses Required
                             Loan Portfolio                                                                           Total Allowance for
                                                   Commercial Loans        Consumer Loans         Mortgages Loans
                                                                                                                         Credit Losses
 Excepted portfolio                  195                   -                       -                      -                     -
Classified:
      A1 / A                       66,023                 110                       50                   117                  286
      A2                            9,712                   95                      -                      -                   95
      B1 / B                       18,483                 408                     430                    142                  980
      B2                            1,203                   81                      -                      -                   81
      B3                              884                 105                       -                      -                  105
      C1 / C                        1,226                   75                    303                      87                 465
      C2                               24                  10                       -                      -                   10
      D                             1,715                   -                     527                    673                1,220
      E                               739                 367                     259                      69                 695
Total                             100,204                1,251                   1,578                  1,088               3,917


Provisions Created                                                                                                          4,084

Deficit (other credit reserves)                                                                                              (167)




NOTES:

 1. The figures for the classification of the portfolio and the creation of allowance for credit losses correspond to
    the balance on last day of the month and are reflected in the balance sheet of September 30, 2009.

 2. The Commercial credit portfolio is classified using an international borrower classification model that has
    been authorised by the National Banking and Securities Commissions (CNBV), and which conforms with the
    applicable general character provisions of the financial credit institutions credit portfolio methodology
    published in the Federation’s Official Diary dated August 22, 2008 and for all the retail credit portfolio
    products in agreement to the published in the Federation’s Official Diary dated August 12, 2009.

 3. Other credit reserves are comprised of:

       - Reverses against past due interest   $    100
        - Reverses – Credit Bureau             $    60
        - Excess of reserves                  $      7
        Total                                 $    167

 4. The classifications A1, B1, and C2, correspond to the Commercial portfolio and the classifications A, B and
    C, correspond to the Personal and Mortgages portfolio.




                                                                                   Grupo Scotiabank – 2009 Third Quarter Report      43
                                                                                                                                          ADDITIONAL INFORMATION


Credit Risk
At the close of September 30th, 2009, the expected loss on the portfolio of the Bank was P$2,720 million and the
unexpected loss was P$7,980 million. The total exposure of the credit portfolio was P$252,619 million as at
September 30, 2009 and the average during the period form July to September was P$269,666 million.

Market Risk
Average daily VaR observed during the quarter ended September 30th, 2009; was as follows:

 Scotiabank Mexico – Average Daily VaR                                   Q3 09
 (P$ millions)
 1 day VaR ; 99%                                                           6.44

The average VaR to September 30th, 2009 broken down by risk factor was as follows:
 Scotiabank Mexico – Average VaR by Risk Factor                                    1 day
 (P$ millions)                                                                     VaR
 Risk Factor:
 Interest rates                                                                      5.49
 Exchanges rates                                                                     2.57
 Equities                                                                            1.00
 Total no diversification                                                            9.07
 Diversification factor                                                             (2.63)
 Total                                                                               6.44

The global average VaR of 1 day in the Bank during the third quarter of 2009 was of P$6.44 million and the global
value to the closing of September 30, 2009 was P$7.42 million.
The average values of the market risk exposure in the business portfolio for the period July to September 2009 were
the following:
 Scotiabank Mexico – Average Position                             Average             High               Limit             Average
 (P$ millions)                                                                                                                                Limit VaR
                                                                  Position           Position           Position            VaR
 Bank                                                              171,059.5          180,910.3               -                 6.4              52.5

 Money market                                                       14,174.4          19,651.8           105,000.0              4.6                 -
 Interest rate swaps                                               123,910.0          125,371.4         157,000.0               4.0                 -
 Rate futures / 3                                                      -                  -                  -                  6.6                 -
 Interest rate market and rate derivatives                        138,084.41         145,023.18         262,000.00              5.5              50.00

 Equity investment portfolio / 4                                         58.3                99.2             300.0                 4.3           10.0

 FX Forwards / 1, 2                                                    497.3              691.6            4,000.0                  3.8            -
 FX Desk / 1, 2                                                           1.0                 4.6             55.0                  0.5            -
 FX Options / 2                                                          5.57                6.99            800.0                  0.5            -
 FX Futures / 3                                                          -                 -                 -                      2.6            -
 FX Swaps / 2                                                          283.8              290.3            1,500.0                  0.1            -
 FX and derivatives / 4                                                787.7              993.5            6,355.0                  2.6          10.0
1/ The position in forwards is a gross position (i.e. longs + shorts) and that of FX Desk are a net figures (i.e. longs – shorts)
2/ Figures in USD millions
3/ The position and limit are based on the contracts number provided by Mexder.
4/The observed period (holding period) of the VaR of currencies, capitals, Interest rates and their limits are 1 day.




                                                                                                      Grupo Scotiabank – 2009 Third Quarter Report            44
                                                                                                                   ADDITIONAL INFORMATION


To interpret the VaR with an example, the average 1-day value at risk of the Bank in the money market is P$ 5.5
million. This means that under normal conditions, in 99 out of 100 days, the maximum potential loss is up to P$5.5
million.
During the third quarter of 2009, the Bank participated in the Mexican Derivatives market, through the Mexder
exchange, by trading in future interest rate contracts, future currency contracts. By the end of quarter, the Bank does
not have positions on the IPC Future contacts. Below, the positions show the number of contracts traded.
 Scotiabank Mexico – Average Position                     Average              High            Limit
 (figures in number of open interest contracts)           Position            Position        Position
 Futures
 TIIE28                                                   188,083.2              273,930.0    975,000.0
 CE91                                                      25,076.9               40,000.0      45,000.0
 Bono M                                                     1,333.2                2,689.0      20,000.0
 Rate futures/ 1                                          214,493.3              316,619.0   1,040,000.0

 USD / MXN/ 1                                                  426.3               2,661.0     10,000.0
1/ The position and limit are based on the contracts number provided by Mexder.

Due to the fact that the VaR measure serves to estimate potential losses in normal conditions of market, monthly tests
are made under extreme conditions "stress testing" with the purpose to determine the risk exhibition considering big
fluctuations in the market prices. The risk committee has approved limit stress.
The result of the “stress testing” at September 30, 2009, was P$267 million, which compares with a limit of P$ 1,500
million, and thus lying within the tolerable limits. The hypothetical scenarios that are used for this test are the crisis
of 1994 and 1998.
Regarding Back-Testing's tests, the new scenarios of high volatility recorded during Octubre/08 caused the exceptions
to the proof, however after October it was corrected in a general way. This period was temporary, wich mean it is not
necessary to adjust the model and since all excesses has explanation of high volatility.
This specific period of unusual volatility put in yellow preventive the global VaR of the Group. The Basilea rules
explain that it is necessary to looking for an explanation and this is the global crisis of credit that was sharpened in
October, 2008.

The change in the estimated economic value is P$ 657 million (impact over the parallel change in economic value of
100 basis points in rates) versus P$ 241 million (impact over the margin to parallel changes in 100 basis points in
rates).

Market risk treatment for available for sale securities
At the end of September 30, 2009 the Bank’s total amount of available for sale securities was P$5,609 million.
Available for sale securities are part of the Bank’s structural position and their risk is measured considering gaps due
to rates resets, economic value sensitivity and margin sensitivity to interest rates changes. Only a partial of
government securities, P$508.1 million are taken to calculate VaR.

Liquidity Risk
The principle of liquidity gap is to determine amount in assets and liabilities that will be paid back at a given horizon
and is the difference in cash flows of assets, upon maturity, less the cash flows of liabilities upon maturity.
                                                                       Use
                          Limit                                 (millions of pesos)
                                                              September 2009
 Two-week accumulates Gap (MXP + UDIs)                                 (9,083)
 Liquid Assets                                                          5,793

The two-week accumulated gap indicates the cash commitments that the Bank has during this period and the liquid
assets available to meet these commitments should it not have access to other funding sources.

                                                                                             Grupo Scotiabank – 2009 Third Quarter Report   45
                                                                                              ADDITIONAL INFORMATION


Operational and Legal Risk
From July to September 2009 the Bank registered loss related for operative risk of P$30 millions, also in case of
materialize operational risk this might be caused a negative impact on the Bank’s result, in case of legal risk by $288
millions, that are reserved at 100% and represent the 1% of the Institution’s Equity of Stockholders.

Debt Rating Agencies
  Scotiabank Domestic
                                   Long Term              Short Term              Perspective
      Debt Rating
Fitch Rating                        AAA(mex)                F1+(mex)                 Stable
Moody’s                              Aaa.mx                  MX-1                    Stable
Standard & Poor´s                    mxAAA                   mxA-1+                  Stable

The information above is presented by Scotiabank Mexico with the sole purpose of informing its customers of the
Bank’s domestic credit ratings as defined by Debt Rating Agencies (Fitch Ratings, Moody’s and Standard & Poor´s).
These ratings could be modified without prior advice.

Dividend
A dividend payment was presented and approved at the Annual General Shareholder’s meeting held on April 27,
2007. It was agreed that a dividend, up to the amount of P$1,700’000,000.00, would be charged to the Group’s
retained earnings and the Assembly authorized the Board of Directors to approve the payment program.
The Board of Directors, in accordance with this Program, approved that the dividend would be paid quarterly, within
a range of between 20 % and 45 % of the quarterly net income.
The Board approved, in its meetings held on April 24, May 29, July 23, October 23, 2007, February 26, April 29 and
July 29, 2008, as well as February 24, 2009, the first, second, third, fourth, fifth, sixth, seventh and eight partial
payment to be paid on May 9, June 11, August 31, November 30, 2007, March 28, May 30, August 29, 2008, and
March 31, 2009 respectively through the “S.D. Indeval, Institución para el Depósito de Valores, S.A. de C.V.”, (the
institution responsible for securities clearing and depository services).
The Board of Directors, on October 30, 2008, approved to modify the dividend payment program, prior to the
November, 2008 dividend, in order to postpone the payment that was scheduled for that quarter, until the year 2009.
The Board, in their meetings of February 24, 2009 and April 28, 2009, approved the eighth, as well as the ninth and
final partial dividend, respectively, which were paid on March 31 and May 29, 2009, through the “S.D. Indeval,
Institución para el Depósito de Valores, S.A. de C.V.”, having covered the total amount of the P$1,700,000,000.00
declared in the aforesaid Annual General Shareholders' meeting.
At the Annual General Shareholder's meeting held on March 27, 2009 it was agreed to declare a new dividend up to
an amount of P$2,000,000,000.00 to be charged to retained earnings and the Assembly authorized the Board to
approve the payment program.
The Shareholder’s meeting approved that the aforementioned dividend would be paid quarterly, within a range of
between 0% and 45% of the quarterly net income, which is also approved by the Board.
Finally, it was approved that the dividend payments would be made through “S.D. Indeval, Institución para el
Depósito de Valores, S.A. de C.V.”.
The Board, in their meeting of July 28, 2009, approved the payment of the first partial dividend related to the Annual
General Shareholder's meeting held on March 27, 2009, which was paid on August 28, 2009 through the “S.D.
Indeval, Institución para el Depósito de Valores, S.A. de C.V.”.




                                                                       Grupo Scotiabank – 2009 Third Quarter Report   46
                                                                                                                ADDITIONAL INFORMATION


Attachment 9 Scotia Casa de Bolsa


As at the close of September 2009, Total Assets were P$ 16,990 million, an increase of P$ 11,330 million from the
previous year. This increase was due primarily to an increase of P$ 9,517 million in investments due to the
aforementioned new accounting criteria, corresponding to Securities and Repo transactions, as well as an increase of
P$ 226 million in Funds Available due to the release of funds from hedging warrants, partially offset by a decrease of
P$ 1,380 million in Accounts Receivable as a result of transaction settlements.

On the other hand, the Total Liabilities were P$ 15,517 million, an increase of P$ 11,274 million from the previous
year. This increase was due primarily to the increase in Repurchase Agreements of P$ 10,415 million, as a result of the
previously mentioned new changes in accounting criteria and the increase of P$ 3,037 million for liquidity operations,
partially offset by a decrease in the derivative trading position due to warrant maturities.

The client investments in custody were P$ 157,926 million, a year-over-year increase of 6% due primarily to the
behavior of the financial markets.

For the nine months ended September 30, 2009, the net income was P$115 million. Compared with the same period
last year, net income was relatively unchanged; lower taxes and a decrease in expenses were partially offset by an
income decrease from Commercial paper origination.

 Scotia Casa de Bolsa
 Financial Indicators
                                                                                                 2009                              2008
                                                                                         Q3         Q2          Q1           Q4             Q3
 Solvency
 (Total assets / Total liabilities)                                                       1.3       1.4         1.4          1.6            1.3
 Liquidity
 (Liquid assets / liquid liabilities)                                                     1.6       1.6         1.7          1.5            1.7
 Financial leverage
 (Total liabilities less trading settlement accounts / Capital )                        135.6     101.3       158.5        171.8          150.8
 ROE
 (Net income / Capital)                                                                  11.0       4.9        16.7        -23.0           -0.3
 ROA
 (Net income / earning assets)                                                            4.1       1.9         6.7         -8.1           -0.1
 Capital requirements / Total Capital                                                    21.1      21.8       21.88         20.5           25.9
 Financing margin / Total operating income                                               -0.6      37.7        43.1         31.6           26.6
 Operating income / Total operating income                                              -14.4      16.6        34.1        -17.8           15.0
 Total operating income / Administration expenses                                        87.4     119.9       151.8         84.9          117.7
 Administration expenses / Total operating income                                       114.4      83.4        65.9        117.8           84.9
 Net income / Administrative expenses                                                    26.5      10.4        41.0        -44.2           -0.6
 Personnel expenses / Operating income                                                   71.3      55.7        44.1         79.8           60.4
Note: The 2009 figures incluye the netting of Restricted Investment related to Repos.




                                                                                          Grupo Scotiabank – 2009 Third Quarter Report     47
                                                                                                               ADDITIONAL INFORMATION


 Scotia Casa de Bolsa                                                         September 30,
 Other revenues and expenses (net)                                                2009
 (P$ millions)
 Reserve Fund interest                                                                 2
 Taxes                                                                                48
 Leasing revenues                                                                      6
 Other                                                                                25
 Other revenues and expenses (net)                                                    81

Capitalisation

At September 30, 2009 Brokerage Firm’s common shareholders equity was strong, at P$1,473 million. The total
capital ratio for credit, market and operational risk was 37.99%.

The global capital needed by risk of credit, market and operational was of P$285 million that represent a
consumption of the capital of 21.06 %.

 Scotia Casa de Bolsa                                                       September 30,
 Capitalisation                                                                 2009
 (P$ millions)
 Share capital and reserves                                                        1,473
 Less: Investments in financial                                                        -
        Other assets                                                                   -
 Basic capital                                                                     1,473
 Complementary capital                                                                 -
 Total capital                                                                     1,473



 Scotia Casa de Bolsa – Risk Assets                                                           Assets         Capital
 (P$ millions as at September 30, 2009)                                                                                   Risk assets
                                                                                                           requirement
                   Operations in MXN at nominal rates                                             79,641          51            629
                   Operations in MXN with floating rate premium or yield referred to
                                                                                                  26,530          33            412
                   this
                   Operations in MXN at real rates or rates denominated in UDIs                      350           -               -
    Market         Operations in foreign currencies at nominal rate                                  169           -               -
     Risk          Positions in UDIs or with yields related to inflation accounting                  349           -               -
                   Foreign exchange positions                                                          4           -               6
                   Securities positions or with yields related to a group of securities              335          70             875
                                                                       Total market risk         107,378         154           1,922
                   Counter –party in repurchase agreements and derivatives                            30           1              15
    Credit         Issuer of debt instruments related to repurchase agreements                    12,265          92           1,155
     Risk          Due to deposits, loans, other assets and contingencies                            626          23             282
                                                                        Total credit risk         12,921         116           1,452
                                                            Total market and credit risk         120,299         270           3,374
 Operational
                                                                  Total operational risk               -          15            188
    Risk
                                              Total market, credit and operational risk          120,299         285           3,562

 Scotia Casa de Bolsa                                                     September 30,
 Capital Ratios                                                                2009
 Global Equity / Assets under credit, market and operational risk             37.99%
 Global Equity                                                                1,353.45
(*) Preliminary figures pending Banco de Mexico approval.




                                                                                         Grupo Scotiabank – 2009 Third Quarter Report   48
                                                                                                                                   ADDITIONAL INFORMATION



Scotiabank Casa de Bolsa
Composition of Securities Portfolio
(P$ millions as at September 30, 2009)
                                             Government           Debt                                Bank
                Category                                                              Others                               Total
                                               Paper            Securities                            Paper
Trading                                           7,755            4,539                  380          1,010               13,684
Without restriction:
Restricted:
Repurchase agreements:                           7,166               2,917                380                              10,463
Securities Receivable:                                                                                      530               530
Others:                                            589               1,622                                  480             2,691
Available for sale                                                                        17                237               254
Without restriction:                                                                      17                                   17
Restricted:                                                                                                 237               237
Others:                                                                                                                         -
Total securities                                 7,755               4,539                397          1,247               13,938

Scotiabank Casa de Bolsa
Derivatives and hedging operations; as at September 30, 2009
(P$ millions, reasonable value)
                           Forwards                      Futures                       Options                      Options (others)
                                                                                                                                               Total    Total
                           Position                      Position                      Position                         Position
                                                                                                                                               Asset   Liability
                     Asset        Liability       Asset         Liability         Asset         Liability          Asset           Liability
Trading                -             -             1               -                -             118               5                142        6        260

Scotiabank Casa de Bolsa
Notional amounts in derivative operations; as at September 30, 2009
(P$ millions, nominal values presented in currency origin)
                                          Forwards                             Options                               Forwards
                                            Position                           Position                               Position
                                      Asset          Liability           Asset         Liability                  Asset      Liability
Trading:
   Foreign exchange                                                                                                 7                4
   Index                                 9                 59
   Others                                                                    46                 46

Scotia Casa de Bolsa
Market Results for the nine month ended September 30, 2009
(P$ millions)
                                                 Mark to
                                                                    Trading results
                                                 Market
Investment in securities                          17                      104
Derivative operations & Trading                 (36)                     (98)
Other                                              -                        6
Total                                           (19)                       12

Scotia Casa de Bolsa
Deferred taxes
(P$ millions as at September 30, 2009)
Mark-to-market of investment                                                  (8)
Prepayment                                                                   (17)
Fixed assets                                                                 (50)
Expense provisions                                                             64
Imputed Interest                                                                4
Warrants                                                                       51
Employee Profit Sharing Expenses (PTU)                                         10
Shares appraisal                                                             (24)
Net deferred taxes                                                             30


                                                                                                Grupo Scotiabank – 2009 Third Quarter Report              49
                                                                                                                                                ADDITIONAL INFORMATION

Credit risk

At the close of September 30, 2009, the expected loss on total credit portfolio of Brokerage Firm’s was P$0 million
and the unexpected loss was P$64 million. The total exposure of the credit portfolio was P$74,404 millions as at
September 30, 2009 and the average during the period from July to September was P$78,067 million.

Market Risk

Average daily VaR observed during the quarter ended September 30, 2009 was as follows:

Scotia Casa de Bolsa – Average Daily VaR
(P$ millions)                                                                       Q3 09
1 day VaR, 99%                                                                        5.18

The global daily average VaR for Casa de Bolsa during the third quarter of 2009 was P$ 5.18 million and the global
value at September 30, 2009 was P$ 4.8 million.

The risk value removed by risk factor of Scotia Casa de Bolsa to September 30, 2009 was the following:

Scotia Casa de Bolsa – Average VaR by Risk Factor                                     1 day
(P$ millions as at September 30, 2009)                                                VaR
Risk Factor
Interest rates                                                                           3.65
Equities                                                                                 3.05
Total no diversification                                                                 6.70
Diversification effect                                                                  (1.52)
Total                                                                                    5.18

The average values of the market risk exposure in the business portfolio for the period from July to September 2009
were the following:

Scotia Casa de Bolsa                                     Average             High               Limit             Average              Limit
Average Position                                         Position           Position           Position            VaR                 VaR
(P$ millions as at September 30, 2009)

Brokerage House                                           15,449.1            19,161.4                                     5.2               25.0
Money market                                              15,393.8            19,131.4                                     3.7               25.0
Equity position                                               54.7               127.0                200                  1.1               10.0
IPC Derivatives / 1                                          336.7               449.6            2,880.0
Equities /1                                                  391.4               519.2                                     3.1                 10
1/ includes IPC futures and options of the equity derivatives desk, the VaR includes the warrants portfolio. The average 1 day VaR of warrants is
P$ 2.63 millions.


To interpret the VaR with an example, the average 1-day value at risk of the Casa de Bolsa in the money market is P$
3.7 million. This means that under normal conditions, in 99 out of 100 days, the maximum potential loss is up to
P$3.7 million.
During the third quarter of 2009, the Broker House took part on the Mexican Market of Derivatives named as Mexder,
celebrating operations of contracts on Future and IPC options futures. During this period the broker house does not
have operations of future of interest rate. Later the positions appear in numbers of negotiated contracts.




                                                                                                             Grupo Scotiabank – 2009 Third Quarter Report           50
                                                                                                                                 ADDITIONAL INFORMATION


Scotia Casa de Bolsa– Average Position                            Average                 High               Limit
(figures in number of open interest contracts)                    Position               Position           Position
Futures
TIIE28                                                                                                        775,000
CE91                                                                                                           45,000
Bono M                                                                                                         20,000
IPC Futures                                                             65                   277                  750
  2/ Includes contracts of trading capital desk. The 1 day average VaR for IPC Futures are $0.34 million
  and it is included in the Equity Global VaR.


The total average position for the quarter for IPC futures of Mexder for Equities and Equity derivatives was P$ 217
million. Only the Equity derivatives area can enter into options on IPC futures transactions of Mexder in which their
quarterly average position was P$ 138 million.

Is important to emphasize that the futures and options from IPC futures basically are in use for covering the risk of
market of the positions of optional titles or warrants that issue for the clients. Warrants were indexed to the equities
and IPC issued by the Broker House, from P$1,277 million to the top of P$1,304 million.

Due to the fact that the VaR measure serves to estimate potential losses in normal conditions of market, monthly tests
are made under extreme conditions "stress testing" with the puropse to determine the risk exhibition considering big
fluctuations in the market prices. The risk committee has approved limit stress.

At the end of September 30, 2009 the test of extreme conditions "stress testing" was $122.4 million compared to $800
million are consider favourable. The scenes that are in use for this test are the crisis of 94 and 98 as hypothetical.

Regarding Back-Testing's tests, the new scenarios of high volatility recorded during Octubre/08 caused the exceptions
to the proof, however after October it was corrected in a general way. This period was temporary, wich mean it is not
necessary to adjust the model since all excesses has explanation of high volatility.

This specific period of unusual volatility put in yellow preventive the global VaR of the Group. The Basilea rules
explain that it is necessary to looking for an explanation and this is the global crisis of credit that was sharpened in
October, 2008.

Liquidity Risk


The principle of liquidity gap is to determine amount in assets and liabilities that will be paid back at a given horizon
and is the difference in cash flows of assets, upon maturity, less the cash flows of liabilities, upon maturity.

                                                                                      Use
                              Limit                                           (millions of pesos)
                                                                          September 30, 2009
Two-week accumulated Gap (MXP + UDIs)                                                      -
Liquid Assets                                                                          3,120

The two-week accumulated gap indicates the cash commitments that Scotia Casa de Bolsa has during this period and
the liquid assets available to meet these commitments should it not have access to other funding sources.

Operational Risk

During the July-September 2009 period, the Casa de Bolsa recognized operational risk losses totaling P$402 thousend
pesos comprised of 123 different events. In addition, other operational risks corresponding to legal risks, could impact
P$50 million, in case they should materialize.


                                                                                                           Grupo Scotiabank – 2009 Third Quarter Report   51
                                                                                            ADDITIONAL INFORMATION


Rating Agencies

Scotia Casa de Bolsa
                                  Long Term             Short Term              Perspective
Domestic Debt Ratings
Moody’s                             Aaa.mx                 MX-1                    Stable
Standard & Poor´s                   mxAAA                  mxA-1+                  Stable



The information above is presented by Scotia Casa de Bolsa with the sole purpose of informing its customers of the
Brokerage house’s domestic credit ratings as defined by Rating Agencies (Moody´s and Standard & Poor´s). These
ratings could be modified without prior advice.




                                                                     Grupo Scotiabank – 2009 Third Quarter Report   52
                                                                                                               ADDITIONAL INFORMATION


Attachment 10                                                            needed, the approved rating. There is an additional quarterly
                                                                         review on borrower’s risk and covenant compliance. With these
Risk Management                                                          activities, the Group identifies any change in the risk profile of
                                                                         every borrower. During these revisions, the global credit risk,
The Board of Directors is responsible for establishing standards         including derivative related transactions and industry risk is
and global risk limits within the Institution. It delegates the          considered. In case of risks that may be above the acceptable
authorization, administration and monitoring of compliance for           levels, more frequent reviews are performed.
these limits to a Risk Committee.
                                                                         The Group has established a risk rating system which is used to
In compliance with the risk management regulations issued by             identify the risk level of proposed and existing loans and insures
the banking authorities (CNBV), the Bank and Brokerage House             that the loan spreads are proportionate to the assumed risk. For
rely on a specialized risk administration area, which has                this purpose the Group has, for the corporate and commercial
responsibility over the Group, and which has adopted similar             segments, a profitability model that explicitly takes into account
policies in risk management and control as those adopted by The          the expected and unexpected loss by type of transaction, as well
Bank of Nova Scotia.                                                     as any other revenues or expenses associated with the customer.
The Board of Directors has to approve policies and procedures at         In the commercial portfolio, the loan quality is rated in
least once a year, as well as the limits for different types of risks.   accordance with the risk levels established in the rules set out by
Further, the Board of Directors delegates to the Risks Committee         the regulating bodies which include assumptions on the possible
and the Integral Management Risks Unit (UAIR), the                       risks of recovery based on both, the borrower’s characteristics,
responsibility to implement procedures for measuring, controlling        and by the quality and characteristics of the guarantee. On a
and managing risks according with the rules established. The             monthly basis, the Risk Committee closely follows the main risk
Assets-Liabilities’ Risks Committee (CAPA) is responsible for            migrations.
supervising the compliance to policies and procedures governing
market and liquidity risks.                                              Consumer loans and mortgage portfolios are also reviewed on a
                                                                         monthly basis with the objective of determining the possible trend
The UAIR has policies to inform and correct any deviations from          in their credit quality. The potential losses are measured,
the established limits and if this is the case, inform the Risk          considering past due payments and their age.
Committee and Management Board.
                                                                         Concentration of credit risk:
Credit Risk:
                                                                         The Group has implemented policies and procedures to maintain
The management of credit risk in the Group is based on the               a sound, diversified and controlled credit portfolio with prudent
application of well-defined strategies for controlling credit risk,      risk. These policies and procedures emphasize the establishment
including centralisation of credit processes, portfolio                  of credit risk limits considering business units, currency, term,
diversification, enhanced credit analysis, close surveillance, and a     sector, etc. These limits are submitted annually to the Board of
loan risk rating model.                                                  Directors for their approval and compliance with these limits and
                                                                         which are in turn monitored and reported monthly to the Risk
Credit processes:                                                        Committee.
There are three separate credit approval levels: The Board of
Directors, The Board’s Credit Committee and combined                     Methodology to determine credit risk:
authorization powers of the Credit Policy Committee. The                 In order to identify the amount of risk inherent in credits and, on
distinction between these levels is in accordance with the               the other hand, to ensure that the yield from each credit is
transaction size, type of borrower, use of the resources and             proportional to its risk, the Group uses a system for the
credit rating.                                                           classification of credit risk which is based on the methodology
                                                                         used by BNS, which also includes systems and strategies for the
The business line areas design and structure the various                 granting and monitoring of the credit portfolio. As such, the
proposals which are then analized and authorized by the Credit           Group has taken advantage of BNS’ extensive experience in the
Department including its recommendations which are sent to the           areas of loan classification and estimation of reserves and losses
appropriate approval level. This process ensures the proper              and has adapted this experience to conform with the laws and
segregation of duties between the area which originates the              requirements of the Mexican market.
proposals and the area that authorizes them.
                                                                         This model considers the following risk factors: country risk,
In addition, the different business lines perform, on a regular          financial performance, debt coverage, management strength,
basis, a financial review for each borrower, performing, at least        overall strength (the relation among the economic environment,
annually, an in-depth risk analysis for each loan, modifying, if         the competition, strengths and weaknesses of the borrower), and



                                                                                       Grupo Scotiabank – 2009 Third Quarter Report       53
                                                                                                             ADDITIONAL INFORMATION


administration of the account, state of the industry and payment               Sub-standard                                 40
history.                                                                       Deteriorated (high)                          22
                                                                               Recovery in doubt                            21
Such factors give an appraisal of the risk profile of the borrower             Problem loan                                 20
and the results are entered into an algorithm which weighs the
various elements. This algorithm is based on the experience and       Description of each risk level:
statistical analysis of BNS, adapted to the requirements of the
Mexican market.                                                       Excellent risk: Borrowers that represent minimal credit risk for
                                                                      the bank. Possess an excellent financial structure along with
The system of internal classification (classified by “IG Codes”),     consistent earnings; debt service capacity is extremely strong, as
has 8 classifications that are considered acceptable (IG 98 to IG     evidenced by solid access to money and capital markets and to
77), 5 classifications to reflect an above average (IG 75 to IG       alternate sources of funding. The management team has broad
60) and 4 considered unacceptable (IG 40 to IG 20). In                experience with track record of producing optimum results. They
accordance with applicable official regulations, a correlation has    are not vulnerable to the economy of the country or to the
been established between the internal risk classification and the     economic sector in which they operate.
risk ranking.
                                                                      Very good risk: Borrowers with a solid financial structure that
By way of the official document no. 141-4/31395/2008 dated            generate sufficient funds and liquidity to cover short and long
November 11, 2008, the CNBV authorized Scotiabank to                  term debt. However, they depend on the Bank to a greater extent
classify the Commercial Credit Portfolio using its internal           than excellent risk borrowers. The management team is
methodology, according to the “Probability of Default”                competent, with the capacity to easily overcome moderate
applicable to the total commercial portfolio, except for the          setbacks. They operate in a stable or growing economic sector.
following segments: the special program “Scotia Empresarial”
which is classified by the application of its own internal model      Good risk: Borrowers with a good financial structure, with
based on the methodology to determine credit risk; as well as         consistent income and reliable cash flow. Their capacity to cover
the credits granted to Federal Entities and Municipalities,           and service the debt is good. The management team has shown
Investment projects with their own payment sources, Trustees          itself to be good, with adequate capabilities in critical areas. The
that act upon the protection of Trusts and re-structured credits      characteristics of the economic sector and the country’s economy
that rely on capital appropriation that permits the individual        are good, without indications that may adversely affect them
evaluation of the associated risk, as those granted to financial      negatively.
institutions; those that are classified individually and conform to
the appointed methodologies in these articles 112, 114 and 115        Satisfactory risk: Borrowers whose financial structure is solid and
of the General Character Dispositions applicable to the Credit        have the capacity to effectively cover payment obligations, whose
Institutions. The credit classification and their provisioning are    profits are in-line with industry average; however, they are a little
carried out respectively in compliance with articles 126,127,130      more susceptible to adverse economic conditions than borrowers
and 131 of the referenced dispositions.                               with a superior classification.

The following table presents a schematic of the risk levels for       Adequate risk (high): Borrowers still have a high ability to cover
the internal rating model for the loan portfolio applicable to the    their payment obligations, have an adequate financial structure
commercial portfolio.                                                 and have consistent earnings which, however, are slightly less
                                                                      than the industry average. These borrowers have an
               Classification                 IG Code                 administrative team which has the ability to obtain very
         Excellent risk                             98                satisfactory, efficient and profitable results. The industry in which
         Very good risk                             95                they operate can have cyclical trends.
         Good risk                                  90
                                                                      Adequate risk (medium): Borrowers who have the ability to meet
         Satisfactory risk                          87
                                                                      principal and interest payments; however, their current profits are
         Adequate risk (high)                       85
                                                                      below the industry average, suggesting that the borrower may
         Adequate risk (med)                        83                have difficulty sustaining its financial strength. Management may
         Adequate risk (low)                        80                be family-owned or professional and its results are relatively
         Medium risk                                77                satisfactory. The industry in which they operate may have
         Moderate risk (high)                       75                cyclical tendencies.
         Moderate risk (med.)                       73
         Moderate risk (low)                        70                 Adequate risk (low): Borrowers whose financial structure,
         Watch list                                 65                profitability and financing stream are generally adequate, its
         Special supervision                        60                operating cash-flow is at the breakeven point but is adequate to



                                                                                    Grupo Scotiabank – 2009 Third Quarter Report         54
                                                                                                           ADDITIONAL INFORMATION


cover their debt requirements. However, its profits are below        Sub-standard: Borrowers whose future viability is in doubt
the industry average. Management may have certain weaknesses         without changes to business activities, market conditions, and/or
which are offset by other strengths. The industry in which they      the management team and where a general reorganisation is
operate may have cyclical tendencies or be affected somewhat         required. The repayment history is unsatisfactory and at the
by changes in the regulations to which it is subject.                moment payments are past due. The industry in which the
                                                                     company operates is experiencing a temporary deterioration.
Medium risk: Borrowers who have the capacity to cover shot-
term obligations but for which there is potential uncertainty in     Deteriorated (high): Borrowers with clearly identified financial
the long term, the leverage levels are growing and its               deterioration and who are at risk of not complying with debt
indebtedness capacity is modest. Management meets only the           obligations. Currently they have payments in arrears and have a
minimum criteria for negotiated risk. The industry in which they     high dependence on secondary sources of funding to meet their
operate may have cyclical tendencies or be susceptible to            obligations. The management problems put at risk the viability of
macroeconomic changes.                                               the company as a going concern, because the deterioration is
                                                                     considered permanent. The viability of the industrial sector
Moderate risk (high): Borrowers that face a slight reduction in      depends on structural changes.
profits; however with good potential to successfully overcome
these problems. Operating cash flow is at break-even and is          Recovery in doubt: Borrowers with permanent financial
sufficient to cover debt service requirements in a timely manner,    deterioration. It is probable that the business has ceased to
but with a certain downward trend. Management presents mixed         function and, as a result, the payment performance is nil.
operating results and outlook for the longer term. The industry      Payments are up to one year past due, which in general implies
environment reflects growth weakness.                                difficulty in recovery. Management is weak or unreliable and the
                                                                     industry in which the company operates is facing a permanent
Moderate risk (medium): Borrowers that face growth problems          decline.
or weak capitalisation but regularly demonstrate the ability to
overcome their financial weaknesses and at this moment are           Problem loan: Borrowers who have ceased paying and whose
punctually paying their obligations. However, these funds come       situation does not appear to have any possibility of restructuring.
from secondary sources and therefore their ability to sustain        Management is unsuitable or has demonstrated a lack of honesty.
payments is dubious. Management demonstrates certain                 The industry in which the company operates is facing a
weaknesses and shareholders exhibit some scepticism of               permanent decline, for which reason keeping the loan as an asset
management’s ability.                                                of the bank is unjustifiable.

Moderate risk (low): Borrowers whose financial structure             There exist loans that are exempt from classification because they
exhibits a clear weakening trend which could damage its              represent sovereign debt of the Federal Government, and highway
capacity or ability to cover its long-term obligations. This trend   loans with the guarantee of the Federal Government that did not
of going to secondary funding sources is recurrent and its           arise from the sale of loans. These credits do not require reserves.
repayment is consistently overdue. The management team
shows notable weaknesses and there may be a concentration of         The Bank has implemented and adapted to the conditions of
shareholder reliance on one single person. The economic sector       Mexico the Credit Metrics® methodology for the measurement
in which the company operates is very vulnerable to                  and control of the different segments of its portfolio. This
macroeconomic conditions.                                            methodology makes it possible to estimate expected and
                                                                     unexpected losses using measurements of the probability of
Watch list: Borrowers with a weak financial structure and            occurrence of credit events (transition matrices). A level of
whose debt position is unbalanced and over-extended, and             confidence of 99.75% over a one year period is used to determine
require the constant help of non-routine funding sources whose       unexpected losses (Credit VaR). To measure the effect of
repayment is weak, covering the minimum acceptable bank              commercial portfolio concentration, the correlation of distinct
payment. The management team is performing poorly. They are          economic sectors is used. For retail portfolio (credit card,
vulnerable to any setbacks in their specific business and in their   personal loans and mortgages) agreed assumptions of constant
business.                                                            correlation to international practices are used.
                                                                     Additionally, in regular way tests of impact under extreme
Special supervision: Borrowers who exhibit cash flow and             conditions for expected loss are carried out as much as for non-
liquidity problems that could require them to look for secondary     expected loss.
funding sources to avoid default. Urgently require changes to
management and the business plan to stop the deterioration;          Credit culture:
with this it is considered probable that a correction can occur
                                                                     To create and promote a credit culture, the Group has permanent
over the medium term. The industry and country environment
                                                                     training programs for personnel involved in the loan origination
are of concern. Definitively an unacceptable risk.
                                                                     and authorisation processes. Included in such programs is


                                                                                   Grupo Scotiabank – 2009 Third Quarter Report        55
                                                                                                              ADDITIONAL INFORMATION


required advanced training in commercial banking practices that        Derivatives and money markets instruments are valuable risk
provides support tools for the analysis and evaluation of credit       management tools for the Group and its customers. The Group
risk, as well as decision-making workshops.                            uses derivative instruments to control the market risk originating
                                                                       from its funding and investing activities, as well as to reduce
Implementation of prudent credit criteria:                             funding-related costs. To control interest rate risk inherent in
                                                                       fixed-rate loans, the Group enters into interest rate swaps,
In accordance with the General Character Dispositions
                                                                       forwards and future contracts. Foreign exchange forward
applicable to credit institutions the Group has established
                                                                       contracts are also used to control exchange rate risk. The Group
control measures to identify, measure and limit the risk
                                                                       trades derivative instruments on behalf of its customers and also
positions from credit activity, in its different phases, on a timely
                                                                       maintains positions for its own account.
basis. These are documented in the Credit Policies and
Procedures Manual and are constantly reviewed and updated, as
                                                                       Market risk management in trading:
well as being submitted for approval annually by the Board
Directors.                                                             The trading portfolio (fixed rent, variable and derivatives) is
                                                                       marked to market daily.
The Risk Committee reviews the main classification monthly.
                                                                       The Group applies a series of techniques designed to evaluate and
The measurement of credit risk is based on a model of expected
                                                                       control the market risks which it is exposed to in the normal
losses and non-expected losses (Credit Metrics®), based on the
                                                                       course of its activities. The Risk Committees, both of the Group
observed changes in the borrower’s credit situation (transition
                                                                       in Mexico and of BNS in Toronto, and the Board of Directors
matrix) and of the severity of the loss by the type of the credit.
                                                                       authorize individual limit structures for each of the financial
                                                                       instruments traded in the markets and by business units. The limit
The portfolios and segments to which are applied the credit risk
                                                                       structure considers mainly volume and notional amounts for value
measure methodology are: a) Non-retail portfolio: Corporate,
                                                                       at risk, stop loss, diversification, stress, intraday, marketability,
Commercial, “Scotia Empresarial”, Government; b) Retail:
                                                                       precious metals and other limits.
Mortgages, Credit cards, Consumer and c) Non-traditional
portfolio: Money market and Derivatives.
                                                                       The value at risk (VaR) is an estimate of the potential loss of
                                                                       value within a specific level of statistical confidence that might
The expected loss represents an estimation of the impact of
                                                                       arise from maintaining a specific position during a specific period
defaults in a 12 month period. The non-expected loss is a
                                                                       of time (the holding period) under normal market conditions. VaR
measure of variance around the expected loss. It is calculated
                                                                       is calculated daily on the entire Group’s risk –exposed financial
with a horizon of one year at a 99.75% confidence level.
                                                                       instruments and portfolios using the Risk Watch methodology
                                                                       developed by Algorithmics.
To measure the effect of the portfolio concentration of
commercial credits, a co-relation between different economic
                                                                       The VaR is calculated using the historical simulation method,
sectors is used. For the retail portfolio (credit cards, personal
                                                                       with a 300-working day time span. In order to conform to the
and mortgages loans) hypothesis of constant co-relation are
                                                                       measurement methodologies used by BNS, the Group calculates
used in accordance with international practices.
                                                                       VaR considering a 99% confidence level and a 1-day holding
                                                                       period.
Additionally, tests are done, under the extreme conditions, to
determine their impact on the expected loss and non-expected
                                                                       During the annual review of limits, in May, 2009, the Board of
loss of the portfolio.
                                                                       Directors approved the change in the observation period, from 10
                                                                       days to 1 day. The change was proposed by the Risk
Market Risk:
                                                                       Management Committee and the Risk Administration area with
The purpose of the market risk management function is to               the objective of representing, in a more efficient way, the Value at
identify, measure, monitor and control risks arising from              Risk over daily gains / losses and for non-linear financial assets,
changes in interest rates, foreign exchange and equity market          such as options, to avoid the appearance that the portfolio is
and other risk factors in the money, foreign exchange, equity          maintained without rebalancing the hedge for 10 days.
and derivatives markets in which the Bank maintains positions
for its own account                                                    Since VaR is used to estimate potential losses under normal
                                                                       market conditions, stress testing is performed monthly assuming
The CAPA committee performs weekly reviews of the various              extreme conditions, with the purpose of determining risk
activities that represent market risk for the Group, focusing on       exposure under unusually large market price fluctuations (volatile
the management of assets and liabilities position reported in the      changes and the correlation among risk factor). The Risk
consolidated balance sheet in connection with credit, funding          Committee has approved the stress limits. “Backtesting” is
and investing, as well as securities trading activities.               carried out at the same time to compare the gains / losses with the
                                                                       observed value at risk and its impact and to calibrate the models


                                                                                     Grupo Scotiabank – 2009 Third Quarter Report         56
                                                                                                           ADDITIONAL INFORMATION


used. The efficiency level of the model is based on criteria         Manual for Operational Risk Data Gathering and Classification.
established by the Bank of International Settlements (BIS).          These policies define the requirements for reporting the
                                                                     information that supports the measuring processes, including the
Market risk management in credit and funding activities:             information, as well as its classification and specific
                                                                     characteristics, the functions and responsiblitities of the business
The interest rate risk, derived from the credit and funding
                                                                     line units to gather and report the loss data and their specific
activities are evaluated weekly by a gap analysis of breach of
                                                                     requirements.
derivatives interest rates of the deposits of funding and
investment.
                                                                     Operational Risk tolerance level. Is a tool to manage operational
Market risk management in available-for-sale securities
                                                                     losses and allows each department of the Group know the
Available for sale securities are considered within the Group’s      tolerance levels of losses applicable to each assumed loss event,
structural position and to measure their risk, repricing gaps and    as well as an incentive to improve the process of operational risk
sensitivity to interest rates.                                       management and implement the necessary actions, as soon as
                                                                     possible, to reduce the risk for future losses.
Liquidity Risk
                                                                     Key Risk Indicators (KRIs)
The Group’s assumes responsibility for liquidity risk as part of
                                                                     This process let the Group establish indicators, since variables
its function. This risk results from cash flow gaps. The main
                                                                     obtained of the processes which conduct is related with the level
objective of the liquidity risk management process is to
                                                                     of risk assumed, by the follow-up of each indicator that identify
guarantee that the Group can cover its obligations as they come
                                                                     the tendency and let issue in the time the indicators value. There
due. In order to comply with this objective, the Group applies
                                                                     are maximum values established or less admissible for each one
controls to the liquidity gaps, maintains diverse funding sources,
                                                                     of the selected indicators.
establishes limits and requires a minimum percentage of assets
to be of a liquid nature. This liquidity risk exposure is managed
                                                                     Model for Estimated Losses due to Legal Risk. The Group relies
by following the existing regulations and best market practices.
                                                                     on a methodology of estimating expected and non-expected losses
                                                                     due to legal risk, through which probable losses are estimated as a
Among the factors that are implicit in the strategy applied to
                                                                     consequence of an adverse result of litigation currently in process.
liquidity risk management are assessing and anticipating
                                                                     The methodology is based on loss experience in prior periods
commitments payable in cash, controlling asset and liability
                                                                     through which statistical analysis of their severity and occurrence
maturity gaps, diversifying sources of funding, establishing
                                                                     determines the probability of loss due to legal issues in day-to-
prudential limits and assuring immediate access to liquid assets.
                                                                     day business.
Liquidity risk is monitored and controlled by the type of
                                                                     The Group relies on a structured methodology of self-assessment
currency (MXN, UDI’s, USD), through accumulated liquidity
                                                                     of operational risk, that is applied throughout the organization and
gaps and minimum core liquid assets.
                                                                     through which inherent operational risks are identified in the
                                                                     processes with the following objectives:
Operational Risk
Operational risk is a non-discretionary risk, which is defined as    -   Evaluate the potential impact of significant operational risks
the potential loss resulting from internal control failures of           identified in the competitiveness, objectives, profitability,
deficiencies, errors in transaction processing and storage or in         productivity and reputation of the Group.
data transmission, as well as adverse administrative or legal        -   Priortize the risks according to their impact and the
resolutions, frauds or theft and includes, among other things,           importance of the mitigating circumstances on the
technological and legal risk.                                            operational risk.
                                                                     -   Guide each unit of the Group in its process of operational
The Group has put in place policies and procedures, enabling it          risk management.
to implement an appropriate operational risk management              -   Have a systematic procedure, in order that the Group remains
process, which is described below:                                       aware of its operational risks.
                                                                     -   Comply with the requirements established by the CNBV in
Policies for Operational Risk Management. These policies                 the article 86, paragraph. III of the Prudential Character
primarily promote the risk management culture, particularly as           Dispositions applicable to management risk.
to operational risk, so that the Group can measure, identify,
monitor, limit, control and disseminate the operational risk
inherent in the day-to-day activities.




                                                                                   Grupo Scotiabank – 2009 Third Quarter Report        57
                                                                                                     ADDITIONAL INFORMATION


       Attachment 11

                                                    Consejo de Administración
                                          Grupo Financiero Scotiabank Inverlat, S.A. de C.V.

                                                              Presidente
                                                       Peter Christopher Cardinal

                                                           Vicepresidente
                                                        Carlos Muriel Vázquez

                                 Representantes de la Serie “F” en el Consejo de Administración de la
                                                              Sociedad
                              Miembros Propietarios                                     Miembros Suplentes
        Consejeros Independientes
             Thomas Heather Rodríguez                                               Javier Pérez Rocha
             Carlos Muriel Vázquez                                                  Federico Santacruz González

        Consejeros
             Pedro Sáez Pueyo                                                       Raúl Fernández-Briseño
             Peter Christopher Cardinal                                             Gonzalo Rojas Ramos
             Anatol von Hahn                                                        Pablo Aspe Poniatowski

        Consejero Funcionarios
             Nicole Reich De Polignac                                               José Del Águila Ferrer

                                 Representantes de la Serie “B” en el Consejo de Administración de la
                                                              Sociedad
        Consejeros Independientes
             Patricio Treviño Westendarp                                            Pablo Pérezalonso Eguía
             Roberto Hemuda Debs                                                    Eduardo Trigueros y Gaissman
             Juan Manuel Gómez Chávez                                               Sergio Eduardo Contreras Pérez

        Consejeros Funcionarios
             Felipe De Yturbe Bernal                                                Alberto Miranda Mijares
             Jorge Mauricio Di Sciullo Ursini                                       Jean-Luc Rich

                                    Representantes de la Serie “F” en el Órgano de Vigilancia de la
                                                               Sociedad
                                                              Comisarios
              Guillermo García-Naranjo Álvarez                                      Mauricio Villanueva Cruz

                                    Representantes de la Serie “B” en el Órgano de Vigilancia de la
                                                               Sociedad
              George Macrae Scanlan                                                 Alejandro De Alba Mora

                      Secretario                                                       Prosecretario
              Jorge Mauricio Di Sciullo Ursini                                      Mónica Cardoso Velázquez




The amount paid to Board Members to attend board meetings and committee meetings totalled P$1.8 million for the nine
months ended September 30, 2009.


                                                                             Grupo Scotiabank – 2009 Third Quarter Report   58
“We the undersigned declare under oath, of telling the truth that, in the scope of our respective functions, we prepared the
information relative to the financial group contained in the current report, that which, to our trustworthy knowledge and
understanding, reasonably reflects its current financial position”




               NICOLE REICH DE POLIGNAC                                      JEAN-LUC RICH
                      PRESIDENT                                            DIRECTOR GENERAL
                                                                              FINANCE AND
                                                                            ADMINISTRATION




                     KEN PLUGFELDER                                         GORDON MACRAE
                   DIVISIONAL DIRECTOR                                      DIRECTOR GROUP
                          AUDIT                                               ACCOUNTING




                                                                           Grupo Scotiabank – 2009 Third Quarter Report   59

				
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