Asia Pacific
Robin Hibberd
1 Agenda
• Market overview
• Business overview
• Growth initiatives
2 Strong Economic Growth
Real GDP Growth (2004E)
8.7%
7.5% 6.5% 6.0% 5.8% 5.0% 4.7% 4.5%
2.6%
China Thailand India Hong Malaysia Korea Indonesia USA Canada Kong
3 Large Populations – Large Markets
• 30 million • 30 million people people
• 975 branches • 1 branch
4 Low Bankable Population to Total Population
Proportion of Bankable Population to Total Population Bankable Population (MM) 81 30 260 13 60 170 20
70%
60
50 Natural Growth 40
30
20
10
0 India Indonesia China Thailand Japan USA Canada
5 Low Household Debt – Significant Growth Potential
Household Debt as % of GDP (2002) 100
75
50
25
0 India China Thailand Indonesia Japan Canada US
Opportunity for new products: mortgages, car loans, credit cards etc. 6 Opportunity to Participate as Banking Consolidates
Concentration: Market share of top five banks
93% 92% 87% 84% 86% 75% 76% 70% 66% 63% 64% 54%
38%
a n ia ia s ia n ia d g e a s ina s a re l n n r d wa nd y h ine p o ra la o o i I a p ne a t i K p na a l C p J K s a a T a o u ha g g C M ili A T n in h Ind o P H S
7 Asian Markets are Highly Attractive
Strong overall economic growth
Large markets
Growth in bankable populations
Under penetration of many products/services
Opportunities to participate in dynamic and consolidating markets
8 Agenda
• Market overview
• Business overview
• Growth initiatives
9 Long Experience in Asia
Years since entry 10 20 30 40
Japan 41
Hong Kong 31
Malaysia 31
Singapore 30
S. Korea 26
Thailand 24
China 22
India 22
Taiwan 17
Vietnam 8
10 A Sustained and Growing Presence
Korea
China Japan
Taiwan • 10 countries India • 26 branches Hong Kong & offices Thailand Vietnam • 600 staff
Malaysia Singapore
11 Primarily Wholesale & Niche Businesses
% of 2003 Total Revenues
Other Corporate 30% Commercial Banking 36%
Securities 34%
Other includes: Trade Finance, Correspondent Banking, Precious Metals, Retail and Treasury 12 Consistent Growth in Earning Assets
C$Bn
10 Securities Loans 8 CAGR=14%
6
4
2
0 1995 1996 1997 1998 1999 2000 2001 2002 2003
13 Consistent Earnings Growth
Net Income (1999-2003) (C$MM)
CAGR=15% 81.5 75.3 66.8 60.1
43
1999 2000 2001 2002 2003
14 Risk Management is a Priority in Asia
Improving Business Mix
IG 87 IG 87 • Knowledge and IG 85 experience
IG 83 • Focusing on lower risk businesses
• Little market risk taken IG 77 • Matching exposure to appetite in markets
2000 2001 2002 2003 2004
15 Agenda
• Market overview
• Business overview
• Growth initiatives
16 Organic Growth Drivers
Malaysia
India
China
Trade Finance
Corporate customers
17 Increased Focus on M&A
• Access structural growth in Personal and Commercial banking
• Gain critical mass in attractive markets
• Capitalize on changing market dynamics and new opportunities
• Leveraging Scotiabank group capabilities
18 Exercising our Asian Option
Objectives • Achievement of scale • Financial returns = effort + resource commitment
Actively managing M&A process • Ensuring we are “known” as potential strategic investor • Working with target institutions to develop opportunities • Filtering potential opportunities against objectives
19 Scotiabank’s Advantages in Asia
Decades of presence and experience
Local knowledge, customers and contracts
Strong reputation with regulators
Institutional familiarity
Established infrastructure – local management – licenses – existing earnings stream
Opportunity to leverage skills of greater bank
20 Asia: Part of our Past, Present and Future
Asia’s growing and dynamic markets + Scotiabank’s solid Asian presence and experience
Unparalleled opportunity for growth
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