Exhibit 99.1

News release via Canada NewsWire, Toronto 416-863-9350

	    Attention Business/Financial Editors:
	    Scotiabank reports improved second quarter earnings of $980 million

	    Second quarter highlights:

	    <<
	    -   Earnings per share (diluted) of $0.97, compared to $0.82 last quarter
	        and $1.03 last year
	    -   Net income of $980 million, versus $835 million last quarter and
	        $1,039 million last year
	    -   Return on equity of 21.4%, compared to 22.4% last year
	    -   Productivity ratio of 54.8%, versus 53.8% last year
	    -   Quarterly dividend increased by 2 cents to 49 cents per common share
	    >>

	    TORONTO, May 27 /CNW/ - Scotiabank today announced second quarter net
income of $980 million, down 6% compared with the same period last year, but
up $145 million or 18% over last quarter.
	    Diluted earnings per share (EPS) were $0.97 compared to $1.03 in the same
period last year and $0.82 last quarter. Return on equity remained strong at
21.4%.
	    "Scotiabank's performance was solid during a challenging quarter for
global financial markets," said Scotiabank President and CEO Rick Waugh.
"Compared to the same period one year ago, we achieved higher net interest
income, and Domestic Banking, Scotia Capital and International Banking
experienced strong asset growth. As well, this quarter's results benefited
from the positive contributions of recent acquisitions. However, these gains
were offset by the negative impact of foreign currency translation, higher
provisions for credit losses, weaker capital market revenues and an increase
in expenses incurred on revenue growth initiatives.
	    "Our Domestic Banking platform is performing very well in a competitive
market. The division experienced strong growth in assets, with market share
gains in residential mortgages, total deposits and mutual funds.
	    "The combination of organic growth and contributions from acquisitions
fuelled a solid year-over-year increase in earnings in International Banking.
These results were achieved notwithstanding the negative impact of foreign
currency translation due to the rapid rise of the Canadian dollar in 2007. We
continue to see assets increasing in all regions with solid contributions from
our most recent acquisition in Chile and on-going growth from Peru and the
Caribbean and Central America.
	    "Scotia Capital's results showed strength during a turbulent period, with
record results in ScotiaMocatta, strong loan growth, and widening spreads.
However, trading results were below the high levels a year ago, but rebounded
from the first quarter.
	    "In a period when many financial institutions experienced significant
problems in global and domestic capital markets, our strong risk management
and moderate exposures resulted in minimal writedowns. Our loan portfolios
performed very well with Scotia Capital showing net recoveries, and loan
losses being well contained in other business lines.
	    "We continue to prudently manage our capital position to ensure that it
is adequate to support strategic acquisitions and ongoing business development
opportunities.
	    "Despite difficult markets, we are on track to achieve three of our four
key financial and operational targets: ROE, productivity and maintaining
strong capital ratios. This is a reflection of the relative strength of our
businesses and strategies. However, the challenging global financial markets
continue to impact earnings and, as a result, it is unlikely that we will meet
our EPS growth objective set at the end of last year. At the same time, our
rebound in earnings this quarter, the continued solid asset growth in all
three business lines and improved funding costs, all point to a stronger
second half in 2008. In view of these factors and our strong and improving
capital position, we increased our quarterly dividend 2 cents to 49 cents per

common share. This extends our track record of providing shareholders with
consistent dividend growth."

	    <<
	    Year-to-date performance versus key 2008 financial and operational
	    objectives was as follows:
	    -------------------------------------------------------------------------
	    1.  Target: Earn a return on equity (ROE)(1) of 20 to 23%. For the six
	        months Scotiabank earned an ROE of 20%.
	    -------------------------------------------------------------------------
	    2.  Target: Generate growth in earnings per common share (diluted) of 7
	        to 12%. Our year-over-year growth in earnings per share was negative
	        12%.
	    -------------------------------------------------------------------------
	    3.  Target: Maintain a productivity ratio(1) of less than 57%.
	        Scotiabank's ratio was 55.6% for the six months.
	    -------------------------------------------------------------------------
	    4.  Target: Maintain sound capital ratios. At 9.6%, Scotiabank's Tier 1
	        capital ratio remains strong by Canadian and International standards.

	    (1) Refer to non-GAAP measures discussion below.

	    Live audioWeb broadcast of the Bank's analysts' conference call.
	    See below for details.

	                                             As at and               For the
	                            for the three months ended      six months ended
	    -------------------------------------------------------------------------
	                        April 30 January 31   April 30   April 30   April 30
	    (Unaudited)             2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Operating results
	     ($ millions)
	    Net interest income    1,873      1,814      1,794      3,687      3,570
	    Net interest
	     income(TEB(1))        1,973      1,932      1,903      3,905      3,784
	    Total revenue          3,172      2,839      3,102      6,011      6,211
	    Total revenue(TEB(1))  3,272      2,957      3,211      6,229      6,425
	    Provision for credit
	     losses                  153        111         20        264         83
	    Non-interest expenses  1,794      1,669      1,726      3,463      3,450
	    Provision for income
	     taxes                   209        193        286        402        563
	    Provision for income
	     taxes(TEB(1))           309        311        395        620        777
	    Net income               980        835      1,039      1,815      2,059
	    Net income available
	     to common
	     shareholders            958        814      1,028      1,772      2,040
	    -------------------------------------------------------------------------
	    Operating performance
	    Basic earnings per
	     share($)               0.97       0.83       1.04       1.80       2.06
	    Diluted earnings per
	     share($)               0.97       0.82       1.03       1.79       2.04
	    Return on equity
	     (%)(1)                 21.4       18.3       22.4       20.0       22.4
	    Productivity ratio(%)
	     (TEB(1))               54.8       56.5       53.8       55.6       53.7
	    Net interest margin
	     on total average
	     assets (%) (TEB(1))    1.76       1.79       1.93       1.78       1.92
	    -------------------------------------------------------------------------
	    Balance sheet

	     information
	     ($ millions)
	    Cash resources and
	     securities          129,749    130,893    131,296
	    Loans and
	     acceptances         267,875    260,501    226,310
	    Total assets         452,573    449,422    411,710
	    Deposits             322,438    316,797    291,603
	    Preferred shares       2,210      1,865      1,290
	    Common shareholders'
	     equity               18,213     18,128     18,705
	    Assets under
	     administration      202,266    195,155    208,426
	    Assets under
	     management           32,917     31,704     30,448
	    -------------------------------------------------------------------------
	    Capital measures(2)
	    Tier 1 capital
	     ratio (%)               9.6        9.0       10.1
	    Total capital
	     ratio (%)              11.7       10.2       11.4
	    Tangible common
	     equity to risk-
	     weighted assets
	     (1) (%)                 7.5        7.2        8.0
	    Risk-weighted assets
	     ($ millions)        218,878    234,876    213,078
	    -------------------------------------------------------------------------
	    Credit quality
	    Net impaired
	     loans(3)
	     ($ millions)            845        689        579
	    General allowance
	     for credit losses
	     ($ millions)          1,323      1,298      1,298
	    Net impaired loans
	     as a % of loans and
	     acceptances(3)         0.32       0.26       0.26
	    Specific provision
	     for credit losses
	     as a % of average
	     loans and
	     acceptances
	     (annualized)           0.24       0.18       0.08       0.21       0.10
	    -------------------------------------------------------------------------
	    Common share
	     information
	    Share price ($)
	      High                 50.00      54.00      54.73      54.00      54.73
	      Low                  42.00      43.10      49.34      42.00      48.80
	      Close                47.82      48.19      53.39
	    Shares outstanding
	     (millions)
	      Average - Basic        986        985        992        985        992
	      Average - Diluted      992        992      1,001        992      1,001
	      End of period          987        985        990
	    Dividends per
	     share($)               0.47       0.47       0.42       0.94       0.84
	    Dividend yield (%)       4.1        3.9        3.2        3.9        3.2
	    Dividend payout
	     ratio(4) (%)           48.4       56.9       40.6       52.3       40.9
	    Market capitalization
	     ($ millions)         47,194     47,487     52,840
	    Book value per

	     common share($)       18.45      18.40      18.90
	    Market value to book
	     value multiple          2.6        2.6        2.8
	    Price to earnings
	     multiple (trailing
	     4 quarters)            12.7       12.5       13.7
	    -------------------------------------------------------------------------
	    Other information
	    Employees(5)          62,143     62,002     55,926
	    Branches and
	     offices(5)            2,529      2,458      2,242
	    -------------------------------------------------------------------------
	    (1) Non-GAAP measure. Refer to below for a discussion of these measures.
	    (2) Effective November 1, 2007, regulatory capital ratios are determined
	        in accordance with Basel II rules. Comparative amounts for prior
	        periods were determined in accordance with Basel I rules.
	    (3) Net impaired loans are impaired loans less the specific allowance for
	        credit losses.
	    (4) Represents common dividends for the period as a percentage of the net
	        income available to common shareholders for the period.
	    (5) Certain amounts for prior periods have been restated to include final
	        numbers for all new acquisitions.
	    >>

	    Strategies for success

	    The volatility in global financial markets carried forward into the
second quarter. Our Bank met the challenges and results improved versus the
first quarter - due to continued solid performances from most areas of our
businesses. We remain confident that we will achieve most of our key financial
and operational objectives, but it is unlikely that we will meet our earnings
growth objective.
	    We have the right growth strategy, focused on diversification by business
and by geography, and the right priorities to ensure our long-term success:
sustainable revenue growth, effective capital management and leadership.
	    We continued to find new ways to generate and sustain revenue growth by
helping our customers become better off financially. During the quarter, we
introduced innovative new products and services, such as the Scotia Global
Climate Change Fund - the first of its kind in Canada. We launched our "Bank
the Rest" savings program, which helps customers increase their savings every
time they use their ScotiaCard to make a point of sale purchase.
	    We continued to use our capital prudently keeping our balance sheet
strong yet being able to support overall asset growth and strategic
acquisitions - such as our purchase of certain assets from Grupo Altas Cumbres
of Chile. These assets include Banco de Antigua in Guatemala, and the business
assets of Banco de Ahorro y Credito Altas Cumbres in the Dominican Republic,
and Banco del Trabajo in Peru which was announced subsequent to quarter end.
	    In terms of leadership, we have tremendous bench strength and continue to
develop leaders by broadening their experience in different businesses and
markets. We also enhanced our people development with the launch of an
internal online resource site that provides Scotiabank's current and aspiring
leaders with tools to support career development plans.
	    Although the start of the year has been challenging, we achieved a
rebound in earnings this quarter. This overall performance, combined with
improved funding costs, continued solid asset growth in all three of our
business lines, and our effective risk and cost management, points to a
stronger second half in 2008. As well, we continue to believe in the ability
of our great team of people to effectively execute our strategies and
priorities over the balance of the year.

	    (signed)

	    Rick Waugh
	    President and Chief Executive Officer

	    <<
	    2008 Objectives -Our Balanced Scorecard
	    -------------------------------------------------------------------------
	    Financial

	    -   Return on equity of 20-23%
	    -   Diluted earnings per share growth of 7-12%
	    -   Long-term shareholder value through increases in dividends and stock
	        price appreciation

	    -------------------------------------------------------------------------

	    Operational

	    -   Productivity ratio of (less than)57%
	    -   Sound ratings
	    -   Strong practices in corporate governance and compliance processes
	    -   Sound capital ratios

	    -------------------------------------------------------------------------

	    Customer

	    -   High levels of customer satisfaction and loyalty
	    -   Deeper relationships with existing customers
	    -   New customer acquisition

	    -------------------------------------------------------------------------

	    People

	    -   High levels of employee satisfaction and engagement
	    -   Enhance diversity of workforce
	    -   Commitment to corporate social responsibility and strong community
	        involvement


	    Domestic Banking

	    -   We continued the strategic expansion of our distribution network,
	        adding four new branches in high-growth markets this quarter, with
	        plans to open approximately 10 over the balance of the year. As well,
	        we expanded our sales capacity in key growth markets by hiring an
	        additional 103 personal and small business sales officers in the
	        first half of 2008.
	    -   To meet customer needs and improve the customer experience, we
	        continued to develop new products:
	        -  ScotiaMcLeod Direct Investing introduced Scotia Active Service,
	           designed for our most active online clients, which gives these
	           customers lower flat-fee pricing options based on their quarterly
	           trade volume.
	        -  We introduced a ScotiaGold Passport for business VISA card that
	           allows small business customers to earn valuable reward points
	           that can be redeemed for an extensive array of rewards, and allows
	           owners to keep their business and personal spending separate.
	    -   We launched a new hockey website in March, scotia-hockey.com, to
	        showcase our continued association with Canada's favorite sport. The
	        launch was promoted with a national contest called Build Stanley,
	        which challenged Canadians to create their own replica of the Stanley
	        Cup. In just seven weeks, the contest reached over one hundred
	        thousand hockey fans from coast to coast, primarily through word of
	        mouth, adding to our national visibility and increasing brand

	        awareness.

	    International Banking

	    -   We continue to invest in Peru, a key growth market. In May, we
	        announced:
	        -  an increase in our ownership of Scotiabank Peru to 98%,
	           as we purchased Intesa Sanpaolo's 20% interest; and
	        -  the purchase of Banco del Trabajo's operations in Peru, which
	           increases our share of the important consumer finance market.
	    -   We continue to expand our distribution footprint in key markets:
	        -  we opened 14 branches during the quarter, and plan to open 90 to
	           100 branches in 2008;
	        -  we opened a Private Client Group (PCG) office in Barbados, in
	           addition to our offices in the Bahamas, Cayman Islands and the
	           Dominican Republic, to better serve our high net worth customers,
	           and plan to open another seven PCG offices over the balance of the
	           year.
	    -   We are expanding our credit card offering to offer better value to
	        customers, launching a new Aero Platinum Visa card with a proprietary
	        competitive travel rewards program in Trinidad, a new Mastercard
	        Black card for our private client customers in the Bahamas and Cayman
	        Islands, as well as a new Global Card from our joint venture in
	        Mexico aimed at the consumer finance segment.
	    -   We began the consolidation of call centres in the English Caribbean
	        to increase both efficiency and capacity.

	    Scotia Capital

	    -   Scotia Capital's Canadian operations won a number of awards from a
	        premier strategic consulting and research firm, including No.1
	        rankings in foreign exchange, debt capital markets and corporate
	        derivatives.
	    -   Scotia Capital acted as co-financial advisor to the board of CHC
	        Helicopter Corporation on the $3.7 billion sale of CHC to First
	        Reserve Corporation, a leading private equity firm in the energy
	        industry.
	    -   Scotia Waterous is acting as co-financial advisor to Bois d'Arc
	        Energy, Inc. on the US$1.8 billion acquisition of Bois d'Arc by Stone
	        Energy Corporation.
	        The combined company will become one of the largest Gulf of Mexico-
	        focused operating companies.
	    -   Scotia Capital was the joint bookrunner and co-manager for a
	        US$455 million senior note issue by Videotron Ltd. As part of the
	        transaction, we were appointed lead hedge arranger and lead hedge
	        provider for the associated hedging program.

	    Employee highlights

	    -   Our commitment to being a global employer of choice was recognized by
	        the Great Place to Work Institute, which named Scotiabank as one of
	        the 2008 Best Places to Work in Central America and Caribbean. The
	        annual recognition is based primarily on employees' feedback to a
	        survey that measures the level of trust, pride and camaraderie within
	        the workplace. Locations that participated in the survey include
	        Puerto Rico, the Dominican Republic, El Salvador and Costa Rica.

	    Community involvement

	    -   Scotiabank has established the Scotiabank Mexico Corporate Social
	        Responsibility Fund at the University of Alberta in Edmonton. Endowed
	        awards will support and enhance the teaching and research experience
	        of undergraduate and graduate students - both inbound from and
	        outbound to Mexico - in the university's Faculty of Agricultural,

	        Life & Environmental Sciences.
	    -   Scotiabank announced a new partnership with Caribana. The agreement
	        includes title sponsorship of the Caribana Festival, Toronto's annual
	        celebration of Caribbean music, cuisine, revelry, and visual and
	        performing arts, which attracted more than 1.2 million people last
	        year and is a key tourist attraction for the city. This partnership
	        will build on Scotiabank's extensive presence in the Caribbean, as
	        well as our support for diversity and the communities we serve.
	    >>

	    -------------------------------------------------------------------------
	    Forward-looking statements

	    Our public communications often include oral or written forward-looking
statements. Statements of this type are included in this document, and may be
included in other filings with Canadian securities regulators or the U.S.
Securities and Exchange Commission, or in other communications. All such
statements are made pursuant to the "safe harbour" provisions of the United
States Private Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation. Forward-looking statements may include
comments with respect to the Bank's objectives, strategies to achieve those
objectives, expected financial results (including those in the area of risk
management), and the outlook for the Bank's businesses and for the Canadian,
United States and global economies. Such statements are typically identified
by words or phrases such as "believe," "expect," "anticipate," "intent,"
"estimate," "plan," "may increase," "may fluctuate," and similar expressions
of future or conditional verbs, such as "will," "should," "would" and "could."
	    By their very nature, forward-looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and specific, and
the risk that predictions and other forward-looking statements will not prove
to be accurate. Do not unduly rely on forward-looking statements, as a number
of important factors, many of which are beyond our control, could cause actual
results to differ materially from the estimates and intentions expressed in
such forward-looking statements. These factors include, but are not limited
to: the economic and financial conditions in Canada and globally; fluctuations
in interest rates and currency values; liquidity; the effect of changes in
monetary policy; legislative and regulatory developments in Canada and
elsewhere, including changes in tax laws; operational and reputational risks;
the accuracy and completeness of information the Bank receives on customers
and counterparties; the timely development and introduction of new products
and services in receptive markets; the Bank's ability to expand existing
distribution channels and to develop and realize revenues from new
distribution channels; the Bank's ability to complete and integrate
acquisitions and its other growth strategies; changes in accounting policies
and methods the Bank uses to report its financial condition and the results of
its operations, including uncertainties associated with critical accounting
assumptions and estimates; the effect of applying future accounting changes;
global capital markets activity; the Bank's ability to attract and retain key
executives; reliance on third parties to provide components of the Bank's
business infrastructure; unexpected changes in consumer spending and saving
habits; technological developments; fraud by internal or external parties,
including the use of new technologies in unprecedented ways to defraud the
Bank or its customers; consolidation in the Canadian financial services
sector; competition, both from new entrants and established competitors;
judicial and regulatory proceedings; acts of God, such as earthquakes and
hurricanes; the possible impact of international conflicts and other
developments, including terrorist acts and war on terrorism; the effects of
disease or illness on local, national or international economies; disruptions
to public infrastructure, including transportation, communication, power and
water; and the Bank's anticipation of and success in managing the risks
implied by the foregoing. A substantial amount of the Bank's business involves
making loans or otherwise committing resources to specific companies,
industries or countries. Unforeseen events affecting such borrowers,
industries or countries could have a material adverse effect on the Bank's

financial results, businesses, financial condition or liquidity. These and
other factors may cause the Bank's actual performance to differ materially
from that contemplated by forward-looking statements. For more information,
see the discussion starting on page 56 of the Bank's 2007 Annual Report.
	    The preceding list of important factors is not exhaustive. When relying
on forward-looking statements to make decisions with respect to the Bank and
its securities, investors and others should carefully consider the preceding
factors, other uncertainties and potential events. The Bank does not undertake
to update any forward-looking statements, whether written or oral, that may be
made from time to time by or on its behalf.
	    The "Outlook" section in this document is based on the Bank's views and
the actual outcome is uncertain. Readers should consider the above-noted
factors when reviewing this section.
	    -------------------------------------------------------------------------

	    Additional information relating to the Bank, including the Bank's Annual
Information Form, can be located on the SEDAR website at www.sedar.com and on
the EDGAR section of the SEC's website at www.sec.gov.


	    MANAGEMENT'S DISCUSSION & ANALYSIS

	    Non-GAAP Measures

	    The Bank uses a number of financial measures to assess its performance.
Some of these measures are not calculated in accordance with Generally
Accepted Accounting Principles (GAAP), are not defined by GAAP and do not have
standardized meanings that would ensure consistency and comparability between
companies using these measures. These non-GAAP measures are used in our
Management's Discussion and Analysis defined below:

	    Taxable equivalent basis

	    The Bank analyzes net interest income and total revenues on a taxable
equivalent basis (TEB). This methodology grosses up tax-exempt income earned
on certain securities reported in net interest income to an equivalent before
tax basis. A corresponding increase is made to the provision for income taxes;
hence, there is no impact on net income. Management believes that this basis
for measurement provides a uniform comparability of net interest income
arising from both taxable and non-taxable sources and facilitates a consistent
basis of measurement. While other banks also use TEB, their methodology may
not be comparable to the Bank's. The TEB gross-up to net interest income and
to the provision for income taxes in the current period is $100 million versus
$109 million in the same quarter last year and $118 million last quarter.
	    For purposes of segmented reporting, a segment's net interest income and
provision for income taxes are grossed up by the taxable equivalent amount.
The elimination of the TEB gross up is recorded in the "Other" segment.

	    Productivity ratio (TEB)

	    Management uses the productivity ratio as a measure of the Bank's
efficiency. This ratio represents non-interest expenses as a percentage of
total revenue on a taxable equivalent basis.

	    Net interest margin on total average assets (TEB)

	    This ratio represents net interest income on a taxable equivalent basis
as a percentage of total average assets.

	    Return on equity

	    Return on equity is a profitability measure that presents the net income
available to common shareholders as a percentage of the capital deployed to
earn the income. The implementation of the new accounting standards for

financial instruments in the first quarter of 2007 resulted in certain
unrealized gains and losses being reflected in a new component of
shareholders' equity. The Bank calculates its return on equity using average
common shareholders' equity, including all components of shareholders' equity.

	    Economic equity and Return on economic equity

	    For internal reporting purposes, the Bank allocates capital to its
business segments using a methodology that considers credit, market,
operational and other risks inherent in each business segment. The amount
allocated is commonly referred to as economic equity. Return on equity for the
business segments is based on the economic equity allocated to the business
segments. The difference between the economic equity amount required to
support the business segments' operations and the Bank's total equity is
reported in the "Other" segment.

	    Tangible common equity to risk-weighted assets

	    Tangible common equity to risk-weighted assets is an important financial
measure for rating agencies and the investing community. Tangible common
equity is total shareholders' equity plus non-controlling interest in
subsidiaries, less preferred shares, unrealized gains/losses on available-for-
sale securities and cash flow hedges, goodwill and other intangible assets
(net of taxes). Tangible common equity is presented as a percentage of risk-
weighted assets.
	    Regulatory capital ratios, such as Tier 1 and Total Capital ratios, have
standardized meanings as defined by the Office of the Superintendent of
Financial Institutions Canada (OSFI).

	    <<
	    Group Financial Performance and Financial Condition         May 27, 2008
	    >>

	    Scotiabank's net income was $980 million in the second quarter, down
$59 million or 6% from the same period a year ago, driven primarily by higher
provisions for credit losses, weaker capital markets revenues, higher expenses
incurred on revenue growth initiatives, and the negative impact of foreign
currency translation. Partly offsetting these items was an increase in net
interest and fee income from strong asset and customer account growth,
contributions from acquisitions and the benefit of a lower effective tax rate.
	    Compared to the prior quarter, net income rose $145 million or 18%, due
mainly to the writedowns on certain structured credit instruments recorded
last quarter, increased net interest income and higher trading revenues. These
were partially offset by higher provisions for credit losses and increased
expenses, including higher performance-based compensation in line with growth
in trading revenues.
	    Net income for the six months was $1,815 million, $244 million or 12%
lower than the same period last year. Higher net interest income from
continued asset growth, positive contributions from acquisitions and the
impact of lower tax rates were more than offset by higher provisions for
credit losses, lower trading revenues and writedowns on certain structured
credit instruments recorded in the first quarter. As well, there was a
negative impact from foreign currency translation this year compared to last.

	    Total revenue

	    This quarter, total revenue (on a taxable equivalent basis) was
$3,272 million, up $61 million or 2% from the same quarter last year. The
increase was attributable to strong growth in net interest income due to
broad- based asset growth, along with higher securitization and mutual fund
revenues, and the contributions of recent acquisitions. These were partly
offset by weaker trading revenues, lower gains on non-trading securities, and
the negative impact of foreign currency translation.
	    Compared with last quarter, total revenues were higher by $315 million or

11%, mainly due to higher net interest income from asset growth including the
contributions from recent acquisitions and writedowns on certain structured
credit instruments in the first quarter.
	    For the six months, total revenue of $6,229 million was $196 million or
3% lower than the same period last year, due mainly to a decline in trading
revenues, reduced levels of gains on non-trading securities and writedowns on
certain structured credit instruments in the first quarter.

	    Net interest income

	    This quarter's net interest income (on a taxable equivalent basis) was
$1,973 million, up $70 million or 4% over the same quarter last year. The
increase was driven in part by strong contributions from acquisitions and
robust broad-based asset growth, partly offset by a compressed margin.
	    Net interest income grew $41 million or 2% from the first quarter. The
increased contribution from higher lending volumes, acquisitions and lower
losses on derivatives used for asset/liability management were partly offset
by the impact of the shorter second quarter.
	    For the six months, net interest income rose to $3,905 million, up
$121 million or 3% from the same period last year, driven both by organic
asset growth and the contributions of recent acquisitions, partly offset by a
lower margin.
	    The Bank's net interest margin, at 1.76% in the second quarter, was down
from 1.93% in the same quarter of last year and from 1.79% in the first
quarter. Compared to the prior year, the reduction in the margin was due
mainly to lower interest recoveries, a decline in tax-exempt dividend income
and the negative impact of fair value changes on derivatives used for
asset/liability management. The quarter-over-quarter decrease was due
primarily to lower tax-exempt dividend income and change in asset mix with the
growth in lower yielding trading assets.

	    Other income

	    Other income was $1,299 million this quarter, down 1% or $9 million from
$1,308 million in the same quarter last year. There were lower trading
revenues, underwriting revenues, retail brokerage fees and gains on non-
trading securities, all reflecting in part the challenged global financial
markets. These reductions were partly offset by increased securitization,
insurance and mutual fund revenues. In the second quarter, the loss on shares
sold into the VISA initial public offering was mostly offset by additional
VISA shares allocated to the Bank, resulting in an insignificant net amount
recognized.
	    Quarter over quarter, other income was up $274 million or 27%, due
primarily to writedowns on certain structured credit instruments recorded last
quarter. As well, there were higher securitization and trading revenues, with
record performance in precious metals trading.
	    For the six months, other income was $2,324 million, a decrease of
$317 million or 12% from the same period last year, due primarily to
writedowns on certain credit instruments recorded in the first quarter of this
year, weaker trading revenues and lower underwriting revenues. Partly
offsetting these items were higher credit fees, insurance revenues,
securitization revenues and mutual fund fees.

	    Provision for credit losses

	    The provision for credit losses was $153 million this quarter, an
increase of $133 million from the same period last year and a $42 million
increase from last quarter. The higher level in the second quarter compared to
a year ago was due to lower net recoveries in the Scotia Capital portfolio.
There were higher provisions in retail and commercial portfolios in Domestic
Banking and in the retail portfolios in International Banking. In addition,
there was a reduction in the general allowance of $25 million last year.
Further discussion on credit risk is provided below.

	    Non-interest expenses and productivity

	    Non-interest expenses were $1,794 million this quarter, $68 million or 4%
higher than the same period last year. The increase was primarily driven by
ongoing business and growth initiatives, including branch expansion in Canada,
Mexico and the Caribbean, along with the impact of recent acquisitions. These
increases were partly offset by lower performance-based compensation, due
primarily to a decline in trading and commissionable revenues, a reduction in
stock-based compensation from a lower share price and the positive effect of
foreign currency translation.
	    Non-interest expenses were $125 million higher than the first quarter.
Increases were across most categories, mainly in premises and technology and
remuneration, as higher performance-based compensation from increased trading
revenue more than offset lower stock-based compensation. As well, there were
higher legal costs this quarter, and last quarter benefited from lower
business taxes.
	    Year to date, non-interest expenses were slightly higher from the same
period last year, as increases across most categories, including the impact of
recent acquisitions, were mostly offset by the impact of foreign currency
translation.
	    The productivity ratio, a measure of the Bank's efficiency, was 54.8%,
compared to 53.8% in the same quarter last year and 56.5% last quarter. The
Bank's operating leverage this quarter - the rate of growth in total revenue
on a tax equivalent basis less the rate of growth in expenses - was negative
1.9% year over year. On a year-to-date basis, operating leverage was a
negative 3.4%, partly as a result of the writedowns on certain credit
instruments in the first quarter and lower trading revenues.

	    Taxes

	    The effective tax rate for this quarter was 17.0%, down from 21.1% in the
same quarter last year and 18.2% in the first quarter. The decrease from a
year ago was due primarily to a reduction in the statutory tax rate in Canada
and a higher level of income in lower tax rate jurisdictions in which the Bank
operates. Compared to the previous quarter, there were higher tax savings from
the Bank's foreign operations, partially offset by lower tax-exempt dividend
income.
	    The tax rate for the six months was 17.6% compared to 21.0% for the same
period last year, due primarily to higher income in lower tax jurisdictions.

	    Risk management

	    The Bank's risk management policies and practices are unchanged from
those outlined in pages 56 to 67 of the 2007 Annual Report.

	    Credit risk
	    Credit conditions remained relatively stable in most of the Bank's
lending markets. The provision for credit losses was $153 million in the
second quarter, compared to $20 million in the same period last year and
$111 million in the previous quarter. Last year's provision was comprised of
$45 million in specific provisions and a reduction of $25 million in the
general allowance for credit losses.
	    Scotia Capital had net recoveries of $9 million in the second quarter,
compared to net recoveries of $51 million in the second quarter of last year
and net recoveries of $10 million in the previous quarter. The net recovery in
the current quarter related primarily to recoveries and provision reversals in
the Canadian and U.S. portfolios. There were no new provisions in this
quarter.
	    The provision for credit losses of $102 million in the Domestic Banking
portfolios was up from $66 million in the same quarter last year and
$91 million in the previous quarter. Relative to the same period last year,
retail provisions for credit losses increased in line with portfolio growth,
as well as the impact of the acquisition of Scotia Dealer Advantage (formerly
Travelers Leasing). The second quarter of 2007 also benefited from recoveries

and reversals of commercial provisions no longer required. Compared to the
prior quarter, retail provisions were up modestly due mainly to volume growth
in Scotia Dealer Advantage. Commercial provisions increased slightly over the
prior quarter, related primarily to two accounts and increases in small
business banking.
	    International Banking's provision for credit losses was $60 million in
the second quarter, compared to $30 million in both the same period last year
and the prior quarter. The increase from the same quarter last year was due to
a combination of factors, including growth in retail assets, an increased
delinquency rate in Mexico and lower retail and commercial reversals of
provisions no longer required. On a quarter-over-quarter basis, retail
provisions increased modestly, while the prior quarter benefited from larger
recoveries and reversals of commercial provisions no longer required.
	    Total net impaired loans, after deducting the allowance for specific
credit losses, were $845 million as at April 30, 2008, an increase of
$156 million from last quarter. The general allowance for credit losses was
$1,323 million as at April 30, 2008, up $25 million due to the acquisition of
Banco del Desarrollo in Chile.

	    Market risk
	    Value at Risk (VaR) is a key measure of market risk in the Bank's trading
activities. In the second quarter, the average one-day VaR was $14.6 million
compared to $11.3 million for the same quarter last year. This was due
primarily to higher interest rate risk exposures, as well as greater
variability in interest rates. Compared to the first quarter, the average one-
day VaR declined from $16.6 million to $14.6 million. Reduced interest rate
and equity risk were partially offset by an increase in commodity risk.

	    <<
	                                          Average for the three months ended
	    -------------------------------------------------------------------------
	    Risk factor                               April 30 January 31   April 30
	    ($ millions)                                  2008       2008       2007
	    -------------------------------------------------------------------------
	    Interest rate                             $   12.8   $   13.8   $    7.2
	    Equities                                       3.0        4.5        5.2
	    Foreign exchange                               1.3        0.9        1.2
	    Commodities                                    3.6        2.7        1.5
	    Diversification                               (6.1)      (5.3)      (3.8)
	    -------------------------------------------------------------------------
	    All-Bank VaR                              $   14.6   $   16.6   $   11.3
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    >>

	    There were 21 trading loss days in the second quarter, compared to
13 days in the previous quarter. The increase in the number of loss days was a
reflection of higher credit spread and interest rate volatility during the
quarter. The losses were within the range predicted by VaR.

	    Liquidity risk
	    The Bank maintains large holdings of liquid assets to support its
operations. These assets generally can be sold or pledged to meet the Bank's
obligations. As at April 30, 2008, liquid assets were $112 billion or 25% of
total assets compared to $114 billion or 25% of total assets at January 31,
2008. These assets consist of securities, 70%, and other liquid assets
including cash and deposits with banks, 30% (January 31, 2008 - 67% and 33%,
respectively).
	    In the course of the Bank's day-to-day activities, securities and other
assets are pledged to secure an obligation, participate in clearing or
settlement systems, or operate in a foreign jurisdiction. Securities may also
be sold under repurchase agreements. As at April 30, 2008, total assets
pledged or sold under repurchase agreements were $69 billion, compared to
$73 billion at January 31, 2008. The quarter-over-quarter decrease was

attributable to lower levels of securities sold under repurchase agreements,
partially offset by an increase in assets pledged in respect of securities
lending transactions.

	    Related party transactions

	    There were no changes to the Bank's procedures and policies for related
party transactions from those outlined on pages 72 and 122 of the 2007 Annual
Report. All transactions with related parties continued to be at market terms
and conditions.

	    Balance sheet

	    The Bank's total assets as at April 30, 2008 were $453 billion, up
$41 billion or 10% from October 31, 2007, including a $13 billion impact from
foreign currency translation. Growth was widespread across most asset
categories, including retail, commercial and corporate lending. Compared to
the prior quarter, assets grew by $3 billion.
	    The Bank's loan portfolio grew $29 billion or 13% from October 31, 2007,
primarily in non-retail lending, including $6 billion from foreign currency
translation. On the retail lending side, domestic residential mortgage growth
was $5 billion, before securitization of $2 billion. The International
acquisition of Banco del Desarrollo in Chile contributed $1 billion to the
increase in mortgages. Personal loans were up $4 billion, with all regions
experiencing positive growth.
	    Business and government loans increased $19 billion from October 31,
2007, or $15 billion excluding the impact of foreign currency translation.
Loans in Scotia Capital were up $7 billion, on the corporate lending side, as
well as to support trading operations. In International Banking, business and
government loans increased $10 billion. The acquisition of Banco del
Desarrollo contributed $3 billion, and Asia and the Caribbean grew $4 billion
and $1 billion, respectively.
	    Securities increased by $8 billion from October 31, 2007. Available-for-
sale securities increased $6 billion, primarily in government and corporate
securities. Trading securities increased $2 billion. As at April 30, 2008, the
unrealized gains on available-for-sale securities were $555 million (after
related derivative and hedge amounts), down $300 million from last quarter,
due mainly to realized gains and a reduction in the value of certain debt
securities as credit spreads widened.
	    Total liabilities were $432 billion as at April 30, 2008, an increase of
$39 billion or 10% from October 31, 2007, including a $14 billion impact from
foreign currency translation.
	    Total deposits were up $34 billion from October 31, 2007, or 12%,
including a $9 billion impact due to foreign currency translation. Personal
deposits increased $9 billion, including $2 billion growth in domestic
personal GICs. Non-retail deposits, including bank, business and government
deposits, were up $25 billion, including the impact of foreign currency
translation of $8 billion. This increase was primarily to fund the Bank's
strong asset growth.
	    Total shareholders' equity rose $2 billion from October 31, 2007. The
increase was due primarily to internal capital generation of $846 million, the
issuance of $575 million non-cumulative preferred shares in the first
six months, and a $127 million increase in accumulated other comprehensive
income, due mainly to unrealized foreign exchange translation gains relating
to the Bank's foreign operations.

	    Capital management

	    Implementation of the revised Basel framework

	    The revised Basel Capital framework (Basel II) became effective for
Canadian banks on November 1, 2007. Basel II is designed to more closely align
regulatory capital requirements with the individual risk profile of banks by
introducing substantive changes to capital requirements for credit risk and an

explicit new capital charge for operational risk.
	    Under Basel II, there are two main methods for computing credit risk: the
standardized approach, which uses prescribed risk weights; and internal
ratings-based approaches, which allow the use of a bank's internal models to
calculate some, or all, of the key inputs into the regulatory capital
calculation. Users of the Advanced Internal Ratings Based Approach (AIRB) are
required to have sophisticated risk management systems for the calculation of
credit risk regulatory capital and application of this approach could result
in less regulatory capital than the use of the alternative approaches. Once
banks demonstrate full compliance with the AIRB requirements, and OSFI has
approved its use, they may proceed to apply the AIRB approach in computing
capital requirements. However, in order to limit sudden declines in the
capital levels for the industry in aggregate, transitional capital floors were
introduced for the first two years after full implementation of AIRB. A
minimum capital floor of 90% of the Basel I calculation will apply in the
first year of full approval, and 80% in the second year. In the second
quarter, the Bank received regulatory approval to move to the 90% floor.
	    The Bank received approval, with conditions, from OSFI to use AIRB for
material Canadian, U.S. and European portfolios effective November 1, 2007.
The remaining significant credit portfolios are targeted for implementation of
AIRB in November 2010. In the interim period, the Bank will use the
standardized approach for these portfolios. As well, the Bank is using the
standardized approach to calculate the operational risk capital requirements.
The capital requirements for Market Risk are substantially unchanged for the
Bank.

	    Capital ratios
	    The Bank continues to maintain a strong capital position. The Tier 1 and
the Total capital ratios as at April 30, 2008 under Basel II were 9.6% and
11.7%, respectively, compared to 9.0% and 10.2% at January 31, 2008.
	    The increase in the ratios from January 31, 2008, reflects the issuance
this quarter of $345 million of non-cumulative preferred shares and
$1.8 billion in subordinated debentures, as well as the impact of the Bank
moving to the 90% capital floor this quarter. Partly offsetting this were
slightly higher underlying risk-weighted assets, in line with organic growth
in assets and the goodwill recorded in the second quarter on the Bank's
acquisition of Banco del Desarrollo earlier this fiscal year.
	    The tangible common equity (TCE) ratio was 7.5% as at April 30, 2008,
compared to 7.2% at January 31, 2008.

	    Financial instruments

	    Given the nature of the Bank's main business activities, financial
instruments make up a substantial portion of the balance sheet and are
integral to the Bank's business. There are various measures that reflect the
level of risk associated with the Bank's portfolio of financial instruments.
Further discussion of some of these risk measures is included in the Risk
Management section above.
	    The methods of determining the fair value of financial instruments are
detailed on pages 69 to 70 of the 2007 Annual Report. Management's judgment on
valuation inputs is necessary when observable market data is not available,
and management applies judgment in the selection of valuation models.
Uncertainty in these estimates and judgments can affect fair value and
financial results recorded.
	    During this quarter, changes in the fair value of financial instruments
generally arose from existing economic, industry and market conditions.
	    Total derivative notional amounts were $1,473 billion at April 30, 2008,
compared to $1,287 billion at October 31, 2007, with the change occurring
across most derivative categories. The percentage of those derivatives held
for trading and those held for non-trading or asset liability management was
generally unchanged. The credit equivalent amount, after taking into account
master netting arrangements and eligible financial collateral, was
$25 billion, compared to $21 billion last year end.

	    Off-balance sheet arrangements

	    In the normal course of business, the Bank enters into contractual
arrangements that are not required to be consolidated in its financial
statements. These arrangements are primarily in three categories: Variable
Interest Entities (VIEs), securitizations, and guarantees and other
commitments. No material contractual obligations were entered into this
quarter by the Bank that are not in the ordinary course of business. Processes
for review and approval of these contractual arrangements are unchanged from
last year.

	    Multi-seller conduits sponsored by the Bank
	    The Bank sponsors three multi-seller conduits, two of which are Canadian-
based and one in the U.S. The Bank's primary exposure to these conduits is the
liquidity support provided, with total liquidity facilities of $18.2 billion
as at April 30, 2008. At quarter-end, the Bank held approximately 2% of the
total commercial paper issued by these conduits. The following table presents
a summary of the classes of assets held by the Bank's two Canadian multi-
seller conduits as of April 30, 2008:

	    <<
	    Canada
	                                                Funded   Unfunded      Total
	    As at April 30, 2008                        assets     commit-  exposure
	    ($ millions)                                            ments         (1)
	    -------------------------------------------------------------------------
	    Asset classes(2):
	    Auto loans/leases                         $  3,629   $    329   $  3,958
	    Trade receivables                              207         89        296
	    Residential mortgages                          102          2        104
	    Other                                        1,411        259      1,670
	    -------------------------------------------------------------------------
	    Total                                     $  5,349   $    679   $  6,028
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Exposure to the Bank is through global-style liquidity facilities and
	        letters of guarantee.
	    (2) These assets are substantially sourced from Canada.
	    >>

	    Substantially all of the conduits' assets have been structured to receive
credit enhancements from the sellers, including overcollateralization
protection or cash reserve accounts. Approximately 18% of the funded assets
are externally rated AA- or higher, and the balance of the funded assets have
an equivalent rating of AA- or higher based on the Bank's internal rating
program. There are no non-investment grade rated assets held in these
conduits. The weighted average life of the funded assets is approximately
1.1 years. There is no exposure to U.S. subprime mortgage risk in these
conduits.
	    The following table presents a summary of the classes of assets held by
the Bank's U.S. multi-seller conduit as of April 30, 2008:

	    <<
	    United States
	                                                Funded   Unfunded      Total
	    As at April 30, 2008                        assets     commit-  exposure
	    ($ millions)                                            ments         (1)
	    -------------------------------------------------------------------------
	    Asset classes(2):
	    Credit card/consumer receivables          $  1,012   $    675   $  1,687
	    Auto loans/leases                            2,836      1,108      3,944
	    Trade receivables                            1,552      1,585      3,137
	    Loans to closed-end mutual funds               634        835      1,469
	    CDOs/CLOs(3)                                   332          -        332

	    Other                                        1,122        522      1,644
	    -------------------------------------------------------------------------
	    Total                                     $  7,488   $  4,725   $ 12,213
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Exposure to the Bank is through program-wide credit enhancement
	        and global-style liquidity facilities.
	    (2) These assets are sourced from the U.S.
	    (3) These assets are externally rated AAA.
	    >>

	    A significant portion of the conduit's assets have been structured to
receive credit enhancements from the sellers, including overcollateralization
protection or cash reserve accounts. Approximately 22% of the funded assets
are externally rated A or higher, and 65% of the funded assets have an
equivalent rating of A or higher based on the Bank's internal rating program.
There are no non-investment grade rated assets held in this conduit. The
weighted average life of the funded assets is approximately 1.1 years.
Exposure to U.S. subprime mortgage risk is nominal.

	    Liquidity facilities provided to non-Bank sponsored conduits
	    For conduits not administered by the Bank, liquidity facilities totaled
$1.4 billion as at April 30, 2008, of which $1.3 billion were for U.S. third-
party conduits and $30 million were for Canadian third-party conduits. This
was down from $1.7 billion last quarter. The assets of these non-Bank
sponsored conduits, which are not administered by the Bank, are substantially
rated at or above A. The majority of the liquidity facilities have an original
committed term of 364 days, renewable at the option of the Bank. The weighted
average life of the underlying assets of these conduits is approximately two
years. Exposure to U.S. subprime mortgage risk is nominal.

	    Funding vehicles
	    The Bank uses special purpose entities (SPEs) to facilitate cost-
efficient financing of its own operations. The Bank has two such SPEs:
Scotiabank Capital Trust and Scotiabank Subordinated Notes Trust that are VIEs
and are not consolidated on the Bank's balance sheet, as the Bank is not the
primary beneficiary. The Scotiabank Trust Securities and Scotiabank Trust
Subordinated Notes issued by the Trusts are not reported on the Consolidated
Balance Sheet. The deposit notes issued by the Bank to Scotiabank Capital
Trust and Scotiabank Subordinated Notes Trust are reported in Deposits and
qualify as regulatory capital. Total deposits recorded by the Bank as at
April 30, 2008, were $3.3 billion. The Bank recorded interest expense of
$49 million on these deposits for the three months ended April 30, 2008.
Further details are available in Note 13 of the October 31, 2007 consolidated
financial statements presented in the 2007 Annual Report.

	    Other off-balance sheet arrangements
	    The Bank may securitize residential mortgages as a means to diversify its
funding sources, as this represents a cost-effective means to fund the growth
in this portfolio. A further $1.1 billion in residential mortgages were
securitized this quarter, bringing the balance of outstanding mortgages
securitized to $11.6 billion as at April 30, 2008, compared to $11.2 billion
as at January 31, 2008.
	    Guarantees and other indirect commitments increased 10% from October 31,
2007. Fees from guarantees and loan commitment arrangements recorded in other
income were $57 million for the three-month period ended April 30, 2008,
compared to $53 million for the same period a year ago.

	    Selected credit instruments

	    Mortgage-backed securities

	    Non-trading portfolio
	    Total mortgage-backed securities held as available-for-sale securities

represented approximately 1% of the Bank's total assets as at April 30, 2008.
The holdings as at April 30, 2008, were as follows:

	    <<
	    As at April 30, 2008                                            Carrying
	    ($ millions)                                                       value
	    -------------------------------------------------------------------------
	    Canadian NHA mortgage-backed securities(1)                      $  5,478
	    Commercial mortgage-backed securities                                116
	    Other residential mortgage-backed securities                          12
	    -------------------------------------------------------------------------
	    Total                                                           $  5,606
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Canada Mortgage and Housing Corporation provides a guarantee of
	        timely payment to NHA mortgage-backed security investors.

	    Exposure to U.S. subprime mortgage risk is nominal.

	    Trading portfolio
	    Total mortgage-backed securities held as trading securities represent less
than 0.1% of the Bank's total assets as at April 30, 2008. The holdings as at
April 30, 2008, were as follows:

	    As at April 30, 2008                                            Carrying
	    ($ millions)                                                       value
	    -------------------------------------------------------------------------
	    Canadian NHA mortgage-backed securities(1)                      $    389
	    Commercial mortgage-backed securities                                 44
	    -------------------------------------------------------------------------
	    Total                                                           $    433
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Canada Mortgage and Housing Corporation provides a guarantee of
	        timely payment to NHA mortgage-backed security investors.
	    >>

	    Montreal Accord Asset-Backed Commercial Paper (ABCP)
	    The Bank holds $144 million of Montreal Accord ABCP as available-for-sale
securities. This carrying value represents approximately 62% of par value. The
Bank values these securities based on current credit spreads for similar
structured asset type exposure and considers the nature of the underlying
assets. These securities are currently subject to a restructuring which, if
successful, will result in converting these holdings into longer-dated
securities. There were no net writedowns relating to ABCP recorded this
quarter.

	    Collateralized debt obligations and collateralized loan obligations

	    Non-trading portfolio
	    The Bank has collateralized debt obligation (CDO) and collateralized loan
obligation (CLO) investments in its non-trading portfolio which are classified
as available-for-sale securities. CDOs and CLOs generally achieve their
structured credit exposure either synthetically through the use of structured
credit derivatives, or by investing and holding corporate loans or bonds.
These investments are carried at fair value on the Bank's Consolidated Balance
Sheet. Changes in the fair value of cash-based CDOs/CLOs are reflected in
Other Comprehensive Income, unless there has been an other than temporary
decline in fair value which is recorded in net income. Changes in fair value
of synthetic CDOs/CLOs are reflected in net income. Substantially all of the
reference assets of the Bank's CDO and CLO investments are corporate exposures
with no U.S. subprime mortgage exposure. Substantially all of these
investments are investment grade, with a weighted average rating of AA. Over
70% of these investment holdings are senior tranches with subordination of 9%

or more. Only 8% of the investments are in equity tranches.
	    As at April 30, 2008, the fair value of the Bank's investments in CDOs
was $435 million. During the second quarter, the Bank recorded a pre-tax loss
of $51 million in net income and a pre-tax loss of $26 million in Other
Comprehensive Income, respectively, reflecting changes in the fair value of
the CDOs.
	    As at April 30, 2008, the fair value of the Bank's investments in CLOs
was $789 million. This portfolio is well diversified, as the average
individual CLO holding was $8 million. The reduction in fair value of the CLOs
recorded in Other Comprehensive Income during the second quarter was
$79 million pre-tax.
	    The cumulative unrealized loss recorded in Accumulated Other
Comprehensive Income for cash-based CDOs and CLOs was $158 million as at
April 30, 2008. Since these investments have not experienced a decline in
credit quality, and the Bank has the ability and intent to hold these
securities until there is a recovery of fair value, these unrealized losses
are considered temporary in nature.
	    A significant portion of the above movements in fair value relating to
CDOs and CLOs reflects changes in asset prices arising from liquidity
challenges and do not reflect a change in underlying credit quality.

	    Trading portfolio
	    The Bank also holds synthetic CDOs in its trading portfolio as a result
of structuring and managing transactions with clients and other financial
institutions. Total CDOs purchased and sold in the trading portfolio as at
April 30, 2008, were as follows:

	    <<
	    Outstanding as at April 30, 2008                                Positive/
	                                                         Notional  (negative)
	    ($ millions)                                           amount fair value
	    -------------------------------------------------------------------------
	    CDOs - sold protection                               $  5,887   $   (911)
	    CDOs - purchased protection                          $  5,136   $    710
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    >>

	    To hedge the net exposure, the Bank purchases from or sells CDOs to other
financial institutions, along with purchasing and/or selling index tranches or
single name credit default swaps (CDSs). Over 90% of these CDO exposures are
investment grade equivalent. Approximately 85% of the Bank's credit exposure
to CDO swap counter-parties are to entities which are externally or internally
rated the equivalent of A- or better, while the balance is fully cash
collateralized. These CDOs have no U.S. subprime exposures.

	    Structured Investment Vehicles
	    As at April 30, 2008, the fair value of the Bank's investments in
Structured Investment Vehicles (SIVs) was $20 million. The Bank does not
sponsor, manage or provide liquidity support to SIVs.

	    Exposure to monoline insurers
	    The Bank has insignificant direct exposure to monoline insurers. The Bank
has indirect exposures of $3.2 billion in the form of monoline guarantees
which provide enhancement to public finance and other transactions, where the
Bank has provided credit facilities to either the issuers of securities or
facilities which hold such securities.
	    The securities related to these facilities are primarily rated investment
grade without the guarantee, and represent risk the Bank would take without
the availability of the guarantee. In the second quarter, the Bank replaced
the credit default protection previously provided by an insurance monoline
with protection from another swap counterparty which resulted in a modest gain
being recorded in Other Income-Trading Revenues.

	    Leveraged loans
	    The Bank's exposure to highly leveraged loans awaiting to be syndicated
as at April 30, 2008 was nominal.

	    Common dividend

	    The Board of Directors, at its meeting on May 27, 2008, approved an
increase in the dividend of 2 cents per common share, for a quarterly dividend
of 49 cents per common share. The quarterly dividend applies to shareholders
of record as of July 2, 2008, and is payable July 29, 2008. The Bank continues
its track record of providing its shareholders with continued dividend growth.

	    Outlook

	    U.S. economic activity has weakened significantly. Even with the
aggressive easing of monetary policy since last summer and substantial fiscal
stimulus, the U.S. performance will likely be very subdued over the balance of
2008. Growth trends have begun to soften in Europe and Japan. The pace of
activity also is likely to moderate in China, India, Russia and a number of
Latin American countries, although these nations will continue to lead global
growth.
	    Canadian economic activity has been tempered by the weakening trend in
manufacturing exports, although robust demand and high prices for a broad
range of commodities have provided an important offset. Even with this support
and relatively sound domestic fundamentals, Canadian growth is likely to
moderate over the balance of the year.
	    Despite difficult markets, the Bank is on track to achieve three of its
four key financial and operational targets: ROE, productivity and maintaining
strong capital ratios. This is a reflection of the relative strength of the
Bank's businesses and strategies. However, the challenging global financial
markets continue to impact earnings and, as a result, it is unlikely that the
Bank will meet its earnings per share growth objective set at the end of last
year. At the same time, the rebound in earnings this quarter, the continued
solid asset growth in all three business lines and improved funding costs, all
point to a stronger second half in 2008.

	    Business Segment Review

	    <<
	    Domestic Banking
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)
	    ($ millions)
	    (Taxable
	     equivalent         April 30 January 31   April 30   April 30   April 30
	     basis)(1)              2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Business segment
	     income
	    Net interest
	     income             $  1,051   $    991   $    942   $  2,042   $  1,895
	    Provision for
	     credit losses           102         91         66        193        140
	    Other income             537        519        530      1,056      1,048
	    Non-interest
	     expenses                890        889        870      1,779      1,740
	    Provision for
	     income taxes            174        157        169        331        333
	    -------------------------------------------------------------------------
	    Net income          $    422   $    373   $    367   $    795   $    730
	    Preferred dividends
	     paid                      6          6          3         12          5

	    -------------------------------------------------------------------------
	    Net income available
	     to common
	     shareholders       $    416   $    367   $    364   $    783   $    725
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    -------------------------------------------------------------------------
	    Other measures
	    Return on equity(1)    35.3%      30.6%      32.0%      32.9%      31.6%
	    Average assets
	     ($ billions)       $    172   $    168   $    149   $    170   $    148
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Refer above for discussion of non-GAAP measures.
	    >>

	    Domestic Banking reported net income available to common shareholders of
$416 million this quarter, up a substantial $52 million or 14% from the second
quarter last year. Compared to the previous quarter, net income available to
common shareholders increased $49 million or 13%. The segment contributed 43%
of the Bank's total quarterly net income available to common shareholders.
Return on equity was 35.3% versus 32.0% in the same period last year.
	    Average assets before securitization rose $23 billion or 15% from the
second quarter last year, due largely to growth of $15 billion or 16% in
residential mortgages. Strong mortgage growth was recorded in all sales
channels, and resulted in increased market share. Personal revolving credit
and business lending volumes also increased. Personal deposit growth of
$8 billion or 11% led to industry-leading year-over-year market share gains.
Growth was recorded in term deposits as well as chequing and savings. The
latter increase was due mainly to the acquisition of Dundee Bank. Non-personal
deposits rose 7% from growth in both non-personal term and current accounts.
Compared to last quarter, average assets before securitization rose $4 billion
or 3% led by growth in retail mortgages and commercial lending. Deposits
increased 2% from growth in savings and term deposits.
	    Total revenue was up $116 million or 8% from the same period last year,
due mainly to higher net interest income driven by strong volume growth.
Quarter over quarter, total revenues rose by $78 million or 5% with increases
in both net interest income and other income.
	    Net interest income of $1,051 million was up $109 million or 12% from the
same quarter last year, due to strong volume growth in both assets and
deposits. Average volume growth was reported for most products in retail,
small business and commercial banking. The impact of this growth was partially
offset by a decrease in the interest margin resulting from increased wholesale
funding requirements and the impact of a higher percentage of relatively lower
risk, lower yielding mortgages. Compared to last quarter, net interest income
rose by 6% due mainly to a decline in short-term interest rates and an
increase in the spread between prime and funding costs resulting in an
increase in the margin of 14 basis points.
	    Other income was $537 million this quarter, in line with the same quarter
last year. Higher foreign exchange commissions, transactional service revenues
and card revenues were partially offset by a decline in wealth management
revenues. The latter arose mainly as a result of lower brokerage revenues due
to a decline in new issues and customer trading activity. This was partially
offset by higher private client revenues and an increase in mutual funds
reflecting market share gains. Compared to last quarter, other income rose by
3%, due mainly to net securities write downs recorded in the first quarter.
	    Credit losses of $102 million in the Domestic Banking portfolios were up
from both the $66 million in the same quarter last year and $91 million last
quarter. Compared to last year, retail provisions increased in line with
portfolio growth and the impact of acquiring Scotia Dealer Advantage (formerly
Travelers Leasing). Commercial provisions were higher as the second quarter of
2007 benefited from recoveries and reversals of commercial provisions no
longer required. Retail provisions were up moderately quarter over quarter due

mainly to volume growth in Scotia Dealer Advantage. Commercial provisions
increased slightly over last quarter, relating primarily to two accounts and
an increase in Small Business Banking.
	    Non-interest expenses increased by 2% from the second quarter last year
due in part to growth initiatives, normal salary increases, and the impact of
acquisitions. Partly offsetting these expenses were lower stock-based and
performance-based compensation. Non-interest expenses were flat quarter over
quarter, as increases in spending for growth initiatives and seasonally higher
expenses were offset by the impact of lower stock-based compensation and a
decline in salaries as a result of the shorter quarter.

	    <<
	    International Banking
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)
	    ($ millions)
	    (Taxable
	     equivalent         April 30 January 31   April 30   April 30   April 30
	     basis)(1)              2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Business segment
	     income
	    Net interest income $    797   $    731   $    679   $  1,528   $  1,349
	    Provision for credit
	     losses                   60         30         30         90         49
	    Other income             356        309        300        665        597
	    Non-interest
	     expenses                615        568        577      1,183      1,139
	    Provision for income
	     taxes                   107        122         44        229         87
	    Non-controlling
	     interest in net
	     income of
	     subsidiaries             36         31         31         67         56
	    -------------------------------------------------------------------------
	    Net income          $    335   $    289   $    297   $    624   $    615
	    Preferred dividends
	     paid                      9          7          4         16          6
	    -------------------------------------------------------------------------
	    Net income available
	     to common
	     shareholders       $    326   $    282   $    293   $    608   $    609
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    -------------------------------------------------------------------------
	    Other measures
	    Return on equity(1)    17.6%      19.6%      18.7%      18.5%      20.4%
	    Average assets
	     ($ billions)       $     79   $     70   $     69   $     74   $     67
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Refer above for discussion of non-GAAP measures.
	    >>

	    International Banking's net income available to common shareholders in
the second quarter was $326 million, an increase of $33 million or 11% from
last year, notwithstanding the $42 million negative impact of foreign currency
translation, and $44 million or 16% above last quarter. These increases
reflected strong volume growth throughout the division, the positive impact of
acquisitions and increased margins, partly offset by higher provisions for
retail loan losses in Mexico.

	    The segment accounted for 34% of the Bank's net income available to
common shareholders and had a return on equity of 17.6%.
	    Average asset volumes of $79 billion increased $10 billion or 14% from
last year, despite the 12% negative impact of foreign currency translation.
The underlying increase was a result of the acquisition in Chile, a 23% rise
in commercial loans, primarily in Asia, and robust growth in credit cards and
mortgages, up 33% and 24%, respectively. Organic growth in low-cost deposits
was also strong at 9%. Compared to last quarter, average assets increased
$9 billion or 13%, with 60% due to organic growth and 40% from acquisitions.
	    Total revenues were $1,153 million this quarter, an increase of
$174 million or 18% from the same period last year, including a $112 million
negative impact of foreign currency translation. Compared to last quarter,
revenues increased $113 million or 11%.
	    Net interest income was $797 million this quarter, up $118 million or 17%
from the same period last year, notwithstanding the negative foreign currency
translation impact of $79 million. Compared to last quarter, net interest
income increased $66 million or 9%. These increases were driven by very strong
organic loan and deposit growth across the division, as well as the impact of
acquisitions. Net interest margins were up slightly from last year, but were
below last quarter, due to net losses from derivatives used for
asset/liability management.
	    Other income increased $56 million or 19% year over year to $356 million,
despite the $33 million negative impact of foreign currency translation. This
growth resulted from acquisitions, higher gains on non-trading securities and
foreign exchange revenues in Latin America, as well as widespread transaction-
driven growth. Compared to last quarter, other income increased $47 million,
due to the positive impact of the change in fair value of certain non-trading
securities versus a negative impact last quarter, growth from acquisitions,
higher foreign exchange revenues and the positive impact of foreign currency
translation.
	    The provision for credit losses was $60 million in the second quarter,
compared to $30 million in both the same period last year and the prior
quarter. The increase from the same quarter last year was due to a combination
of factors, including growth in retail assets, an increased delinquency rate
in Mexico and lower retail and commercial reversals of provisions no longer
required. On a quarter-over-quarter basis, the increase was due primarily to
the prior period benefitting from larger recoveries and reversals of
commercial provisions no longer required. Retail provisions increased modestly
over the prior quarter.
	    Non-interest expenses were $615 million this quarter, up 7% or
$38 million from last year. This included a $50 million favourable impact of
foreign currency translation offset by a $32 million increase from
acquisitions. The remaining increase was due to ongoing business growth
initiatives and new branch openings, including higher compensation and
performance-based expenses in Mexico and Peru. Compared to last quarter,
expenses increased $47 million or 8%, due primarily to an unfavourable impact
of foreign exchange translation of $18 million and a $10 million increase from
acquisitions. The remaining 3% growth was due to higher expense recoveries in
Latin America in the last quarter, as well as increased advertising and
premises expenses.
	    The effective tax rate this quarter was 22.0%, compared to 11.9% in the
same period last year and 27.6% from last quarter. The increase from last year
was due to a higher effective tax rate in Mexico, as tax loss carryforwards
have been fully utilized. The decrease from last quarter was due primarily to
a higher effective rate in Mexico in the prior quarter, combined with higher
earnings in low-tax jurisdictions, mainly in Asia.

	    <<
	    Scotia Capital
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)
	    ($ millions)

	    (Taxable
	     equivalent         April 30 January 31   April 30   April 30   April 30
	     basis)(1)              2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Business segment
	     income
	    Net interest income $    246   $    274   $    296   $    520   $    565
	    Provision for
	     credit losses            (9)       (10)       (51)       (19)       (81)
	    Other income             292        131        360        423        721
	    Non-interest
	     expenses                243        191        262        434        521
	    Provision for income
	     taxes                    49         33        125         82        230
	    -------------------------------------------------------------------------
	    Net income          $    255   $    191   $    320   $    446   $    616
	    Preferred dividends
	     paid                      4          4          2          8          4
	    -------------------------------------------------------------------------
	    Net income available
	     to common
	     shareholders       $    251   $    187   $    318   $    438   $    612
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    -------------------------------------------------------------------------
	    Other measures
	    Return on equity(1)    29.6%      22.6%      33.4%      26.2%      32.0%
	    Average assets
	     ($ billions)       $    167   $    157    $   153   $    162   $    152
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Refer above for discussion of non-GAAP measures.
	    >>

	    Scotia Capital contributed net income available to common shareholders of
$251 million this quarter, a decrease of $67 million or 21% from the same
period last year, but up $64 million or 34% from last quarter. The decrease
compared to the prior year reflects high interest and loan loss recoveries
realized last year. The increase over last quarter was due to stronger trading
revenues, particularly in derivatives, and precious metals which had a record
quarter. Return on equity, while strong at 29.6%, was below the same period
last year, which was buoyed by interest and loan loss recoveries. Return on
equity this quarter was significantly higher than last quarter's performance.
Scotia Capital contributed 26% of the Bank's net income available to common
shareholders.
	    Total average assets increased 9% over last year to $167 billion. There
was an increase of $3 billion in trading securities and loans to support both
client-driven activities and trading opportunities. In addition, there was a
$7 billion or 25% increase in average corporate loans and acceptances across
all businesses, primarily from growth in investment grade loans. The increase
of $10 billion or 6% from the last quarter reflects growth in both trading and
corporate lending assets.
	    Total revenues of $538 million decreased $118 million or 18%, compared to
the second quarter last year. This was from a substantial decline in U.S.
Corporate Banking revenues due to interest recoveries on impaired loans
realized last year, and a loss on non-trading securities recognized in the
current quarter. There was also a modest reduction in Global Capital Markets
revenues. The $133 million or 33% improvement from last quarter was due to
significantly higher trading revenues in Global Capital Markets, which faced
challenging market conditions in the previous quarter.
	    Net interest income of $246 million decreased 17% from the same period
last year, due primarily to the high level of interest recoveries on impaired
loans realized last year. This was partially offset by strong corporate loan

growth in all regions and an improvement in lending margins in Canada and the
U.S. The decrease from the previous quarter was due primarily to lower
interest from trading operations, partially offset by corporate loan growth
and higher lending margins.
	    This quarter, net recoveries were $9 million compared to net recoveries
of $51 million in the same period last year and net recoveries of $10 million
last quarter. The net recoveries in the current quarter relate primarily to
recoveries and provision reversals in the Canadian and U.S. portfolios,
compared to net recoveries in the U.S. last year and Canada and Europe in the
previous quarter. There were no new provisions this quarter.
	    Other income was $292 million, a decrease of $68 million or 19% from the
same period last year. Global Corporate and Investment Banking declined
$62 million due primarily to the loss on non-trading securities which resulted
from acquiring a CDO asset under a liquidity asset purchase agreement in the
United States, and lower investment banking revenues. Global Capital Markets
decreased 3% as trading revenues in derivatives declined, substantially offset
by strong trading revenue growth in foreign exchange and precious metals.
Compared to last quarter, other income increased $161 million due primarily to
stronger trading revenues in Global Capital Markets.
	    Non-interest expenses were $243 million this quarter, a $19 million or 7%
decrease from the same period last year, due primarily to lower performance-
based compensation and support costs, offset by higher severance and computer
costs. Compared to last quarter, higher performance-based compensation,
severance costs and computer costs were partially offset by lower professional
fees and support costs.

	    <<
	    Other(1)
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)
	    ($ millions)
	    (Taxable
	     equivalent         April 30 January 31   April 30   April 30   April 30
	     basis)(2)              2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Business segment
	     income
	    Net interest
	     income(3)          $   (221)  $   (182)  $   (123)  $   (403)  $   (239)
	    Provision for
	     credit losses             -          -        (25)         -        (25)
	    Other income             114         66        118        180        275
	    Non-interest
	     expenses                 46         21         17         67         50
	    Provision for
	     income taxes(3)        (121)      (119)       (52)      (240)       (87)
	    -------------------------------------------------------------------------
	    Net income          $    (32)  $    (18)  $     55   $    (50)  $     98
	    Preferred dividends
	     paid                      3          4          2          7          4
	    -------------------------------------------------------------------------
	    Net income (loss)
	     available to
	     common
	     shareholders       $    (35)  $    (22)  $     53   $    (57)  $     94
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    -------------------------------------------------------------------------
	    Other measures
	    Average assets
	     ($ billions)       $     37   $     34   $     33   $     36   $     31

	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Includes all other smaller operating segments and corporate
	        adjustments, such as the elimination of the tax-exempt income gross-
	        up reported in net interest income and provision for income taxes,
	        differences in the actual amount of costs incurred and charged to the
	        operating segments, and the impact of securitizations.
	    (2) Refer above for a discussion of non-GAAP measures.
	    (3) Includes the elimination of the tax-exempt income gross-up reported
	        in net interest income and provision for income taxes for the
	        three months ended April 30, 2008 ($100), January 31, 2008 ($118),
	        and April 30, 2007 ($109), and for the six months ended April 30,
	        2008 ($218), and April 30, 2007 ($214), to arrive at the amounts
	        reported in the Consolidated Statement of Income.
	    >>

	    Net income available to common shareholders was negative $35 million in
the second quarter, compared to negative $22 million in the previous quarter
and positive $53 million in the same quarter last year.
	    Net interest income and the provision for income taxes include the
elimination of tax-exempt income gross up. This amount is included in the
operating segments, which are reported on a taxable equivalent basis. The
elimination was $100 million this quarter, compared to $118 million in the
prior quarter and $109 million in the same period last year.
	    Total revenue this quarter was negative $107 million, down $102 million
from last year and up $9 million from last quarter. Compared to last year, net
interest income declined $98 million as a result of the negative impact of
changes in the fair value of derivatives used for asset/liability management
and higher wholesale funding costs. On a quarter-over-quarter basis, net
interest income declined $39 million, due mainly to lower funding profits.
	    Other income of $114 million was largely unchanged from last year, and
increased $48 million compared to the prior quarter. The quarter-over-quarter
growth reflected higher gains on non-trading securities, mainly from write-
downs on certain structured credit instruments recorded in the first quarter
and higher securitization revenues.
	    Non-interest expenses were $46 million this quarter, an increase of
$29 million from last year and $25 million from last quarter. These increases
were due largely to higher legal costs in the current quarter.

	    <<
	    Total
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)         April 30 January 31   April 30   April 30   April 30
	    ($ millions)            2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Business segment
	     income
	    Net interest income $  1,873   $  1,814   $  1,794   $  3,687   $  3,570
	    Provision for credit
	     losses                  153        111         20        264         83
	    Other income           1,299      1,025      1,308      2,324      2,641
	    Non-interest
	     expenses              1,794      1,669      1,726      3,463      3,450
	    Provision for income
	     taxes                   209        193        286        402        563
	    Non-controlling
	     interest in net
	     income of
	     subsidiaries             36         31         31         67         56
	    -------------------------------------------------------------------------
	    Net income          $    980   $    835   $  1,039   $  1,815   $  2,059
	    Preferred dividends

	     paid                     22         21         11         43         19
	    -------------------------------------------------------------------------
	    Net income available
	     to common
	     shareholders       $    958   $    814   $  1,028   $  1,772   $  2,040
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    -------------------------------------------------------------------------
	    Other measures
	    Return on equity(1)    21.4%      18.3%    22.4%(2)     20.0%    22.4%(2)
	    Average assets
	     ($ billions)       $    455   $    429   $    404   $    442   $    398
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Refer above for a discussion of non-GAAP measures.
	    (2) Certain comparative amounts in this quarterly report have been
	        restated to conform with current period presentation.


	    Geographic Highlights
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	                        April 30 January 31   April 30   April 30   April 30
	    (Unaudited)             2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Net income available
	     to common
	     shareholders
	    ($ millions)
	    Canada              $    552   $    494   $    561   $  1,046   $  1,105
	    United States             61         22        139         83        302
	    Mexico                    75         63        124        138        271
	    Other international      348        252        211        600        423
	    Corporate
	     adjustments             (78)       (17)        (7)       (95)       (61)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	                        $    958   $    814   $  1,028   $  1,772   $  2,040
	    -------------------------------------------------------------------------
	    Average assets
	     ($ billions)
	    Canada              $    293   $    285   $    256   $    289   $    254
	    United States             29         29         32         29         33
	    Mexico                    20         20         22         20         22
	    Other international      102         86         85         94         81
	    Corporate
	     adjustments              11          9          9         10          8
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	                        $    455   $    429   $    404   $    442   $    398
	    -------------------------------------------------------------------------


	    Quarterly Financial Highlights

	                                   For the three months ended
	    -------------------------------------------------------------------------
	                      April    Jan.   Oct.  July  April    Jan.   Oct.  July
	                         30     31     31     31     30     31     31     31
	                       2008   2008   2007   2007   2007   2007   2006   2006
	    -------------------------------------------------------------------------
	    Total revenue

	     ($ millions)    $3,172 $2,839 $3,078 $3,201 $3,102 $3,109 $2,868 $2,889
	    Total revenue
	     (TEB(1))
	     ($ millions)     3,272  2,957  3,294  3,302  3,211  3,214  2,999  2,989
	    Net income
	     ($ millions)       980    835    954  1,032  1,039  1,020    897    936
	    Basic earnings
	     per share($)      0.97   0.83   0.95   1.03   1.04   1.02   0.90   0.94
	    Diluted earnings
	     per share($)      0.97   0.82   0.95   1.02   1.03   1.01   0.89   0.93
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Refer above for a discussion of non-GAAP measures.



	    Share Data
	                                                                       As at
	    -------------------------------------------------------------------------
	                                                                    April 30
	    (thousands of shares outstanding)                                   2008
	    -------------------------------------------------------------------------
	    Common shares                                                  986,905(1)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Preferred shares Series 12                                      12,000(2)
	    Preferred shares Series 13                                      12,000(3)
	    Preferred shares Series 14                                      13,800(4)
	    Preferred shares Series 15                                      13,800(5)
	    Preferred shares Series 16                                      13,800(6)
	    Preferred shares Series 17                                       9,200(7)
	    Preferred shares Series 18                                      13,800(8)
	    -------------------------------------------------------------------------
	    Series 2000-1 trust securities issued by BNS Capital Trust         500(9)
	    Series 2002-1 trust securities issued by Scotiabank Capital
	     Trust                                                            750(10)
	    Series 2003-1 trust securities issued by Scotiabank Capital
	     Trust                                                            750(10)
	    Series 2006-1 trust securities issued by Scotiabank Capital
	     Trust                                                            750(10)
	    -------------------------------------------------------------------------
	    Scotiabank Trust Subordinated Notes - Series A issued by
	     Scotiabank Subordinated Notes Trust                            1,000(10)
	    -------------------------------------------------------------------------
	    Outstanding options granted under the Stock Option Plans to
	     purchase common shares                                     26,972(1)(11)
	    -------------------------------------------------------------------------
	    (1)  As at May 15, 2008, the number of outstanding common shares and
	         options were 987,652 and 26,224, respectively. The number of other
	         securities disclosed in this table were unchanged.
	    (2)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.328125 per share.
	    (3)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.30 per share.
	    (4)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.28125 per share.
	    (5)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.28125 per share.
	    (6)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.328125 per share
	         except for the initial dividend paid on January 28, 2008, which was
	         in an amount of $0.39195 per share.
	    (7)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly in an amount of $0.35 per share except

	         for the initial dividend paid on April 28, 2008, in an amount of
	         $0.33753 per share.
	    (8)  These shares are entitled to non-cumulative preferential cash
	         dividends payable quarterly. The initial dividend, if and when
	         declared, will be payable on July 29, 2008, in an amount of
	         $0.4315 per share. Dividends, if and when declared, during the
	         initial five year period ending on April 25, 2013, will be payable
	         in an amount of $0.3125 per share. Subsequent to the initial five-
	         year period ending April 25, 2013, and resetting every five years
	         thereafter, the dividends will be determined by the sum of the
	         five year Government of Canada yield and 2.05%, multiplied by
	         $25.00.
	    (9)  Reported in capital instrument liabilities in the Consolidated
	         Balance Sheet.
	    (10) Reported in deposits in the Consolidated Balance Sheet.
	    (11) Included are 17,586 stock options with tandem stock appreciation
	         right (SAR) features.
	    >>

	    Further details, including convertibility features, are available in
Notes 13, 14 and 16 of the October 31, 2007, consolidated financial statements
presented in the 2007 Annual Report, and Note 5 further below of this report.

	    -------------------------------------------------------------------------
	    Accounting Policies and Estimates

	    The interim consolidated financial statements have been prepared in
accordance with Canadian Generally Accepted Accounting Principles (GAAP). See
Note 1 to the 2007 annual consolidated financial statements for more
information about the significant accounting principles used to prepare the
financial statements. There were no new significant accounting policies
adopted by the Bank during the second quarter of 2008.
	    The key assumptions and bases for estimates that management has made
under GAAP, and their impact on the amounts reported in the interim
consolidated financial statements and notes, remain substantially unchanged
from those described in our 2007 Annual Report.
	    -------------------------------------------------------------------------

	    <<
	    Consolidated Statement of Income
	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	    (Unaudited)         April 30 January 31   April 30   April 30   April 30
	    ($ millions)            2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Interest income
	    Loans               $  3,798   $  3,825   $  3,404   $  7,623   $  6,781
	    Securities             1,200      1,168      1,286      2,368      2,417
	    Securities purchased
	     under resale
	     agreements              204        229        283        433        613
	    Deposits with banks      260        319        266        579        517
	    -------------------------------------------------------------------------
	                           5,462      5,541      5,239     11,003     10,328
	    -------------------------------------------------------------------------
	    Interest expenses
	    Deposits               2,948      3,078      2,600      6,026      5,126
	    Subordinated
	     debentures               36         24         30         60         63
	    Capital instrument
	     liabilities               9          9         13         18         26
	    Other                    596        616        802      1,212      1,543

	    -------------------------------------------------------------------------
	                           3,589      3,727      3,445      7,316      6,758
	    -------------------------------------------------------------------------
	    Net interest income    1,873      1,814      1,794      3,687      3,570
	    Provision for credit
	     losses (Note 3)         153        111         20        264         83
	    -------------------------------------------------------------------------
	    Net interest income
	     after provision for
	     credit losses         1,720      1,703      1,774      3,423      3,487
	    -------------------------------------------------------------------------
	    Other income
	    Card revenues             93         95         89        188        182
	    Deposit and payment
	     services                208        207        199        415        405
	    Mutual funds              78         78         73        156        141
	    Investment management,
	     brokerage and trust
	     services                189        186        195        375        383
	    Credit fees              140        133        129        273        261
	    Trading revenues         123        (44)       151         79        300
	    Investment banking       170        164        195        334        389
	    Net gain on securities,
	     other than trading       59         20         79         79        206
	    Other                    239        186        198        425        374
	    -------------------------------------------------------------------------
	                           1,299      1,025      1,308      2,324      2,641
	    -------------------------------------------------------------------------
	    Net interest and other
	     income                3,019      2,728      3,082      5,747      6,128
	    -------------------------------------------------------------------------
	    Non-interest expenses
	    Salaries and employee
	     benefits              1,005        978      1,004      1,983      2,007
	    Premises and
	     technology              359        327        329        686        656
	    Communications            80         75         75        155        148
	    Advertising and
	     business development     78         69         70        147        146
	    Professional              68         45         48        113         93
	    Business and capital
	     taxes                    38         14         34         52         73
	    Other                    166        161        166        327        327
	    -------------------------------------------------------------------------
	                           1,794      1,669      1,726      3,463      3,450
	    -------------------------------------------------------------------------
	    Income before the
	     undernoted            1,225      1,059      1,356      2,284      2,678
	    Provision for income
	     taxes                   209        193        286        402        563
	    Non-controlling
	     interest in net
	     income of
	     subsidiaries             36         31         31         67         56
	    -------------------------------------------------------------------------
	    Net income          $    980   $    835   $  1,039   $  1,815   $  2,059
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Preferred dividends
	     paid                     22         21         11         43         19
	    -------------------------------------------------------------------------
	    Net income
	     available to
	     common
	     shareholders       $    958   $    814   $  1,028   $  1,772   $  2,040

	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Average number of
	     common shares
	     outstanding
	     (millions):
	      Basic                  986        985        992        985        992
	      Diluted                992        992      1,001        992      1,001
	    -------------------------------------------------------------------------
	    Earnings per
	     common share
	     (in dollars):
	      Basic             $   0.97   $   0.83   $   1.04   $   1.80   $   2.06
	      Diluted           $   0.97   $   0.82   $   1.03   $   1.79   $   2.04
	    -------------------------------------------------------------------------
	    Dividends per common
	     share (in dollars) $   0.47   $   0.47   $   0.42   $   0.94   $   0.84
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Certain comparative amounts have been reclassified to conform with
	    current period presentation.

	    The accompanying notes are an integral part of these interim consolidated
	    financial statements.



	    Consolidated Balance Sheet
	                                                    As at
	    -------------------------------------------------------------------------
	                                   April 30 January 31 October 31   April 30
	    (Unaudited) ($ millions)           2008       2008       2007       2007
	    -------------------------------------------------------------------------
	    Assets
	    Cash resources
	    Cash and non-interest-bearing
	     deposits with banks           $  2,641   $  2,816   $  2,138   $  2,532
	    Interest-bearing deposits with
	     banks                           26,178     29,431     23,011     23,967
	    Precious metals                   3,668      4,164      4,046      4,623
	    -------------------------------------------------------------------------
	                                     32,487     36,411     29,195     31,122
	    -------------------------------------------------------------------------
	    Securities
	    Trading                          62,138     60,702     59,685     71,547
	    Available-for-sale               34,322     32,992     28,426     28,474
	    Equity accounted investments        802        788        724        153
	    -------------------------------------------------------------------------
	                                     97,262     94,482     88,835    100,174
	    -------------------------------------------------------------------------
	    Securities purchased under
	     resale agreements               15,323     20,362     22,542     25,867
	    -------------------------------------------------------------------------
	    Loans
	    Residential mortgages           108,382    105,532    102,154     94,706
	    Personal and credit cards        45,273     43,513     41,734     40,408
	    Business and government         104,928    101,389     85,500     83,424
	    -------------------------------------------------------------------------
	                                    258,583    250,434    229,388    218,538
	    Allowance for credit losses
	     (Note 3)                         2,490      2,451      2,241      2,505
	    -------------------------------------------------------------------------
	                                    256,093    247,983    227,147    216,033
	    -------------------------------------------------------------------------

	    Other
	    Customers' liability under
	     acceptances                     11,782     12,518     11,538     10,277
	    Derivative instruments           25,638     25,217     21,960     16,186
	    Land, buildings and equipment     2,506      2,460      2,271      2,308
	    Goodwill                          2,162      1,266      1,134      1,176
	    Other intangible assets             263        273        273        301
	    Other assets                      9,057      8,450      6,615      8,266
	    -------------------------------------------------------------------------
	                                     51,408     50,184     43,791     38,514
	    -------------------------------------------------------------------------
	                                   $452,573   $449,422   $411,510   $411,710
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Liabilities and shareholders'
	     equity
	    Deposits
	    Personal                       $109,994   $108,219   $100,823   $ 97,218
	    Business and government         176,878    175,772    161,229    157,919
	    Banks                            35,566     32,806     26,406     36,466
	    -------------------------------------------------------------------------
	                                    322,438    316,797    288,458    291,603
	    -------------------------------------------------------------------------
	    Other
	    Acceptances                      11,782     12,518     11,538     10,277
	    Obligations related to
	     securities sold under
	     repurchase agreements           27,446     32,967     28,137     29,577
	    Obligations related to
	     securities sold short           15,028     13,570     16,039     21,521
	    Derivative instruments           24,010     25,046     24,689     14,167
	    Other liabilities                26,412     25,333     21,138     21,023
	    Non-controlling interest in
	     subsidiaries                       588        548        497        496
	    -------------------------------------------------------------------------
	                                    105,266    109,982    102,038     97,061
	    -------------------------------------------------------------------------
	    Subordinated debentures
	     (Note 4)                         3,946      2,150      1,710      2,301
	    -------------------------------------------------------------------------
	    Capital instrument liabilities      500        500        500        750
	    -------------------------------------------------------------------------
	    Shareholders' equity
	    Capital stock
	      Preferred shares (Note 5)       2,210      1,865      1,635      1,290
	      Common shares and contributed
	       surplus                        3,643      3,614      3,566      3,539
	    Retained earnings                18,300     17,809     17,460     16,763
	    Accumulated other comprehensive
	     income (loss) (Note 6)          (3,730)    (3,295)    (3,857)    (1,597)
	    -------------------------------------------------------------------------
	                                     20,423     19,993     18,804     19,995
	    -------------------------------------------------------------------------
	                                   $452,573   $449,422   $411,510   $411,710
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Certain comparative amounts have been reclassified to conform with
	    current period presentation.

	    The accompanying notes are an integral part of these interim consolidated
	    financial statements.


	    Consolidated Statement of Changes in Shareholders' Equity

	                                                    For the six months ended
	    -------------------------------------------------------------------------
	                                                         April 30   April 30
	    (Unaudited) ($ millions)                                 2008       2007
	    -------------------------------------------------------------------------
	    Preferred shares
	    Balance at beginning of period                       $  1,635   $    600
	    Issued                                                    575        690
	    -------------------------------------------------------------------------
	    Balance at end of period                                2,210      1,290
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Common shares
	    Balance at beginning of period                          3,566      3,425
	    Issued                                                     77        130
	    Purchased for cancellation                                  -        (16)
	    -------------------------------------------------------------------------
	    Balance at end of period                                3,643      3,539
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Retained earnings
	    Balance at beginning of period                         17,460     15,843
	    Cumulative effect of adopting new accounting policies       -     (61)(1)
	    -------------------------------------------------------------------------
	                                                           17,460     15,782
	    Net income                                              1,815      2,059
	    Dividends:   Preferred                                    (43)       (19)
	                 Common                                      (926)      (833)
	    Purchase of shares                                          -       (218)
	    Other                                                      (6)        (8)
	    -------------------------------------------------------------------------
	    Balance at end of period                               18,300     16,763
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Accumulated other comprehensive income (loss)
	    Balance at beginning of period                         (3,857)    (2,321)
	    Cumulative effect of adopting new accounting policies       -      683(1)
	    Other comprehensive income                                127         41
	    -------------------------------------------------------------------------
	    Balance at end of period                               (3,730)    (1,597)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Total shareholders' equity at end of period          $ 20,423   $ 19,995
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	    Consolidated Statement of Comprehensive Income

	                                               For the               For the
	                                    three months ended      six months ended
	    -------------------------------------------------------------------------
	                                   April 30   April 30   April 30   April 30
	    (Unaudited) ($ millions)           2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Comprehensive income
	    Net income                     $    980   $  1,039   $  1,815   $  2,059
	    -------------------------------------------------------------------------
	    Other comprehensive income
	     (loss), net of income taxes
	     (Note 6):
	      Net change in unrealized
	       foreign currency translation

	       losses                           (85)      (588)       800        (66)
	      Net change in unrealized
	       gains on available-for-sale
	       securities                      (210)        17       (270)        65
	      Net change in gains (losses)
	       on derivative instruments
	       designated as cash flow
	       hedges                          (140)        20       (403)        42
	    -------------------------------------------------------------------------

	    Other comprehensive income
	     (loss)                            (435)      (551)       127         41
	    -------------------------------------------------------------------------

	    Comprehensive income           $    545   $    488   $  1,942   $  2,100
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Certain comparative amounts have been reclassified to conform with
	    current period presentation.

	    (1) Refer to Note 1 for discussion of new accounting policies related to
	        financial instruments adopted in the first quarter of 2007.

	    The accompanying notes are an integral part of these interim consolidated
	    financial statements.


	    Condensed Consolidated Statement of Cash Flows

	                                               For the               For the
	                                    three months ended      six months ended
	    -------------------------------------------------------------------------
	    Sources (uses) of cash flows   April 30   April 30   April 30   April 30
	    (Unaudited) ($ millions)           2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Cash flows from operating
	     activities
	    Net income                     $    980   $  1,039   $  1,815   $  2,059
	    Adjustments to determine net
	     cash flows from (used in)
	     operating activities               (23)        85        216         36
	    Net accrued interest
	     receivable and payable             (11)      (115)       233          3
	    Trading securities               (1,200)    (8,139)    (1,531)    (9,331)
	    Derivative assets                   242     (4,618)      (885)    (4,437)
	    Derivative liabilities           (1,666)     2,667     (3,408)     1,489
	    Other, net                          648     (2,227)     1,502     (2,389)
	    -------------------------------------------------------------------------

	                                     (1,030)   (11,308)    (2,058)   (12,570)
	    -------------------------------------------------------------------------
	    Cash flows from financing
	     activities
	    Deposits                          4,007     21,175     21,337     28,582
	    Obligations related to
	     securities sold under
	     repurchase agreements           (5,841)       574     (1,612)    (4,062)
	    Obligations related to
	     securities sold short            1,430      3,699     (1,336)     8,349
	    Preferred shares issued             345        345        575        690
	    Common shares issued                 27         20         63         85
	    Common shares redeemed/
	     purchased for cancellation           -       (234)         -       (234)
	    Subordinated debentures issued    1,800          -      2,194          -

	    Cash dividends paid                (485)      (428)      (969)      (852)
	    Other, net                         (477)     1,834        949      2,757
	    -------------------------------------------------------------------------
	                                        806     26,985     21,201     35,315
	    -------------------------------------------------------------------------
	    Cash flows from investing
	     activities
	    Interest-bearing deposits with
	     banks                            3,558     (4,665)    (1,621)    (6,202)
	    Securities purchased under
	     resale agreements                5,150     (1,872)     7,687       (296)
	    Loans, excluding
	     securitizations                 (8,823)    (8,482)   (22,333)   (16,231)
	    Loan securitizations              1,142        595      1,692      1,443
	    Securities, other than trading,
	     net                               (869)    (1,061)    (2,904)      (895)
	    Land, buildings and equipment,
	     net of disposals                   (90)       (44)      (185)      (164)
	    Other, net(1)                       (35)       (37)    (1,081)      (119)
	    -------------------------------------------------------------------------
	                                         33    (15,566)   (18,745)   (22,464)
	    -------------------------------------------------------------------------
	    Effect of exchange rate changes
	     on cash and cash equivalents        16        (87)       105        (29)
	    -------------------------------------------------------------------------
	    Net change in cash and cash
	     equivalents                       (175)        24        503        252
	    Cash and cash equivalents at
	     beginning of period              2,816      2,508      2,138      2,280
	    -------------------------------------------------------------------------
	    Cash and cash equivalents at
	     end of period(2)              $  2,641   $  2,532   $  2,641   $  2,532
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    Cash disbursements made for:
	      Interest                     $  3,571   $  3,452   $  7,224   $  7,246
	      Income taxes                 $    423   $    333   $    754   $    616
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Certain comparative amounts have been reclassified to conform with
	    current period presentation.

	    (1) For the three and six months ended April 30, 2008, comprises
	        investments in subsidiaries, net of cash and cash equivalents at the
	        date of acquisition of $2 and $37, respectively (April 30, 2007 - nil
	        and $3, respectively), and net of non-cash consideration of common
	        shares issued from treasury of nil and nil, respectively (April 30,
	        2007 - $11 and $15, respectively).
	    (2) Represents cash and non-interest-bearing deposits with banks.

	    The accompanying notes are an integral part of these interim consolidated
	    financial statements.


	    Notes to the Interim Consolidated Financial Statements (Unaudited)

	    These interim consolidated financial statements have been prepared in
accordance with Canadian Generally Accepted Accounting Principles (GAAP). They
should be read in conjunction with the consolidated financial statements for
the year ended October 31, 2007. The significant accounting policies used in
the preparation of these interim consolidated financial statements are
consistent with those used in the Bank's year-end audited consolidated
financial statements.

	    1.  Changes in accounting policies

	        There were no new accounting policies adopted in the current fiscal
	        year. Note 1 to the Bank's 2007 annual audited consolidated financial
	        statements describes accounting policy changes.

	    2.  Sales of loans through securitizations

	        The Bank securitizes residential mortgages through the creation of
	        mortgage-backed securities. No credit losses are expected, as the
	        mortgages are insured. For the quarter ended April 30, 2008, the key
	        weighted-average assumptions used to measure the fair value at the
	        dates of securitization were a prepayment rate of 20%, an excess
	        spread of 1.5% and a discount rate of 3.5%. The following table
	        summarizes the Bank's sales:

	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	                        April 30 January 31   April 30   April 30   April 30
	    ($ millions)            2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Net cash
	     proceeds(1)        $  1,142   $    550   $    595   $  1,692   $  1,443
	    Retained interest         37         16         17         53         49
	    Retained servicing
	     liability                (6)        (4)        (4)       (10)       (11)
	    -------------------------------------------------------------------------
	                           1,173        562        608      1,735      1,481
	    Residential
	     mortgages
	     securitized           1,142        555        605      1,697      1,466
	    -------------------------------------------------------------------------
	    Net gain (loss)
	     on sale            $     31   $      7   $      3   $     38   $     15
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Excludes insured mortgages which were securitized and retained by the
	        Bank of $555 for the three months ended April 30, 2008
	        (January 31, 2008 - $1,351; April 30, 2007 - $182), and $1,906 for
	        the six months ended April 30, 2008 (April 30, 2007 - $708). As at
	        April 30, 2008, the outstanding balance of mortgage-backed securities
	        was $5,276, and these assets have been classified as available-for-
	        sale securities.

	    3.  Impaired loans and allowance for credit losses

	    (a) Impaired loans
	                                                           As at
	    -------------------------------------------------------------------------
	                                              April 30 January 31 October 31
	                                                  2008       2008       2007
	    -------------------------------------------------------------------------
	                                   Specific
	    ($ millions)           Gross  allowance(1)     Net        Net        Net
	    -------------------------------------------------------------------------
	    By loan type:
	      Residential
	       mortgages        $    419   $    182   $    237   $    300   $    203
	      Personal and
	       credit cards          689        521        168         21         51
	      Business and
	       government            904        464        440        368        347

	    -------------------------------------------------------------------------
	    Total               $  2,012   $  1,167   $    845   $    689   $    601
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    By geography:
	      Canada                                  $    309   $    280   $    231
	      United States                                  4         10          4
	      Other International                          532        399        366
	    -------------------------------------------------------------------------
	    Total                                     $    845   $    689   $    601
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) The specific allowance for impaired loans evaluated on an individual
	        basis totalled $464 (January 31, 2008 - $494; October 31, 2007 -
	        $383).


	    (b) Allowance for credit losses

	        The following table summarizes the change in the allowance for credit
	        losses.


	                                                                     For the
	                            For the three months ended      six months ended
	    -------------------------------------------------------------------------
	                        April 30 January 31   April 30   April 30   April 30
	    ($ millions)            2008       2008       2007       2008       2007
	    -------------------------------------------------------------------------
	    Balance at
	     beginning of
	     period             $  2,462   $  2,252   $  2,631   $  2,252   $  2,618
	    Write offs              (190)      (194)      (136)      (384)      (304)
	    Recoveries                51         51         64        102         98
	    Provision for
	     credit losses           153        111       20(4)       264         83
	    Other, including
	     foreign exchange
	     adjustment               22        242        (63)       264         21
	    -------------------------------------------------------------------------
	    Balance at the end
	     of period(1)(2)(3) $  2,498   $  2,462   $  2,516   $  2,498   $  2,516
	    -------------------------------------------------------------------------
	    (1) As at April 30, 2008, includes $149 of specific allowance and $25 of
	        general allowances relating to acquisition of a new subsidiary
	        (January 31, 2008 - $177 and nil, respectively; April 30, 2007 - $27
	        and $16, respectively), which may change as the valuation of the
	        acquired loan assets is finalized.
	    (2) As at April 30, 2008, $8 has been recorded in other liabilities
	        (January 31, 2008 - $11; April 30, 2007 - $11).
	    (3) As at April 30, 2008, the general allowance for credit losses was
	        $1,323 (January 31, 2008 - $1,298; April 30, 2007 - $1,298).
	    (4) Net of reduction in general allowance of $25.


	    4.  Subordinated debentures

	        Subordinated debentures totaling $300 million were issued on
	        January 31, 2008, and will mature on January 31, 2018. Interest is
	        payable semi-annually in arrears, commencing on July 31, 2008, at
	        5.30% per annum until January 31, 2013. From January 31, 2013, until
	        maturity, interest is payable at an annual rate equal to the 90-day
	        Bankers' Acceptance Rate plus 1.90%, payable quarterly commencing
	        April 30, 2013. The subordinated debentures are redeemable by the

	        Bank at any time, subject to written approval of the Superintendent
	        of Financial Institutions Canada. The subordinated debentures qualify
	        as Tier 2B capital.

	        Subordinated debentures totaling (Yen)10 billion were issued on
	        November 20, 2007, and will mature on November 20, 2037. Interest is
	        payable semi-annually in arrears, commencing on May 20, 2008, at an
	        annual rate of 3.015%. The subordinated debentures are redeemable by
	        the Bank on November 20, 2017, with the prior written approval of the
	        Superintendent of Financial Institutions Canada. The subordinated
	        debentures qualify as Tier 2B capital.

	        Subordinated debentures totaling $1,700 million were issued on
	        March 27, 2008, and will mature on March 27, 2018. Interest is
	        payable semi-annually in arrears, commencing on September 29, 2008,
	        at 4.99% per annum up until March 27, 2013. From March 27, 2013,
	        until maturity, interest is payable at an annual rate equal to the
	        90-day Bankers' Acceptance Rate plus 2.00%, payable quarterly in
	        arrears commencing on June 27, 2013. The subordinated notes are
	        redeemable by the Bank at any time, subject to written approval of
	        the Superintendent of Financial Institutions Canada. The subordinated
	        debentures qualify as Tier 2B capital.

	        Subordinated debentures totalling (Yen)10 billion were issued on
	        April 9, 2008, and will mature on April 9, 2038. Interest is payable
	        semi-annually in arrears, commencing on October 9, 2008, at an annual
	        interest rate of 3.37%. The subordinated debentures are redeemable by
	        the Bank on April 9, 2018, with the prior written approval of the
	        Superintendent of Financial Institutions Canada. The subordinated
	        debentures qualify as Tier 2B capital.

	    5.  Capital management

	        The Bank has a capital management process in place to measure, deploy
	        and monitor its available capital and assess its adequacy. This
	        capital management process aims to achieve three major objectives:
	        exceed regulatory thresholds and meet longer-term internal capital
	        targets, maintain strong credit ratings and provide the Bank's
	        shareholders with acceptable returns.

	        Capital is managed in accordance with the Board-approved Capital
	        Management Policy. Senior executive management develop the capital
	        strategy and oversee the capital management processes of the Bank.
	        The Bank's Finance, Group Treasury and Global Risk Management (GRM)
	        groups are key in implementing the Bank's capital strategy and
	        managing capital. Capital is managed using both regulatory capital
	        measures and internal metrics.

	        Although the Bank is subject to several capital regulations in the
	        different business lines and countries in which the Bank operates,
	        capital adequacy is managed on a consolidated Bank basis. The Bank
	        also takes measures to ensure its subsidiaries meet or exceed local
	        regulatory capital requirements. The primary regulator of its
	        consolidated capital adequacy is the Office of the Superintendent of
	        Financial Institutions Canada (OSFI). The capital adequacy
	        regulations in Canada are largely consistent with international
	        standards set by the Bank for International Settlements. A revised
	        Basel Capital Framework (Basel II) was adopted by the Bank and other
	        Canadian banks effective this fiscal year.

	        Effective November 1, 2007, regulatory capital ratios are determined
	        in accordance with the revised capital framework, based on the
	        International Convergence of Capital Measurement and Capital
	        Standards: A Revised Framework, commonly known as Basel II. Changes

	        to the computation of regulatory capital from the previous framework
	        (Basel I) are primarily the amount and categorization of prescribed
	        inclusions and deductions from capital, such as the calculation of
	        the eligible allowance deduction and the deduction for specified
	        corporations (such as insurance entities and associated
	        corporations), which is now split between two categories of capital.
	        In addition, the computation of risk-weighted assets was revised to
	        more closely align risk weight parameters with the individual risk
	        profile of banks by introducing substantive changes to prescribed
	        risk weights for credit risk exposures, including the use of
	        internally derived credit risk parameters, and introducing an
	        explicit new risk weight for operational risk. Capital requirements
	        for market risk were generally unchanged.

	        Once banks demonstrate full compliance with the AIRB requirements,
	        and OSFI has approved its use, they may proceed to apply the AIRB
	        approach in computing capital requirements. However, in order to
	        limit sudden declines in the capital levels for the industry in
	        aggregate, capital floors were introduced for the first two years
	        after full implementation of AIRB. A capital floor of 90% of the
	        Basel I calculation will apply in the first year of full approval and
	        80% in the second year, if required. In the second quarter, the Bank
	        received regulatory approval to move to the 90% floor.

	        The Bank received approval, with conditions, from OSFI to use AIRB
	        for material Canadian, U.S. and European portfolios effective
	        November 1, 2007. The remaining credit portfolios are targeted to
	        implement AIRB in November 2010. In the interim period, the Bank will
	        use the standardized approach for these portfolios. As well, the Bank
	        is using the standardized approach to calculate the operational risk
	        capital requirements.

	        Total regulatory capital is composed of Tier 1 and Tier 2 capital as
	        follows:

	                                                           As at
	        ---------------------------------------------------------------------
	                                              April 30 January 31 October 31
	        (unaudited) ($ millions)                  2008       2008     2007(1)
	        ---------------------------------------------------------------------
	        Shareholders' equity per Consolidated
	         Balance Sheet                        $ 20,423   $ 19,993   $ 18,804
	        Add:  Capital instrument liabilities
	               - trust securities                2,750      2,750      2,750
	              Non-controlling interest in
	               subsidiaries                        588        548        497
	        Less: Goodwill                          (2,162)    (1,266)    (1,134)
	              Components of accumulated other
	               comprehensive income excluded
	               from Tier 1 capital                 (19)      (369)      (692)
	              Other capital deductions(2)         (507)      (490)         -
	        ---------------------------------------------------------------------
	        Tier 1 capital                        $ 21,073   $ 21,166   $ 20,225
	        ---------------------------------------------------------------------
	        Qualifying subordinated debentures,
	         net of amortization                     3,659      1,859      1,452
	        Capital instrument liabilities
	         - trust subordinated notes              1,000      1,000      1,000
	        Other net capital items(3)                (144)      (151)       304
	        ---------------------------------------------------------------------
	        Tier 2 capital                        $  4,515   $  2,708   $  2,756
	        ---------------------------------------------------------------------
	        Total regulatory capital              $ 25,588   $ 23,874   $ 22,981
	        ---------------------------------------------------------------------

	        ---------------------------------------------------------------------
	        (1)  Effective November 1, 2007, regulatory capital is determined in
	             accordance with Basel  II. The comparative amounts as at
	             October 31, 2007 were determined in accordance with Basel I.
	        (2)  Comprised primarily of 50% of investments in certain specified
	             corporations acquired after January 1, 2007. Prior to
	             November 1, 2007, 100% of investments in certain specified
	             corporations was deducted from Tier 2 capital; commencing
	             November 1, 2007, those acquired after January 1, 2007, are now
	             split 50:50 between Tier 1 and Tier 2.
	        (3)  Comprised mainly of eligible allowance for credit losses and net
	             after-tax unrealized gain on available-for-sale securities less
	             prescribed deductions including investments in specified
	             corporations.


	        The two primary regulatory capital ratios used to assess capital
	        adequacy are Tier 1 and Total capital ratios, which are determined by
	        dividing those capital components by risk-weighted assets. Risk-
	        weighted assets are computed by applying a combination of the Bank's
	        internal credit risk parameters and OSFI prescribed risk weights to
	        on-and off-balance sheet exposures.

	        The regulatory minimum ratios prescribed by OSFI are 7% for Tier 1
	        capital and 10% for Total capital. The Bank exceeded these minimum
	        ratio thresholds as at April 30, 2008, and January 31, 2008. OSFI has
	        also prescribed an asset-to-capital leverage maximum of 20:1. The
	        Bank was in compliance with this threshold as at April 30, 2008, and
	        January 31, 2008.

	        Significant capital transactions

	        In the first quarter of 2007, the Bank initiated a normal course
	        issuer bid to purchase up to 20 million of the Bank's common shares.
	        This represented approximately 2% of the Bank's common shares
	        outstanding as at December 31, 2007. The bid terminated on
	        January 11, 2008. The Bank did not purchase any common shares
	        pursuant to this bid during the first quarter.

	        Series 17 non-cumulative preferred shares totaling $230 million were
	        issued on January 31, 2008, and are entitled to non-cumulative
	        preferential cash dividends payable quarterly, if and when declared,
	        in an amount per share of $0.35. The initial dividend, paid on
	        April 28, 2008, was $0.33753 per share. With regulatory approval, the
	        shares may be redeemed by the Bank on or after April 26, 2013, at
	        $26.00 per share, together with declared and unpaid dividends to the
	        date then fixed for redemption, and thereafter at annually declining
	        premiums until April 26, 2017, following which no redemption premium
	        is payable. These preferred shares qualify as Tier 1 capital.

	        Series 18 non-cumulative 5-year rate reset preferred shares totaling
	        $300 million and $45 million were issued on March 25, 2008, and
	        March 27, 2008, respectively. Holders are entitled to receive fixed
	        non-cumulative preferential cash dividends payable quarterly, if and
	        when declared, in an amount of $0.3125 per share for the initial
	        five-year fixed rate period ending on April 25, 2013. The initial
	        dividend, if and when declared, will be payable on July 29, 2008, and
	        will be $0.4315 per share. Subsequent to the initial five-year fixed
	        rate period, and resetting every five years thereafter, the dividends
	        will be determined by the sum of the 5-year Government of Canada
	        yield and 2.05%, multiplied by $25.00. Holders of Series 18 preferred
	        shares have the option to convert their shares into an equal number
	        of Series 19 non-cumulative floating rate preferred shares on April
	        26, 2013, and on April 26 every five years thereafter. Series 19

	        preferred shares are entitled to receive floating rate non-cumulative
	        preferential cash dividends, if and when declared, in an amount per
	        share equal to the sum of the T-bill rate and 2.05%, multiplied by
	        $25.00. If the Bank determines that, after giving effect to any
	        Election Notices received, there would be less than 1,000,000
	        Series 18 preferred shares issued and outstanding on the applicable
	        Series 18 Conversion Date, all of the issued and outstanding
	        Series 18 preferred shares will automatically be converted on such
	        Series 18 Conversion Date into an equal number of Series 19 preferred
	        shares. With prior written approval of the Superintendent of
	        Financial Institutions Canada, Series 18 preferred shares and, if
	        applicable, Series 19 preferred shares, are redeemable by the Bank.
	        These shares are redeemable at $25.00 per share on April 26, 2018,
	        and every 5 years thereafter. On all other dates beginning April 26,
	        2013, Series 19 preferred shares are redeemable at $25.00 per share
	        plus a redemption premium of $0.50 per share. These preferred shares
	        qualify as Tier 1 capital.

	    6.  Accumulated other comprehensive income (loss)

	        The components of accumulated other comprehensive income (loss) as at
	        April 30, 2008, and other comprehensive income (loss) for the six
	        months then ended were as follows:

	    Accumulated other comprehensive income (loss)

	                                          As at and for the six months ended
	    -------------------------------------------------------------------------
	                                           Opening          Net       Ending
	                                           balance       change      balance
	                                       --------------------------------------
	                                        October 31                  April 30
	    ($ millions)                              2007                      2008
	    -------------------------------------------------------------------------
	    Unrealized foreign
	     currency translation
	     gains (losses), net
	     of hedging activities              $   (4,549)  $      800   $(3,749)(1)
	    Unrealized gains
	     (losses) on available-
	     for-sale securities,
	     net of hedging
	     activities                                639         (270)       369(2)
	    Gains (losses) on
	     derivative instruments
	     designated as
	     cash flow hedges                           53         (403)     (350)(3)
	    -------------------------------------------------------------------------
	    Accumulated other
	     comprehensive
	     income (loss)                      $   (3,857)  $      127   $   (3,730)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	                                          As at and for the six months ended
	    -------------------------------------------------------------------------
	                              Opening   Transition          Net       Ending
	                              balance       amount       change      balance
	                          ---------------------------------------------------
	                           October 31   November 1                  April 30
	    ($ millions)                 2006         2006                      2007
	    -------------------------------------------------------------------------
	    Unrealized foreign

	     currency translation
	     gains (losses), net
	     of hedging activities $   (2,321)  $        -   $      (66)  $(2,387)(1)
	    Unrealized gains
	     (losses) on available-
	     for-sale securities,
	     net of hedging
	     activities                     -          706           65        771(2)
	    Gains (losses) on
	     derivative instruments
	     designated as
	     cash flow hedges               -          (23)          42         19(3)
	    -------------------------------------------------------------------------
	    Accumulated other
	     comprehensive
	     income (loss)         $   (2,321)  $      683   $       41   $   (1,597)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    (1) Net of income tax expense of $574 (April 30, 2007 -  nil).
	    (2) Net of income tax expense of $186 (April 30, 2007 - $427). Also, the
	        net unrealized gain as at April 30, 2008 includes unrealized losses
	        of $417 (April 30, 2007 - $147) after tax on the available-for-sale
	        securities.
	    (3) Net of income tax benefit of $163 (April 30, 2007 -  expense of $8).


	        Other comprehensive income (loss)

	        The following table summarizes the changes in the components of other
	        comprehensive income (loss).

	                                               For the               For the
	                                    three months ended      six months ended
	        ---------------------------------------------------------------------
	                                   April 30   April 30   April 30   April 30
	        ($ millions)                   2008       2007       2008       2007
	        ---------------------------------------------------------------------
	        Net change in unrealized
	         foreign currency
	         translation losses
	        Net unrealized foreign
	         currency translation
	         gains (losses)(1)         $    182   $ (1,009)  $  1,323   $   (117)
	        Net gains (losses) on
	         hedges of net investments
	         in self-sustaining foreign
	         operations(2)                 (267)       421       (523)        51
	        ---------------------------------------------------------------------
	                                        (85)      (588)       800        (66)
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        Net change in unrealized
	         gains on available-for-
	         sale securities
	        Net unrealized gains
	         (losses) on available-
	         for-sale securities(3)        (151)        70       (143)       141
	        Reclassification of net
	         gains to net income(4)         (59)       (53)      (127)       (76)
	        ---------------------------------------------------------------------
	                                       (210)        17       (270)        65
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        Net change in gains (losses)

	         on derivative instruments
	         designated as cash flow
	         hedges
	        Net gains (losses) on
	         derivative instruments
	         designated as cash flow
	         hedges(5)                       22       (113)       300        134
	        Reclassification of net
	         (gains) losses to net
	         income(6)                     (162)       133       (703)       (92)
	        ---------------------------------------------------------------------
	                                       (140)        20       (403)        42
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        Other comprehensive income $   (435)  $   (551)  $    127   $     41
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        (1)  For the three and six months ended April 30, 2008, net of income
	             tax expense of nil (April 30, 2007 - nil).
	        (2)  For the three and six months ended April 30, 2008, net of income
	             tax expense of $241 and $147, respectively. (April 30, 2007 -
	             nil and nil, respectively).
	        (3)  For the three and six months ended April 30, 2008, net of income
	             tax benefit of $58 and $104, respectively (April 30, 2007 -
	             expense of $36 and $82, respectively).
	        (4)  For the three and six months ended April 30, 2008, net of income
	             tax expense of $32 and $48, respectively (April 30, 2007 - $23
	             and $37, respectively).
	        (5)  For the three and six months ended April 30, 2008, net of income
	             tax expense of $12 and $138, respectively (April 30, 2007 -
	             benefit of $58 and expense of $67, respectively).
	        (6)  For the three and six months ended April 30, 2008, net of income
	             tax expense of $75 and $326, respectively (April 30, 2007 -
	             benefit of $67 and expense of $46, respectively).


	    7.  Financial instruments

	        Financial risk management

	        The Bank's principal business activities result in a balance sheet
	        that consists primarily of financial instruments. In addition, the
	        Bank uses derivative financial instruments for both trading and
	        asset/liability management purposes. The principal financial risks
	        that arise from transacting financial instruments include credit
	        risk, liquidity risk and market risk. The Bank has a comprehensive
	        risk management framework to monitor, evaluate and manage these
	        risks. This risk management framework has four main components, as
	        follows:

	        -  extensive risk management policies define the Bank's risk
	           appetite, set the limits and controls within which the Bank and
	           its subsidiaries can operate, and reflect the requirements of
	           regulatory authorities. These policies are approved by the Bank's
	           Board of Directors, either directly or through the Executive and
	           Risk Committee, (the Board);

	        -  guidelines are developed to clarify risk limits and conditions
	           under which the Bank's risk policies are implemented;

	        -  processes are implemented to identify, evaluate, document, report
	           and control risk. Standards define the breadth and quality of
	           information required to make a decision; and

	        -  compliance with risk policies, limits and guidelines is measured,
	           monitored and reported to ensure consistency against defined
	           goals.

	        Credit risk

	        Credit risk is the risk of loss resulting from the failure of a
	        borrower or counterparty to honour its financial or contractual
	        obligations to the Bank. The Bank's credit risk strategy and credit
	        risk policy are developed by Global Risk Management (GRM) and are
	        reviewed and approved by the Board on an annual basis. The credit
	        risk strategy defines target markets and risk tolerances that are
	        developed at an all-Bank level, and then further refined at the
	        business line level. The objectives of the credit risk strategy are
	        to ensure that, for the Bank, including the individual business
	        lines:

	        -  target markets and product offerings are well defined;

	        -  the risk parameters for new underwritings and for the portfolios
	           as a whole are clearly specified; and

	        -  transactions, including origination, syndication, loan sales and
	           hedging, are managed in a manner to ensure the goals for the
	           overall portfolio are met.

	        The credit risk policy sets out, among other things, the credit risk
	        rating systems and associated parameter estimates, the delegation of
	        authority for granting credit, the calculation of the allowance for
	        credit losses and the authorization of writeoffs. It forms an
	        integral part of enterprise-wide policies and procedures that
	        encompass governance, risk management and control structure.

	        The Bank's credit risk rating systems are designed to support the
	        determination of key credit risk parameter estimates which measure
	        credit and transaction risk. For non-retail exposures, parameters are
	        associated with each credit facility through the assignment of
	        borrower and transaction ratings. Borrower risk is evaluated using
	        methodologies that are specific to particular industry sectors and/or
	        business lines. The risk associated with facilities of a given
	        borrower is assessed by considering the facilities' structural and
	        collateral-related elements. For retail portfolios, each exposure has
	        been assigned to a particular pool (real estate secured, other retail
	        - term lending, unsecured revolving) and within each pool to a risk
	        grade. This process provides for a meaningful differentiation of
	        risk, and allows for appropriate and consistent estimation of loss
	        characteristics at the pool and risk grade level.

	        Credit quality of financial assets

	        The Bank's non-retail portfolio is well diversified by industry, and
	        there has not been a significant change in concentrations of credit
	        risk since October 31, 2007.

	        The Bank's retail portfolios consist of a number of relatively small
	        loans to a large number of borrowers. The portfolios are distributed
	        across Canada and a wide range of countries. As such, the portfolios
	        inherently have a high degree of diversification.

	        (a) Corporate and commercial

	        Credit decisions are made based upon an assessment of the credit risk
	        of the individual borrower or counterparty.

	        Key factors considered in the assessment include: the borrower's
	        management; the borrower's current and projected financial results
	        and credit statistics; the industry in which the borrower operates;
	        economic trends; and geopolitical risk. Banking units and GRM also
	        review the credit quality of the credit portfolio across the
	        organization on a regular basis to assess whether economic trends or
	        specific events may affect the performance of the portfolio.

	        As at April 30, 2008, a significant portion of the authorized
	        corporate and commercial lending portfolio was internally rated at a
	        rating that would generally equate to an investment grade rating by
	        external rating agencies.

	        (b) Retail

	        The Bank's credit underwriting methodology and risk modeling in
	        Canada is customer rather than product focused. Generally, decisions
	        on consumer loans are based on risk ratings, which are generated
	        using predictive scoring models. Individual credit requests are
	        processed by proprietary adjudication software designed to calculate
	        the maximum debt for which a customer qualifies.

	        As at April 30, 2008, the amount of retail loans that were past due
	        but not impaired was not significant.

	        Derivative instruments

	        To control credit risk associated with derivatives, the Bank uses the
	        same credit risk management activities and procedures that are used
	        in the lending business in assessing and adjudicating potential
	        credit exposure. The Bank applies limits to each counterparty,
	        measures exposure as the current fair value plus potential future
	        exposure, and uses credit mitigation techniques, such as netting and
	        collateralization. Investment grade counter-parties account for a
	        significant portion of the credit risk exposure arising from the
	        Bank's derivative transactions as at April 30, 2008.

	        Derivative instruments used by the Bank include credit derivatives in
	        its investment and loan portfolios: credit protection is sold as an
	        alternative to acquire exposure to bond or loan assets, while credit
	        protection is bought to manage or mitigate credit exposures.

	        Collateral

	        (a) Collateral held

	        In the normal course of business, the Bank receives collateral on
	        certain transactions to reduce its exposure to counterparty credit
	        risk. The Bank is normally permitted to sell or repledge the
	        collateral it receives under terms that are common and customary to
	        standard derivative, securities borrowing and lending, and other
	        lending activities.

	        (b) Collateral pledged

	        In the normal course of business, securities and other assets are
	        pledged to secure an obligation, participate in clearing or
	        settlement systems, or operate in a foreign jurisdiction. As at
	        April 30, 2008, total assets pledged were $46 billion (January 31,
	        2008 -$40 billion; October 31, 2007 - $40 billion). Asset pledging
	        transactions are conducted under terms that are common and customary
	        to standard derivative, securities borrowing and lending, and other
	        lending activities. Standard risk management controls are applied
	        with respect to asset pledging.

	        Liquidity risk

	        Liquidity risk is the risk that the Bank is unable to meet its
	        financial obligations in a timely manner at reasonable prices. The
	        Bank's liquidity risk is subject to extensive risk management
	        controls and is managed within the framework of policies and limits
	        approved by the Board. The Board receives reports on risk exposures
	        and performance against approved limits. The Liability Committee
	        (LCO) provides senior management oversight of liquidity risk through
	        its weekly meetings.

	        The key elements of the Bank's liquidity risk management framework
	        include:

	        -  liquidity risk measurement and management limits, including limits
	           on maximum net cash outflow by currency over specified short-term
	           horizons;

	        -  prudent diversification of its wholesale funding activities by
	           using a number of different funding programs to access the global
	           financial markets and manage its maturity profile, as appropriate;

	        -  large holdings of liquid assets to support its operations, (see
	           table below) which can generally be sold or pledged to meet the
	           Bank's obligations;

	        -  liquidity stress testing, including Bank-specific, Canada-
	           systemic, and global-systemic scenarios; and

	        -  liquidity contingency planning.


	        Liquid Assets
	                                             --------------------------------
	                                                                       As at
	                                                                    April 30
	                                                                        2008
	        ---------------------------------------------------------------------
	                                              Canadian    Foreign
	        ($ millions)                            dollar   currency      Total
	        ---------------------------------------------------------------------
	        Cash and deposits with the Bank
	         of Canada                            $    687   $  4,248   $  4,935
	        Deposits with other banks                5,436     22,116     27,552
	        Securities                              52,452     25,912     78,364
	        Call and short loans                         -      1,025      1,025
	        ---------------------------------------------------------------------
	                                              $ 58,575   $ 53,301   $111,876
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        Liquid assets as a % of total assets                           24.7%
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------

	        Contractual maturities

	        The table below shows the contractual maturities of certain of the
	        Bank's financial liabilities as at April 30, 2008. The Bank's deposit
	        liabilities shown below are those recorded in Canada and the United
	        States, which amounted to $241 billion, representing 75% of the
	        Bank's total deposits.

	                                           Payable on a fixed date

	                                         ---------------------------
	                                                            Greater
	                        Payable  Payable     Less   One to     than
	                             on    after     than     five     five
	        ($ millions)     demand   notice one year    years    years    Total
	        ---------------------------------------------------------------------
	        Deposits       $ 26,097 $ 42,127 $112,595 $ 52,850 $  7,733 $241,402
	        Subordinated
	         debentures           -        -      252        -    3,694    3,946
	        Capital
	         instrument
	         liabilities          -        -        -        -      500      500
	        ---------------------------------------------------------------------
	        Total          $ 26,097 $ 42,127 $112,847 $ 52,850 $ 11,927 $245,848
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------

	        Deposits

	        The Bank's foreign operations have liquidity management frameworks
	        that are similar to the Bank's framework. Local deposits are managed
	        from a liquidity risk perspective based on the local management
	        frameworks and regulatory requirements.

	        Commitments to extend credit

	        In the normal course of business, the Bank enters into commitments to
	        extend credit in the form of loans or other financings for specific
	        amounts and maturities, subject to specific conditions. These
	        commitments, which are not reflected on the Consolidated Balance
	        Sheet, are subject to normal credit standards, financial controls and
	        monitoring procedures. As at April 30, 2008, the majority of
	        commitments to extend credit had a remaining term to maturity of less
	        than one year.

	        Derivative instruments

	        The Bank is subject to liquidity risk relating to its use of
	        derivatives to meet customer needs, generate revenues from trading
	        activities, manage market and credit risks arising from its lending,
	        funding and investment activities, and lower its cost of capital. As
	        at April 30, 2008, more than half of the notional value of the Bank's
	        derivative instruments mature within one year, while 86% mature
	        within five years.

	        Market risk

	        Market risk arises from changes in market prices and rates (including
	        interest rates, credit spreads, equity prices, foreign exchange rates
	        and commodity prices), the correlations among them, and their levels
	        of volatility. Market risk is subject to extensive risk management
	        controls, and is managed within the framework of market risk policies
	        and limits approved by the Board. The LCO and Market Risk Management
	        and Policy Committee oversee the application of the framework set by
	        the Board, and monitor the Bank's market risk exposures and the
	        activities that give rise to these exposures.

	        The Bank uses a variety of metrics and models to measure and control
	        market risk exposures. The measurements used are selected based on an
	        assessment of the nature of risks in a particular activity. The
	        principal measurement techniques are Value at Risk (VaR), stress
	        testing, sensitivity analysis and simulation modeling, and gap
	        analysis. The Board reviews results from these metrics quarterly.
	        Models are independently validated prior to implementation and are

	        subject to formal periodic review.

	        VaR is a statistical measure that estimates the potential loss in
	        value of the Bank's trading positions due to adverse market movements
	        over a defined time horizon with a specified confidence level (see
	        Trading portfolio risk management below). The quality of the
	        Bank's VaR is validated by regular back testing analysis, in which
	        the VaR is compared to theoretical and actual profit and loss
	        results. To complement VaR, the Bank also uses stress testing to
	        examine the impact that abnormally large swings in market factors and
	        periods of prolonged inactivity might have on trading portfolios. The
	        stress testing program is designed to identify key risks and ensure
	        that the Bank's capital can easily absorb potential losses from
	        abnormal events. The Bank subjects its trading portfolios to more
	        than 75 stress tests on a daily basis, and more than 250 stress tests
	        on a monthly basis.

	        Sensitivity analysis assesses the effect of changes in interest rates
	        on current earnings and on the economic value of assets and
	        liabilities. Simulation modeling under various scenarios is
	        particularly important for managing risk in the deposit, lending and
	        investment products the Bank offers to its retail customers. Gap
	        analysis is used to assess the interest rate sensitivity of the
	        Bank's retail, wholesale banking and international operations. Under
	        gap analysis, interest rate-sensitive assets, liabilities and
	        derivative instruments are assigned to defined time periods, on the
	        earlier of contractual repricing or maturity dates on the basis of
	        expected repricing dates.

	        Interest rate risk

	        Interest rate risk, inclusive of credit spread risk, is the risk of
	        loss due to the following: changes in the level, slope and curvature
	        of the yield curve; the volatility of interest rates; mortgage
	        prepayment rates; changes in the market price of credit; and the
	        creditworthiness of a particular issuer. The Bank actively manages
	        its interest rate exposures with the objective of enhancing net
	        interest income within established risk tolerances. Interest rate
	        risk arising from the Bank's funding and investment activities is
	        managed in accordance with Board-approved policies and global limits,
	        which are designed to control the risk to income and economic value
	        of shareholders' equity. The income limit measures the effect of a
	        specified shift in interest rates on the Bank's annual net income,
	        while the economic value limit measures the impact of a specified
	        change in interest rates on the present value of the Bank's net
	        assets. Interest rate exposures in individual currencies are also
	        controlled by gap limits.

	        Based on the Bank's interest rate positions as at April 30, 2008, the
	        following table shows the potential after-tax impact on the Bank's
	        net income over the next twelve months and economic value of
	        shareholders' equity of an immediate and sustained 100 basis point
	        increase and decrease in interest rates across all currencies.

	        Interest rate sensitivity
	        ---------------------------------------------------------------------
	                                                                    Economic
	        ($ millions)                                                value of
	                                                       Net income     equity
	        ---------------------------------------------------------------------
	        100 bp increase                                  $    107   $   (259)
	        ---------------------------------------------------------------------
	        100 bp decrease                                  $    (99)  $    233
	        ---------------------------------------------------------------------

	        Foreign currency risk

	        Foreign currency risk is the risk of loss due to changes in spot and
	        forward rates, and the volatility of currency exchange rates. The
	        Bank's exposure to its net investments in self-sustaining foreign
	        operations is controlled by a Board-approved limit. This limit
	        considers potential volatility to shareholders' equity as well as the
	        potential impact on capital ratios from foreign exchange
	        fluctuations. On a quarterly basis, the LCO reviews the Bank's
	        exposures to these net investments. The Bank may fully or partially
	        hedge this exposure by funding the investments in the same currency,
	        or by using other financial instruments, including derivatives.

	        The Bank is subject to foreign currency risk on the earnings of its
	        foreign operations. To manage this risk, foreign currency revenues
	        and expenses, which are primarily denominated in U.S. dollars, are
	        projected over a number of future fiscal quarters. The LCO assesses
	        economic data and forecasts to decide on the portion of the estimated
	        future foreign currency revenues and expenses to hedge. Hedging
	        instruments normally include foreign currency spot and forward
	        contracts, as well as foreign currency options and swaps.

	        As at April 30, 2008, a one per cent increase (decrease) in the
	        Canadian dollar against all currencies in which the Bank operates
	        decreases (increases) the Bank's before-tax annual earnings by
	        approximately $34 million in the absence of hedging activity,
	        primarily from exposure to U.S. dollars. A similar change in the
	        Canadian dollar would increase (decrease) the unrealized foreign
	        currency translation losses in the accumulated other comprehensive
	        income section of shareholders' equity by approximately $153 million
	        as at April 30, 2008, net of hedging.

	        Equity risk

	        Equity risk is the risk of loss due to adverse movements in equity
	        prices. Equity price risk is often classified into two categories:
	        general equity risk, which refers to the sensitivity of an instrument
	        or portfolio's value to changes in the overall level of equity
	        prices, and specific equity risk, which refers to that portion of an
	        individual equity instrument's price volatility that is determined by
	        entity-specific characteristics.

	        The Bank is exposed to equity risk through its equity investment
	        portfolios, which are controlled by Board-approved portfolio, VaR,
	        and stress-test limits. Equity investments include common and
	        preferred shares, as well as a diversified portfolio of third-party
	        managed funds.

	        The majority of the Bank's equity investment portfolios are managed
	        by Group Treasury under the strategic direction of the LCO. Group
	        Treasury delegates the management of a portion of equity and equity-
	        related portfolios to Scotia Cassels Investment Counsel Limited and
	        other external fund managers to take advantage of these fund
	        managers' expertise in particular market niches and products.

	        The fair value of available-for-sale equity securities was
	        $3,231 million as at April 30, 2008.

	        Trading portfolio risk management

	        The Bank's policies, processes and controls for trading activities
	        are designed to achieve a balance between pursuing profitable trading
	        opportunities and managing earnings volatility within a framework of

	        sound and prudent practices. Trading activities are primarily
	        customer focused, but also include a proprietary component.

	        Market risk arising from the Bank's trading activities is managed in
	        accordance with Board-approved policies and limits, including
	        aggregate VaR and stress testing limits.

	        Trading portfolios are marked to market in accordance with the Bank's
	        valuation policies. Positions are marked to market daily and
	        valuations are independently reviewed by back office or GRM units on
	        a regular basis. These units also provide profit and loss reporting,
	        as well as VaR and limit compliance reporting to business unit
	        management and executive management for evaluation and action as
	        appropriate. VaR is calculated daily using a 99% confidence level, a
	        one-day holding period and historical simulations based on 300 days
	        of market data. This means that, on average, the trading book may
	        lose more than the VaR about once every 100 days.

	        The table below shows the Bank's VaR by risk factor:

	                                         One-day VaR by risk factor
	        ---------------------------------------------------------------------
	                                      As at     For the three months ended
	                                   April 30,          April 30, 2008
	        ($ millions)                   2008    Average       High        Low
	        ---------------------------------------------------------------------
	        Interest rate                  14.0       12.8       17.7        9.7
	        Equities                        2.9        3.0        4.3        2.1
	        Foreign exchange                1.5        1.3        2.1        0.4
	        Commodities                     2.8        3.6        4.7        2.7
	        Diversification                (4.7)      (6.1)       n/a        n/a
	        ---------------------------------------------------------------------
	        All-Bank VaR                   16.5       14.6       19.9       10.8
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------

	        Hedges

	        There are three main types of hedges for accounting purposes: (i)
	        fair value hedges, (ii) cash flow hedges and (iii) net investment
	        hedges.

	        In a fair value hedge, the change in fair value of the hedging
	        derivative is offset in the Consolidated Statement of Income by the
	        change in fair value of the hedged item relating to the hedged risk.
	        The Bank utilizes fair value hedges primarily to convert fixed rate
	        financial assets and liabilities to floating rate. The main financial
	        instruments designated in fair value hedging relationships include
	        bond assets, loans, deposit liabilities and subordinated debentures.

	        In a cash flow hedge, the change in fair value of the hedging
	        derivative is recorded in other comprehensive income until the hedged
	        item affects the Consolidated Statement of Income. The Bank utilizes
	        cash flow hedges primarily to convert floating rate deposit
	        liabilities to fixed rate. The reclassification from accumulated
	        other comprehensive income to earnings over the next 12 months as a
	        result of outstanding cash flow hedges is expected to be a net loss
	        of approximately $153 million (after tax). As at April 30, 2008, the
	        maximum length of cash flow hedges outstanding was less than seven
	        years.

	        In a net investment hedge, the change in fair value of the hedging
	        instrument is recorded directly in other comprehensive income. These
	        amounts are recognized in income when the corresponding cumulative

	        translation adjustments from the self-sustaining foreign operation
	        are recognized in income.

	        Any hedge ineffectiveness is measured and recorded in current period
	        income in the Consolidated Statement of Income. The Bank recorded a
	        gain of $3 million during the three months ended April 30, 2008
	        (April 30, 2007 - loss of $6 million), of which a gain of $11 million
	        (April 30, 2007 - loss of $5 million) related to cash flow hedges,
	        due to the ineffective portion of designated hedges. For the six
	        months ended April 30, 2008, the Bank recorded a loss of $3 million
	        (April 30, 2007 - gain of $6 million) of which a gain of $7 million
	        (April 30, 2007 - gain of $4 million) related to cash flow hedges.
	        When either a fair value or cash flow hedge is discontinued, any
	        cumulative adjustment to either the hedged item or other
	        comprehensive income is recognized in income over the remaining term
	        of the original hedge, or when the hedged item is derecognized.

	        Items designated as trading

	        The Bank has elected to designate certain portfolios of assets and
	        liabilities as trading which are carried at fair value with changes
	        in fair values recorded in income.

	        The Bank's trading operations transact credit derivatives for
	        customers. The Bank may purchase the underlying loan(s) from another
	        counterparty to economically hedge the derivative exposure. As a
	        result, the Bank significantly reduces or eliminates an accounting
	        mismatch between the two instruments. The fair value of these loans
	        was $7.5 billion as at April 30, 2008 (January 31, 2008 -
	        $6.4 billion; October 31, 2007 - $4.1 billion). The change in fair
	        value that was recorded through trading income for the three and
	        six months ended April 30, 2008 was a gain of $53 million (April 30,
	        2007 - gain of $94 million) and a loss of $227 million (April 30,
	        2007 - gain of $204 million), respectively. These changes in fair
	        value were entirely offset by the changes in the fair value of the
	        related credit derivatives.

	        The Bank's trading operations purchase loan assets in specifically
	        authorized portfolios for which performance is evaluated on a fair
	        value basis. The fair value of these loans was $83 million as at
	        April 30, 2008 (January 31, 2008 - $110 million; October 31, 2007 -
	        $151 million). The change in fair value that was recorded through
	        trading income for the three and six months ended April 30, 2008 was
	        a gain of less than $1 million (April 30, 2007 - gain of $4 million)
	        and a loss of $3 million (April 30, 2007 -gain of $9 million),
	        respectively.

	        The Bank has classified certain deposit note liabilities containing
	        extension features as trading, in order to significantly reduce an
	        accounting mismatch between these liabilities and fair value changes
	        in related derivatives. The fair value of these liabilities was
	        $573 million as at April 30, 2008 (January 31, 2008 - $766 million;
	        October 31, 2007 - $847 million). The change in fair value that was
	        recorded through net interest income for the three and six months
	        ended April 30, 2008 was a loss of $3 million (April 30, 2007 - loss
	        of $1 million) and a loss of $13 million (April 30, 2007 - gain of
	        $1 million), respectively. The change in fair value, which is mainly
	        attributable to changes in interest rates, was substantially offset
	        by the change in fair value of the related derivatives. At April 30,
	        2008, the Bank is contractually obligated to pay $569 million to the
	        holders of the notes at maturity (January 31, 2008 -$764 million;
	        October 31, 2007 - $853 million).

	    8.  Employee future benefits

	        Employee future benefits include pensions and other post-retirement
	        benefits, post-employment benefits and compensated absences. The
	        following table summarizes the expenses for the Bank's principal
	        plans(1):

	                                                                     For the
	                            For the three months ended      six months ended
	        ---------------------------------------------------------------------
	                        April 30 January 31   April 30   April 30   April 30
	        ($ millions)        2008       2008       2007       2008       2007
	        ---------------------------------------------------------------------
	        Benefit expenses
	        Pension plans   $      1   $      1   $      7   $      2   $     16
	        Other benefit
	         plans                30         29         30         59         60
	        ---------------------------------------------------------------------
	                        $     31   $     30   $     37   $     61   $     76
	        ---------------------------------------------------------------------
	        ---------------------------------------------------------------------
	        (1)  Other plans operated by certain subsidiaries of the Bank are not
	             considered material and are not included in this note.

	    9.  Segmented results of operations

	        Scotiabank is a diversified financial services institution that
	        provides a wide range of financial products and services to retail,
	        commercial and corporate customers around the world. The Bank is
	        organized into three main operating segments: Domestic Banking,
	        International Banking and Scotia Capital. Results for these operating
	        segments are presented in the Business segment income tables above.

	    10. Acquisitions

	        The Bank completed the acquisition of Chile's Banco del Desarrollo on
	        November 26, 2007, through the acquisition of 99.5 per cent of the
	        outstanding shares for $1.0 billion Canadian dollar equivalent (CDE).
	        Total assets at acquisition were approximately CDE $5.6 billion,
	        mainly comprised of loans. The Bank will combine the operations of
	        Banco del Desarrollo with its existing Scotiabank Sud Americano
	        banking operations. Based on acquisition date fair values,
	        approximately CDE $797 million has been allocated to the estimated
	        value of goodwill acquired. The purchase price allocation may be
	        refined as the Bank completes its valuation of the assets acquired
	        and liabilities assumed.

	        The Bank completed an 18% equity investment in DundeeWealth Inc. for
	        $348 million on September 28, 2007. The investment is a combination
	        of voting and convertible non-voting shares issued out of treasury by
	        DundeeWealth Inc. The Bank has the right to acquire additional
	        shares in the secondary market up to 19.9%. This investment is
	        accounted for under the equity method of accounting.

	    11. Subsequent events

	        Capital transaction

	        On May 13, 2008, the Bank initiated a normal course issuer bid to
	        purchase up to 20 million of the Bank's common shares. This
	        represents approximately 2 per cent of the Bank's common shares
	        outstanding as at April 30, 2008. The bid will terminate on the
	        earlier of January 11, 2009, or the date on which the Bank completes
	        its purchases.

	        Acquisition

	        On May 13, 2008, the Bank announced its agreement with Intesa
	        Sanpaolo S.p.A. to acquire its shares and other interests in
	        Scotiabank Peru for approximately $230 million, which will increase
	        the Bank's current ownership of 78% in Scotiabank Peru to 98%.
	    >>

	    SHAREHOLDER & INVESTOR INFORMATION

	    Direct deposit service

	    Shareholders may have dividends deposited directly into accounts held at
financial institutions which are members of the Canadian Payments Association.
To arrange direct deposit service, please write to the transfer agent.

	    Dividend and Share Purchase Plan

	    Scotiabank's dividend reinvestment and share purchase plan allows common
and preferred shareholders to purchase additional common shares by reinvesting
their cash dividend without incurring brokerage or administrative fees.
	    As well, eligible shareholders may invest up to $20,000 each fiscal year
to purchase additional common shares of the Bank. Debenture holders may apply
interest on fully registered Bank subordinated debentures to purchase
additional common shares. All administrative costs of the plan are paid by the
Bank.
	    For more information on participation in the plan, please contact the
transfer agent.

	    Dividend dates for 2008

	    Record and payment dates for common and preferred shares, subject to
approval by the Board of Directors.

	    <<
	        Record Date           Payment Date

	        January 2             January 29
	        April 1               April 28
	        July 2                July 29
	        October 7             October 29
	    >>

	    Annual Meeting date for fiscal 2008

	    The Annual Meeting of Shareholders of the Bank for the fiscal year ending
October 31, 2008, will be held in Halifax, Nova Scotia, at 10:00 a.m., on
Tuesday, March 3, 2009.

	    Duplicated communication

	    If your shareholdings are registered under more than one name or address,
multiple mailings will result. To eliminate this duplication, please write to
the transfer agent to combine the accounts.

	    Website

	    For information relating to Scotiabank and its services, visit us at our
website: www.scotiabank.com.

	    Conference call and Web broadcast

	    The quarterly results conference call will take place on May 27, 2008, at
2:00 p.m. EDT and is expected to last approximately one hour. Interested

parties are invited to access the call live, in listen-only mode, by
telephone, toll-free, at 1-800-733-7571 (please call five to 15 minutes in
advance). In addition, an audio webcast, with accompanying slide presentation,
may be accessed via the Investor Relations page of www.scotiabank.com.
Following discussion of the results by Scotiabank executives, there will be a
question and answer session. Listeners are invited to submit questions by e-
mail to investor.relations(at)scotiabank.com.
	    A telephone replay of the conference call will be available from May 27,
2008, to June 12, 2008, by calling (416) 640-1917 and entering the
identification code 21271285 followed by the number sign. The archived audio
webcast will be available on the Bank's website for three months.

	    -------------------------------------------------------------------------

	    <<
	    Contact information

	    Investors:

	    Financial analysts, portfolio managers and other investors requiring
financial information, please contact Investor Relations, Finance Department:

	        Scotiabank
	        Scotia Plaza, 44 King Street West
	        Toronto, Ontario, Canada M5H 1H1
	        Telephone: (416) 866-5982
	        Fax: (416) 866-7867
	        E-mail: investor.relations(at)scotiabank.com

	    Media:

	    For other information and for media enquiries, please contact the Public,
Corporate and Government Affairs Department at the above address.

	        Telephone: (416) 866-3925
	        Fax: (416) 866-4988
	        E-mail: corpaff(at)scotiabank.com

	    Shareholders:
	    For enquiries related to changes in share registration or address,
dividend information, lost share certificates, estate transfers, or to advise
of duplicate mailings, please contact the Bank's transfer agent:

	        Computershare Trust Company of Canada
	        100 University Avenue, 9th Floor
	        Toronto, Ontario, Canada M5J 2Y1
	        Telephone: 1-877-982-8767
	        Fax: 1-888-453-0330
	        E-mail: service(at)computershare.com

	        Co-Transfer Agent (U.S.A.)
	        Computershare Trust Company N.A.
	        350 Indiana Street
	        Golden, Colorado 80401 U.S.A.
	        Telephone: 1-800-962-4284

	    For other shareholder enquiries, please contact the Finance Department:

	        Scotiabank
	        Scotia Plaza, 44 King Street West
	        Toronto, Ontario, Canada M5H 1H1
	        Telephone: (416) 866-4790
	        Fax: (416) 866-4048
	        E-mail: corporate.secretary(at)scotiabank.com

	    >>

	    Rapport trimestriel disponible en francais

	    Le Rapport annuel et les etats financiers de la Banque sont publies en
francais et en anglais et distribues aux actionnaires dans la version de leur
choix. Si vous preferez que la documentation vous concernant vous soit
adressee en francais, veuillez en informer Relations publiques,Affaires de la
societe et Affaires gouvernementales, La Banque de Nouvelle-Ecosse, Scotia
Plaza, 44, rue King Ouest,Toronto (Ontario), Canada M5H 1H1, en joignant, si
possible, l'etiquette d'adresse, afin que nous puissions prendre note du
changement.

	    The Bank of Nova Scotia is incorporated in Canada with limited liability.

	    %SEDAR: 00001289EF          %CIK: 0000009631

	    /For further information: Kevin Harraher, Vice-President, Investor
Relations, (416) 866-5982; Ann DeRabbie, Public Affairs, (416) 933-1344/
	    (BNS. BNS)

CO:  Scotiabank - Financial Releases; Scotiabank

CNW 11:25e 27-MAY-08