Exhibit 99.1

 

2 02 1 AN NU AL    R E P O R T Scotiabank

EARNINGS PER    SHARE GROWTH* Diluted, dollars per share Leading Bank    $7.87 in the Americas 7.5 7.0 6.5 6.0 CAGR = 5% 5.5 5.0 17 18 19 20 21 DIVIDEND GROWTH Dollars per share WHO WE ARE    $3.60 Guided by our purpose – “for every future” – we help our customers,    their families and their communities achieve success through a broad 4.0 range of advice, products and services, including personal and 3.5 commercial banking, wealth management and private banking, CAGR = 4% corporate and investment banking, and capital markets. 3.0 2.5 17 18 19 20 21 REASONS TO INVEST STRONG CAPITAL    POSITION • Leading Bank in the Americas with unique footprint across six core CET1 Capital Ratio % markets of Canada, the United States, and the Pacific Alliance growth 11.5 11.8 12.3 markets of Mexico, Peru, Chile and Colombia 11.1 11.1 • Diversified exposure to high quality banking markets with strong    growth potential and returns • Strong balance sheet, capital and liquidity ratios supported by    prudent risk management culture • Attractive dividend yield with a 20-year CAGR of 9% 17 18 19 20 21 • Investment in technology to support digital banking strategy to    increase digital sales and adoption    RETURN ON EQUITY:* % 15.0 VS 10.4% in 2020 *Adjusted – please refer to page 17

CEO’s Message to Shareholders MESSAGE TO OUR SHAREHOLDERS Dear fellow shareholders,    For nearly two years, we have been navigating through an unprecedented global health crisis that has continued to challenge all of us, both personally and professionally. As society begins to emerge from the pandemic, it is our hope that you and your loved ones are staying healthy and safe. This year marks the Bank’s 189th anniversary. We are, in fact, older than Brian J. Porter the country of Canada itself. Our present strength has been earned by President and Chief Executive Officer generations of Scotiabankers, working together to deliver for our customers and shareholders, through good and challenging times. Generations of Scotiabankers have dedicated themselves to building a better bank over the longer term, and we, the stewards of this tremendous institution, work each and every day to ensure that the Bank will continue to prosper. Over the past several years, we have been delivering on our forward-looking plan to give our customers a great experience, ensuring that they have the right tools and advice to succeed, while creating value for our shareholders. What’s inside We strengthened the Bank’s foundation through significant investments in people, processes, technology, and products. Our team is as strong and diverse as it has ever been. At the same time, we simplified our footprint, 1 CEO’s Message to    Shareholders reducing risk and focusing on the countries where we could build scale and deliver real value for our customers and shareholders. 8 Chairman’s Message    to Shareholders    9 Executive                Management Team    10 Board of Directors EARNINGS    BY MARKET $0.3 11 Environmental, (in $ billions) $0.3 Social & Governance $6.6 $0.7 13 Management’s                Discussion and Analysis    lCanada 68% Highlights lPacific Alliance. 18% $ $9.6* 1.7 14 Management’s lU.S. . 7% Discussion and Analysis Total lCaribbean & Central America.3%    145 Consolidated Financial    lOther International. 4% Statements *Adjusted – please refer to page 17 2021 Scotiabank Annual Report | 1

While it is impossible to predict events like a global We have stood by our customers throughout these pandemic, geopolitical instability, or intense market challenging times, and we are grateful for the confidence volatility, the steps we took over the past several years that they have shown in us. Looking forward, we are — independent of any crisis — to build a stronger and emerging from the pandemic even more resilient, aligned, more resilient bank that is focused on the Americas, and stronger than before. enabled us to weather the COVID-19 storm, operationally and financially.    As we reflect on the past year, we are exceedingly proud FINANCIAL of the ways in which we supported our employees, customers, and communities. The vast majority of P E R F O R M A N C E our branches stayed open for business throughout the pandemic to continue to serve our customers. This year, the Bank’s earnings demonstrated the power    We supported our employees with new benefits, health of our repositioned, well-diversified businesses, and and wellness support, and frequent communication we exceeded our medium-term objectives, rebounding to help them manage through this challenging period. strongly in EPS growth, return on equity, operating As a result, our internal employee engagement scores leverage, and capital ratios. Our performance validates are higher than they were even before the pandemic. the benefits of the significant investments we have made    Scotiabank was proud to be a leader in society’s broader in our businesses over the last few years. response to COVID-19, which has demonstrated the impact of individual acts of heroism, the power of Our CANADIAN BANKING business continues corporate, public, and not-for-profit collaboration, to deliver very strong results for the Bank, with strong and the unwavering determination of the human spirit performance in business banking, a high-quality in the face of adversity. We partnered with Toronto- residential mortgage portfolio, and a market-leading based organizations in a record-setting effort to get our position in automotive finance. Canadian Banking community vaccinated. We were a founding partner of a reported adjusted earnings of $4,171 million in 2021, rapid screening consortium that now supports screening an increase of 60% compared to the prior year due to efforts at more than 1,700 organizations across Canada. lower provision for credit losses and higher revenues We supported vaccination efforts in Peru with a donation driven by strong asset growth, which is expected to to a local non-profit business association to finance remain strong into 2022. the arrival of the country’s first million doses. These are just a few examples of how we played our part in GLOBAL WEALTH MANAGEMENT reported helping to lift the communities in which we operate adjusted earnings of $1,592 million in 2021, up 23% out of the pandemic. compared to the prior year. This was driven by strong results across our Canadian advisory and At the same time, the pandemic has surfaced and asset management businesses. Global Wealth solidified gaps and disparities that touch many corners Management is focused on delivering comprehensive of our society. Through the past year, we have similarly wealth management advice and solutions to clients been witness to extreme weather and other natural across Scotiabank’s footprint, and is now ranked events that have served to underscore the climate crisis. second in terms of retail mutual funds market share in    Transitioning to a net zero economy in the fight against Canada and is the third largest wealth management climate change will take time, and we are supporting our business in Canada. clients as they move towards net zero emissions. We know that companies and organizations from across sectors,    GLOBAL BANKING AND MARKETS delivered including the financial sector, have a role to play in tackling another strong year with earnings of $2,075 million, these issues, and the Bank has taken important measures with strong performance in corporate banking and over the past year to turn the dial on environmental, social, and governance (ESG) challenges facing people capital markets. Our Global Banking and Markets and communities across our footprint. business is the second largest wholesale banking business amongst Canadian peers. We are the only The past two years have been the truest test of our full-service corporate and commercial bank with local long-term strategy and we have gained even greater presence in all of our core Latin American markets, confidence in the investments and decisions we made and we are a top-10 foreign bank in the United States. to focus our footprint and strengthen our business mix.    2 | 2021 Scotiabank Annual Report

INTERNATIONAL BANKING reported adjusted Digital Progress: earnings of $1,855 million, an increase of 62% compared to the prior year due to lower provision for credit losses and prudent expense management.    Earnings are expected to grow through 2022 from ALL BANK DIGITAL ADOPTION (%)* good loan and revenue growth as most of our core markets in the region are recovering toward their +600 bps pre-pandemic levels of activity. 50 56 We expect to deliver solid performance across all our    43 businesses in 2022 as economic conditions continue to 36 improve. Our focus on gaining scale in our core markets +2,000 bps and businesses has provided us with optionality, and we have delivered solid growth while earning through the approximately $750 million of cumulative earnings that 2018 2019 Q4/20 Q4/21 we gave up as a result of divestitures since 2019. Our    diversified business model has shown resilience through Digital Adoption: (% of customers with Digital login (90 days) / Total addressable Customer Base) the pandemic, and the Bank is well positioned to achieve its full earnings power in the upcoming year. ALL BANK DIGITAL SALES (%) P U T T I N G O U R +600 bps C U S T O M E R S    42 36 F I R S T 28 22    +2,000 bps We have long believed that the best relationships are forged during challenging times, and I am 2018 2019 Q4/20 Q4/21 exceedingly proud of the ways in which our team    Digital Sales: (% of retail unit sales using Digital platforms, excluding auto, stepped up to put our customers first over the past broker originated mortgages and mutual funds) year, as they have for the last 189 years. In the face of uncertainty, building on last year’s introduction of the most ambitious relief program in the Bank’s ACTIVE DIGITAL USERS (#’000) history, this year we responded with new products and more support for our customers.    +7% We endeavoured to make banking with us even more convenient in order to help our customers manage    7,524 8,073 through uncertainty and enable them to thrive. 6,316 We continued to make substantial investments in 5,276 +53% our branches and contact centres to better serve our customers. At the same time, we have invested in our digital platforms in order to simplify the customer experience, implement the highest level 2018 2019 Q4/20 Q4/21 of security standards, and improve stability. Digital Users: # of customers who logged into website and/or mobile in the last 90 days * Digital Adoption definition for Canada was updated in Q1/21 to reflect new addressable customer base, excluding indirect-channel acquisitions. 2021 Scotiabank Annual Report | 3

LET ME OUTLINE A FEW RECENT EX AMPLES 2021 Canada Credit Card Mobile App Satisfaction Study, OF INVESTMENTS WE HAVE MADE TO HELP and placed 2nd in Customer Experience in Competitive    OUR CUSTOMERS SUCCEED: NPS for the first time since the study was launched in    2017. This is in addition to a number of recognitions across In Canada, new tools and resources have empowered different channels, including our branch channel, where our financial advisors to have deeper, more meaningful we have demonstrated strong results. Our commitment conversations with our customers, in order to provide to delivering an exceptional customer experience, and them with the right advice to meet their complex and our focus on providing fast, easy-to-use, and secure evolving financial needs. Through our Advice+ program, online banking services, were driving forces behind financial plan completion has increased 28% year-over-these recognitions. year, and visits to our online Advice+ centre are also up significantly. We also introduced new and improved ways Following Scotiabank’s second consecutive recognition to connect our customers to a dedicated Scotiabank as the Canadian Bank of the Year in December 2020, advisor through our mobile app and online banking The Banker magazine—a Financial Times publication—platforms, to discuss their banking needs. also named Scotiabank the Most Innovative in Data in its Global Innovation in Digital Banking Awards for the Across our international footprint, we introduced new Bank’s use of data and analytics to support vulnerable products and services to support how and where our customers. customers want to bank. In Chile, this included the launch of 100% digital plans, giving customers flexibility The primary purpose of our Bank is to meet the needs to choose the products and benefits that are right of our customers and future customers, by providing for them, and the launch of ScotiaPay, which allows exceptional advice and a great banking experience, and customers to shop online and in-person using their standing by them in both good and challenging times. smartphones at thousands of companies across As our customers’ banking needs are evolving, it is clear the country. that they are seeing the value of our investments to evolve with them. For our Wealth clients, we launched solutions to help them manage through the current low interest rate environment. For example, we introduced the B U I L D I N G A MD Platinum Global Private Credit Pool for physicians and their families, and the JF Partners Private Equity W I N N I N G T E A M Fund for eligible clients — which is a turnkey global private equity solution — to enhance potential returns on their portfolios. For our Equities, Fixed Income, and FX clients, we “ introduced ScotiaRED—a series of state-of-the-art At Scotiabank, we are building a winning electronic trading tools that deliver high-quality execution using advanced analytics and artificial team that is highly tuned in to the needs of intelligence. ScotiaRED marks the next generation of our customers, and who bring an intimate electronic trading tools, both enhancing performance and providing a superior client experience across knowledge of the markets and businesses    our footprint. in which we operate. The Scotiabank Women Initiative surpassed its    target of deploying $3 billion to women-owned or women-led businesses—and we did it ahead of schedule. I am particularly proud of the ways in which our team has Our highly-successful, globally-expanding initiative helped support thousands of women entrepreneurs and women- managed over the past two years. Whether they have led businesses across Canada. The success of women-led been on site in a customer-facing role or critical function, businesses is essential to the health of the Canadian or working from home, they have shown remarkable economy and we are proud to support them through adaptability in continuing to deliver for the Bank and access to capital, mentorship, and education. for our customers. As more of our team starts to return This year we were proud to receive the #1 ranking in the to the workplace, we will be leveraging what we have J.D. Power 2021 Canada Online Banking Satisfaction Study learned over the past two years working under these for the second year in a row, as well as #1 in the J.D. Power unique conditions to drive some change in how we work,    4 | 2021 Scotiabank Annual Report

as we continue to evolve the employee experience— from ensuring our benefits offering is the right one, Employer to providing more flexibility. It is important to us as an organization that we represent of Choice the diverse communities that we serve. Building a workplace that fully enables a diverse community of employees to thrive—and in turn a stronger and more inclusive work environment—means more of the best apply, and more of the best stay. While our work to build • Included on Refinitiv’s global list of the a truly inclusive organization is never complete, we are Top 25 Most Diverse and Inclusive Companies pleased with the progress we have made, including the and Bloomberg’s Gender Equality Index introduction of renewed diversity and inclusion goals • Recognized by Great Place to Work as a Best that were developed to further increase the diversity Workplace in Canada, Peru, Chile, Caribbean and of our employee population in the coming years. Central America, Dominican Republic, Costa Rica, Uruguay, and Panama We were proud to be named one of the top 25 most    Diverse and Inclusive companies globally by Refinitiv • Named one of Canada’s Best Employers by in 2021. We received this recognition for the fourth year Forbes, Canada’s Top Employers for Young People, and a LinkedIn Top Company in Canada in a row, after a comprehensive analysis conducted by and Mexico Refinitiv of more than 11,000 companies globally, and it was awarded in part due to our bold commitments, • 90% of employees globally feel they belong industry leading performance and positive social impact. at Scotiabank, 93% believe Scotiabank is In recognition of the way that our employees feel about committed to being socially responsible, and 93% are proud to work for Scotiabank working and belonging at Scotiabank, we were also pleased    • Named to the Globe and Mail’s Women Lead to have been named a Best Workplace by Great Place to Here list recognizing best-in-class executive Work in countries across our footprint in 2021, including in Canada and Latin America. Great Place to Work also gender diversity in corporate Canada • Increased mental health benefits coverage named us a Best Workplace for Women in Canada. in Canada to $10,000, added new gender-affirmation benefits in Canada and the U.S., L E A D I N G I N and extended medical benefits coverage to same sex partners in Trinidad and Tobago T H E A M E R I C A S • Recognized as a Best Workplace from Home and Best Workplace for Millennials in Peru by Great Place to Work Geographic diversification is a part of our DNA. • 38% of Scotiabank’s Board of Directors and    We followed our customers across Canada, into the 37% of senior leadership roles (Vice President United States, the Caribbean and Central and South and above) in Canada are women; more than America because that is where they expanded their half of our workforce in Canada are women businesses. Our long history across the Americas has • Received two 2021 Brandon Hall Awards of given us a deep understanding of how these countries Excellence in Human Capital Management operate, the strengths of their economies, and the    • Our employee engagement score of 88% places aspirations of the people who live and work there. Scotiabank in the Qualtrics Top 10% Financial Clearly, economies around the world have been Services benchmark impacted by COVID-19, and some Americas economies • Recognized as a Best Workplace for Women have faced particularly strong headwinds. Today, while in Canada and Peru Mexico and Chile are very much on the mend, Peru    • Provided mandatory inclusion training to all and Colombia still have some ways to go. We remain, employees globally in our efforts to advance however, confident in the rebound of these economies diversity, inclusion, and belonging over the coming quarters. 2021 Scotiabank Annual Report | 5

The reality is that when you are operating in younger OUR democracies with developing economies there will be periods of uncertainty. What is more important is how R E S P O N S I B I L I T Y you are positioned to win over the longer term. As we T O O U R have demonstrated throughout these unprecedented times, the strategic decisions we made to focus our C O M M U N I T I E S footprint on countries with young, dynamic, growing, and relatively unbanked populations — countries with significant untapped potential — were the right Being a leader, however, is about more than just our decisions, regardless of the circumstances. financial metrics. It is also about how we lead by example in the communities in which we operate. In 2021, Scotiabank deepened its commitment to “ strengthening communities across our footprint by Today, approximately 95% of our earnings launching ScotiaRISE — an investment of $500 million come from our six core markets of Canada, over the next ten years to promote economic resilience among disadvantaged groups. As part of ScotiaRISE,     the U.S., Mexico, Peru, Chile and Colombia. we made a landmark commitment to Windmill    We are the third largest in bank by loans Microlending — one of the largest of its kind in Canadian in Canada, Peru, and Chile; the fifth largest history — directed toward programs that provide professionally skilled women immigrants with career    in Mexico; the sixth largest in Colombia; mentoring and financial support. and a top 10 foreign bank in the U.S. We are leveraging our role as a trusted partner in the community to help drive change. Through our hockey for all program, which launched earlier this year, we are contributing $2 million over the next year towards programs that focus on increasing diversity among This year, we furthered our strategic focus on operations community and grassroots hockey organizations across our footprint where we can achieve greater scale across Canada. and deliver the highest value for customers, increasing We were the first large financial institution to align with our ownership stake in our Chilean operations by Canada Mortgage and Housing Corporation to make an 7%. Scotiabank’s presence in Chile is a key pillar of impact on housing affordability. Housing affordability is our strategy, and we look forward to building on our one of the most pressing issues of our time, as Canada momentum in Chile over the coming years. As our continues to experience population growth, changing Global Wealth business continues to perform very demographics, and an evolving relationship between well, we are keeping an eye on opportunities for further where Canadians live and work. We will mobilize growth, including expanding our U.S. offering. We $10 billion in financing over the next ten years to recognize that a stronger U.S. dollar management increase affordable housing supply. capability is important to our customers, particularly We have also made great strides towards our in Latin America. Growing that business is something commitment to reach net zero carbon emissions we will do thoughtfully, in the same way we built our by 2050, including ongoing work to establish Bank-wide, business in Canada. quantitative, time-bound targets for reducing greenhouse gas emissions associated with our lending activities, and launching our inaugural Net Zero Research Fund.    6 | 2021 Scotiabank Annual Report

This year, we joined the Net-Zero Banking Alliance, Global Banking and Markets businesses continue to grow reinforcing our commitment to playing a significant their market share, and our International Banking business role in financing the climate transition through this has rebounded quickly to exceed pre-pandemic earnings. years-long journey. One of our key areas of continued focus in 2022 and For our corporate and commercial clients, our Sustainable beyond will be on environmental, social, and governance Finance Group continues to provide industry-leading matters. We have already taken tangible steps, and advice and expertise to help them achieve strong business introduced innovative programs, to make real progress growth that is environmentally and socially responsible. on issues such as climate change and diversity and In our Global Wealth Management business, consideration inclusion. At the same time, we know that there is always of ESG factors as well as leveraging our team of dedicated more to do, and you will see Scotiabank supporting the ESG professionals are important elements in our fight for a more resilient and more just world. investment managers’ processes. In 2021, nine more dedicated ESG solutions were launched for investors I would like to recognize and thank Scotiabank’s Board across our geographical footprint, with additional new of Directors for their ongoing engagement, counsel, launches to come in 2022. and support over the past year. The leadership team and I benefit immensely from the wealth of knowledge    Through our Global Banking and Markets team, we and experience that they bring to the Bank, in good and further closed a USD 1 billion 3-year Sustainability difficult times. Bond offering—the largest by a Canadian Corporate or    Financial to date—with proceeds funding the financing I would also like to extend a warm welcome to Don Callahan or refinancing of green or social assets, businesses, and who joined our Board earlier this year. Don is a seasoned projects. The Bank has now mobilized $58 billion of its executive with a breadth of experience, and we are $100 billion commitment by 2025 to reduce the impacts fortunate to have him around the table. Sincere thanks of climate change. to Indira Samarasekera and Charles Dallara, who left the Board this year, for their many years of service as In recognition of our ESG efforts, for the fourth Directors. We wish them our best. consecutive year, the Bank was named to the Dow Jones Sustainability Index North America and ranked in the Finally, I would like to extend my gratitude to our winning top 8% of participating financial institutions from around team of 90,000 Scotiabankers for their contributions the world for sustainability, while maintaining a top during another challenging year. Across our footprint, score in Corporate Governance, placing us in the top our team has risen to the occasion, continued to put our 1% of our peers. Our strong ESG practices have also been customers first, and demonstrated time and time again recognized with a “AAA” rating from MSCI, held by only why we are a Leading Bank in the Americas. 2% of banks globally. For this, we are extremely proud. Today we have the capital, the reputation, the partnerships, and the team to realise our ambitions for the long term. We are confident in our footprint, and in    PO S I T I O N E D F O R the strategic decisions we have made to become a more focused bank that is positioned for the very bright future. T H E F U T U R E Thank you for your trust in the Bank and its leadership team throughout these uncertain times. We are profoundly grateful and we do not take it for granted. As we look forward to the coming year, we continue to find ourselves as a highly competitive player in each of our core markets, with optionality and multiple avenues to grow. Our Canadian Banking business has built very strong momentum, our Global Wealth Management and    2021 Scotiabank Annual Report | 7

Chairman’s Message to Shareholders MESSAGE TO OUR SHAREHOLDERS Dear fellow shareholders,    In 2021, the Bank continued to demonstrate the benefits of our diversified strategy with strong earnings contributions from each of our business lines. While the economic recovery is progressing at uneven rates across our footprint, we have demonstrated remarkable    Aaron W. Regent operating resiliency throughout the pandemic. Chairman of Scotiabank’s Board of Directors Our strategic focus on simplifying and diversifying As we move forward with our ESG initiatives, we will our business has put the Bank in a strong position for continue to actively engage with our stakeholders to growth as we continue to invest in people, products, and understand their priorities and to listen to their concerns. technology. In particular, we would like to highlight strong RECOGNIZING STRONG LEADERSHIP gains in digital innovation that have allowed us to deliver improved customer experiences while improving efficiency. On behalf of the Board, I would like to highlight the importance of our President and CEO’s leadership during    ENHANCED STAKEHOLDER ENGAGEMENT the year. Brian Porter has provided a steady hand to Your Board recognizes the important role of strong steer us through this challenging time, and the vision corporate governance in both maintaining and to set, and plan to achieve, our ambitious ESG goals. strengthening the Bank’s resiliency moving forward.    At the Board level, we welcomed Daniel (Don) Callahan With that in mind, we have strengthened our relationships this summer whose wealth of expertise in financial with our stakeholders, taking a proactive approach services, executive management, operations, technology, to engagement on the issues that matter most. My and ESG will serve the Corporate Governance and Risk colleagues and I have spoken with many stakeholders Committees well. On behalf of my fellow Board members, this year and these constructive discussions are essential I would also like to thank Indira Samarasekera and for long term planning and accountability. Charles Dallara, who retired from the Board this past April, for their many contributions to the Bank during their tenure.    ESG ACROSS OUR CORE STRATEGY Thanks also to our leadership team, and all 90,000 This year, we have brought an environmental, social, and employees, for the tremendous resilience they have governance (ESG) focus to the forefront of our corporate shown over the past year. They can be proud of the ways governance policies. A discussion of relevant ESG issues in which they have supported the Bank’s customers, is on the agenda of every Board meeting and each of our delivered for the Bank’s shareholders, and for one another. Board committees oversees various aspects of the Bank’s ESG strategy, initiatives, risks, and reporting. Looking forward, I am optimistic about the journey the Bank is on, and the direction in which we are moving. Our Bank assembled the ESG Advisory Committee this We are setting ambitious goals – on net zero emissions, year to oversee ESG strategy at the Bank. The committee diversity and inclusion, and community investment – is a multidisciplinary team of Scotiabank executives that and our team is positioned for continued success. draws on expertise from all of our business lines, as well as key functional units with influence on ESG matters, In closing, I would like to thank you, our shareholders, for and provides the Board with regular briefings on the engaging with us on these important issues and for the Bank’s ESG strategic progress. confidence you have in us, as we build an even better bank.    8 | 2021 Scotiabank Annual Report

Executive Management Team Our Leadership Team Brian J. Porter Anique Asher Adrián Otero Rosiles President and Chief Executive Officer Executive Vice President, Executive Vice President Finance & Strategy & Country Head, Mexico Ignacio “Nacho” Deschamps Group Head, International Banking Stephen Bagnarol Francisco Sardón & Digital Transformation Executive Vice President, Executive Vice President Canadian Business Banking & Country Head, Peru Glen Gowland Group Head, Alex Besharat Anya M. Schnoor Global Wealth Management Executive Vice President, Executive Vice President, Canadian Wealth Management Caribbean, Central America Jake Lawrence & Uruguay (CCAU) CEO & Group Head, Tracy Bryan Global Banking and Markets Executive Vice President, Kevin Teslyk Global Operations Executive Vice President    Barbara Mason & Chief Operating Officer,    Group Head & Stuart Davis Canadian Banking Chief Human Resources Officer Executive Vice President, Financial Maria Theofilaktidis Crimes Risk Management and Group    James Neate Chief Anti-Money Laundering Officer Executive Vice President,    President & Group Head, Finance Corporate & Investment Banking John Doig Executive Vice President, Ashley Veasey Dan Rees Retail Sales Executive Vice President    Group Head, Canadian Banking & Global Chief Information Officer, Loretta Marcoccia Business Technology Raj Viswanathan Executive Vice President    Group Head & & Chief Operating Officer, Terri-Lee Weeks Chief Financial Officer Global Banking and Markets Executive Vice President, Retail Customer Michael Zerbs Diego Masola Group Head, Executive Vice President Technology & Operations & Country Head, Chile Ian Arellano Tom McGuire Executive Vice President Executive Vice President    & General Counsel & Group Treasurer Paul Baroni Gillian Riley Executive Vice President Executive Vice President,    & Chief Auditor President & CEO, Tangerine Nicole Frew Shawn Rose Executive Vice President & Executive Vice President    Chief Compliance Officer & Chief Digital Officer Phil Thomas    Chief Risk Officer 2021 Scotiabank Annual Report | 9

Board of Directors Our Board of Directors Aaron W. Regent BOARD OF DIRECTORS Calin Rovinescu • Chairman of the Board • Corporate director • Founder, Chairman and Scott B. Bonham • Scotiabank director since Chief Executive Officer of • Corporate director and co-founder November 1, 2020 Magris Performance of Intentional Capital Materials Inc. • Scotiabank director since • Scotiabank director since Susan L. Segal January 25, 2016 • President and Chief Executive April 9, 2013 Officer of the Americas Society    Daniel (Don) H. Callahan and Council of the Americas COMMITTEE CHAIRS • Corporate director and Executive • Scotiabank director since Chairman of TIME USA LLC December 2, 2011 Nora A. Aufreiter • Scotiabank director since    • Corporate Governance June 15, 2021 Benita M. Warmbold Committee Chair • Corporate director • Corporate director Lynn K. Patterson • Scotiabank director since    • Scotiabank director since • Corporate director October 29, 2018 August 25, 2014 • Scotiabank director since September 1, 2020 Guillermo E. Babatz • Risk Committee Chair Michael D. Penner • Managing Partner of • Corporate director and Senior Advisor Atik Capital, S.C. for Partners Group AG • Scotiabank director since • Scotiabank director since January 28, 2014 June 26, 2017 Una M. Power Brian J. Porter • Audit and Conduct Review • President and Chief Executive Officer    Committee Chair of Scotiabank • Corporate director • Scotiabank director since April 9, 2013 • Scotiabank director since April 12, 2016 L. Scott Thomson • Human Capital and Compensation Committee Chair • President and Chief    Executive Officer of    Finning International Inc. • Scotiabank director since April 12, 2016 10 | 2021 Scotiabank Annual Report

Environmental, Social & Governance ESG SCOTIABANK’S APPROACH TO ESG FOCUSES ON FOUR STRATEGIC PILLARS:    Environmental Action, Economic Resilience, Inclusive Society, and Leadership & Governance. We develop, implement, and invest in initiatives across these areas in order to maximize impact on our operations, our customers, and the world around us, for every future.    Key ESG Highlights ENVIRONMENTAL SOCIAL    • Issued our inaugural USD 1 billion 3-year • Our Scotiabank Women Initiative® exceeded its Sustainability bond, with proceeds used to fund original commitment, investing $3.2 billion in capital the financing or refinancing of eligible green and since 2018 in women-led businesses, engaging social assets. It is the largest Sustainability Bond over 6,000 women entrepreneurs, and more than by a Canadian Financial or Corporate to date. 15 organizations in the effort. • Updated Bank-wide credit policies to restrict direct • Pledged $10 billion over 10 years to support Canada financing or advisory services directly related to Mortgage and Housing Corporation’s housing exploration, development, or production of oil and aspiration through sustainable finance and community gas within the Arctic Circle, and we will not finance investment solutions. standalone projects for thermal coal mining or    • Updated our diversity and inclusion objectives and coal power generation. targets to improve representation throughout our    • Joined the United-Nations-convened Net-Zero business, including reaching 30% of senior leadership Banking Alliance (NZBA), became a member of roles globally held by People of Colour, and increasing the Partnership for Carbon Accounting Financials the representation of Indigenous People and people (PCAF), and launched our net zero pathways with disabilities across all levels of our workforce. project with the goal of establishing bank-wide,    • Launched Project Shadow in collaboration with quantitative, time-bound targets for reducing FINTRAC and the Canadian Centre for Child Protection greenhouse gas (GHG) emissions associated with    (C3P). This public-private partnership enables financial our lending activities. institutions to do their part in detecting online child    • Established a $10 million Net Zero Research Fund sexual exploitation. to advance research and leadership in support of    • Collaborated in innovative partnerships to support global decarbonization efforts and selected our survivors of human trafficking and online exploitation to first cohort of grant recipients for Canada, the U.S., intercept crime and provide access to financial services and Latin America. to help survivors rebuild their financial independence. 2021 Scotiabank Annual Report | 11

GOVERNANCE • Became a corporate member of Women Business Enterprises Canada Council to strengthen • Ranked in the top 8% of participating financial procurement ties with women-owned businesses institutions from around the world for sustainability and advance supplier diversity. according to the Dow Jones Sustainability Index, with perfect scores in Anti-Crime Policy, Environmental • Recognized as the Most Innovative in Data by Reporting, and Risk and Crisis Management, and The Banker’s Global Innovation in Digital Banking among the top 1% for Corporate Governance. Awards for the innovative use of data and analytics to identify customers facing financial vulnerability during• Completed a human rights assessment and updated COVID-19, which allows the Bank to proactively reach our global Human Rights Statement to improve its out and offer support and services. alignment with best practices and the UN Guiding Principles Reporting Framework. • Recognized for Outstanding Leadership in Sustainability Transparency by the Global Finance Sustainable Finance Awards.CLIMAT E C O M M I T M E N T S S P O T L I G H T    Scotiabank’s Climate Commitments form the 1. Mobilize $100 billion in capital by 2025 to reduce Bank’s enterprise-wide climate strategy, which is the impacts of climate change. We are more than a comprehensive strategy addressing climate risks halfway to our commitment, mobilizing $58 billion and opportunities for our customers, shareholders, as of November 2021. employees, other stakeholders, and our business 2. Ensure robust climate-related governance and and operations. transparency in our reporting. Governance of climate change and ESG has been enhanced in 2021 We are united in the global goal to achieve net zero by establishing a multi-disciplinary Corporate ESG by 2050 and are committed to setting bank-wide Advisory Committee comprising senior executives targets for reducing GHG emissions including those from across the Bank. associated with our lending activities, decarbonizing    3. Enhance integration of climate risk assessments in our own operations and finding innovative solutions our lending, financing, and investing activities. We to reduce the Bank’s impact on climate change. have expanded the Bank’s Credit Policy Manual and In support of the Paris Agreement, our Climate Handbooks to explicitly address climate risk in the Commitments outline how we will continue to policies and procedures of lending activities. support our customers in the transition to a 4. Decarbonize our own operations and find innovative low-carbon economy, ensure robust climate- solutions to reduce the Bank’s impact on the related governance, manage climate-related risks, changing climate. We are on track to meet our target decarbonize our own operations, and contribute of 100% emission-free energy sources for our global to the global dialogue on climate change. operations by 2030. 5. Leverage our Climate Change Centre of Excellence to mobilize internal and external collaboration and contribute to the global conversation on climate change. In 2021, we launched the $10 million Net Zero Research Fund to advance cross-sectoral research that supports global decarbonization. 12 | 2021 Scotiabank Annual Report

Management’s Discussion    and Analysis Highlights RES ULT S AT A G L A N C E Total Assets Revenue MEDIUM-TERM FINANCIAL OBJECTIVES $1,185 $31 Adjusted 2021 Billion Billion Key 3-Year Performance    Metrics Performance* (Y/Y)* Loans Deposits 1 $ $ Earnings Per Share Growth: 7%+ 3.4% 46.8% 637 797 Billion Billion Return on Equity: 14%+ 2 13.1% 15.0% Achieve Positive 1 Net Total    Operating Leverage +0.1% +1.5% 100 Income Taxes**    09 10 Strong 11 12 13 14 15 16 17 18 19 Strong $ * $ Maintain Strong Capital Ratios Levels Levels 10.2 4.2 Billion Billion Share price appreciation plus dividends    1 Reflects 3-year CAGR, 2 Reflects 3-year average reinvested, 2009 = 100 *Adjusted – please refer to page 17 **Includes income and other taxes 350 TOTAL RETURN 300 Share price appreciation plus dividends    TO COMMON reinvested, 2011 = 100 SHAREHOLDERS 250 200 150 lScotiabank lS&P/TSX Banks Total Return Index lS&P/TSX Composite Total Return Index 100 11 12 13 14 15 16 17 18 19 20 21 COMMON EQUITY AVERAGE ASSETS EARNINGS BY    TIER 1 CAPITAL RATIO % BY MARKET % BUSINESS LINE %* 11 11.1 11.8 12.3 3 21 43 10.0 9.0 10.5 14 Regulatory 17 minimum 12 60 2019 2020 2021 19 lCanada lCaribbean & lCanadian Banking lGlobal Wealth Management lPacific Alliance Central America lInternational Banking lGlobal Banking and Markets lU.S. lOther International For more information, please refer to page 64 For more information, please refer to page 228 *Adjusted – please refer to pages 20-22 *Excludes corporate segment. 2021 Scotiabank Annual Report | 13

ENHANCED DISCLOSURE TASK FORCE (EDTF) RECOMMENDATIONS

The Enhanced Disclosure Task Force (EDTF) was established by the Financial Stability Board in May 2012 with the goal of developing fundamental disclosure principles. On October 29, 2012 the EDTF published its report, “Enhancing the Risk Disclosures of Banks”, which sets forth recommendations around improving risk disclosures and identifies existing leading practice risk disclosures.

Below is the index of all these recommendations to facilitate easy reference in the Bank’s annual report and other public disclosure documents available on www.scotiabank.com/investorrelations.

 

 

14  |  2021 Scotiabank Annual Report

Management’s Discussion and Analysis

 

Table of Contents

 

 

2021 Scotiabank Annual Report  |  15

Management’s Discussion and Analysis

 

FORWARD LOOKING STATEMENTS

From time to time, 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. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis in the Bank’s 2021 Annual Report under the headings “Outlook” and in other statements regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank’s businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as “believe,” “expect,” “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “project,” and similar expressions of future or conditional verbs, such as “will,” “may,” “should,” “would” and “could.”

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved.

We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; operational and infrastructure risks; 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, and the extent to which products or services previously sold by the Bank require the Bank to incur liabilities or absorb losses not contemplated at their origination; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank’s ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank’s information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; climate change and other environmental and social risks, including sustainability that may arise, including from the Bank’s business activities; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its impact on the global economy, financial market conditions and the Bank’s business, results of operations, financial condition and prospects; 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. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank’s results, for more information, please see the “Risk Management” section of the Bank’s 2021 Annual Report, as may be updated by quarterly reports.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2021 Annual Report under the headings “Outlook”, as updated by quarterly reports. The “Outlook” sections are based on the Bank’s views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. 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.

Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, 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.

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.

November 30, 2021

 

16  |  2021 Scotiabank Annual Report

MANAGEMENT’S DISCUSSION & ANALYSIS

The Management’s Discussion and Analysis (MD&A) is provided to enable readers to assess the Bank’s financial condition and results of operations as at and for the year ended October 31, 2021. The MD&A should be read in conjunction with the Bank’s 2021 Consolidated Financial Statements, including the Notes. This MD&A is dated November 30, 2021.

Additional information relating to the Bank, including the Bank’s 2021 Annual Report, are available on the Bank’s website at www.scotiabank.com. As well, the Bank’s 2021 Annual Report and Annual Information Form are available on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

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), which are based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), are not defined by GAAP and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Bank believes that non-GAAP measures are useful as they provide readers with a better understanding of how management assesses performance. These non-GAAP measures are used throughout this report and defined below.

Adjusted results and diluted earnings per share

The following table presents a reconciliation of GAAP Reported financial results to Non–GAAP Adjusted financial results. The financial results have been adjusted for the following:

1. Adjustments impacting current and prior periods:

A. Amortization of Acquisition-related intangible assets:

These costs relate to the amortization of intangibles recognized upon the acquisition of businesses and are recorded in the Canadian Banking, International Banking and Global Wealth Management operating segments.

B. Restructuring and other provisions, recorded in Q4, 2021:

The Bank recorded a restructuring charge of $126 million pre-tax, substantially related to International Banking for the cost of reducing branches and full-time employees, driven by the accelerated customer adoption of digital channels and process automation. These efficiencies are a result of the Bank’s commitment to simplify processes and optimize distribution channels to run businesses more effectively while meeting changing customer needs. This charge was recorded in the Other operating segment.

The Bank recorded settlement and litigation provisions in the amount of $62 million pre-tax in the Other operating segment in connection with the Bank’s former metals business.

2. Adjustments impacting prior periods only:

A. Acquisition and divestiture-related amounts, which are defined as follows:

 

i.

Acquisition-related integration costs – Includes costs that were incurred and related to integrating previously acquired businesses. These costs were recorded in the Canadian Banking, International Banking and Global Wealth Management operating segments. The costs relate to the following acquisitions:

 

•

Banco Cencosud, Peru (closed Q2, 2019)

 

•

Banco Dominicano del Progreso, Dominican Republic (closed Q2, 2019)

 

•

MD Financial Management, Canada (closed Q4, 2018)

 

•

Jarislowsky, Fraser Limited, Canada (closed Q3, 2018)

 

•

Citibank consumer and small and medium enterprise operations, Colombia (closed Q3, 2018)

 

•

BBVA, Chile (closed Q3, 2018)

 

ii.

Net (gain)/loss on divestitures – The Bank announced a number of divestitures in accordance with its strategy to reposition the Bank. The net (gain)/loss on divestitures is recorded in the Other operating segment (refer to Note 37 for further details):

 

•

Operations in British Virgin Islands (closed Q3, 2020)

 

•

Equity-accounted investment in Thanachart Bank, Thailand (closed Q1, 2020)

 

•

Colfondos AFP, Colombia (closed Q1, 2020)

 

•

Operations in Puerto Rico and USVI (closed Q1, 2020)

 

•

Insurance and banking operations in El Salvador (closed Q1, 2020)

 

•

Banking operations in the Caribbean: Anguilla, Dominica, Grenada, St. Kitts & Nevis, St. Lucia, St. Maarten, St. Vincent & the Grenadines (closed Q4, 2019)

 

•

Insurance and pension operations in the Dominican Republic (closed Q2, 2019)

 

iii.

Day 1 provision for credit losses on acquired performing financial instruments, as required by IFRS 9. The accounting standard does not differentiate between originated and purchased performing loans and as such, requires the same accounting treatment for both. These credit losses are considered Acquisition-related costs in periods where applicable and are recorded in the International Banking segment. The provision for 2019 relates to Banco Cencosud, Peru and Banco Dominicano del Progreso, Dominican Republic.

 

2021 Scotiabank Annual Report  |  17

Management’s Discussion and Analysis

 

B.

Valuation-related adjustments, recorded in Q1, 2020:

The Bank modified its allowance for credit losses measurement methodology by adding an additional, more severe pessimistic scenario, consistent with developing practice among major international banks in applying IFRS 9, and the Bank’s prudent approach to expected credit loss provisioning. The modification resulted in an increase in provision for credit losses of $155 million which was recorded in Canadian Banking, International Banking, Global Wealth Management and Global Banking and Markets operating segments. The Bank enhanced its fair value methodology primarily relating to uncollateralized OTC derivatives which resulted in a pre-tax charge of $116 million. This charge was recorded in the Global Banking and Markets and Other operating segments. The Bank also recorded an impairment loss in the Other operating segment of $44 million pre-tax, related to one software asset.

 

18  |  2021 Scotiabank Annual Report

T1  Reconciliation of reported and adjusted results and diluted earnings per share

 

As at October 31 ($ millions)		2021				2020				2019
Reported Results
Net interest income		$	16,961			$	17,320			$	17,177
Non-interest income			14,291				14,016				13,857
Total revenue			31,252				31,336				31,034
Provision for credit losses			1,808				6,084				3,027
Non-interest expenses			16,618				16,856				16,737
Income before taxes			12,826				8,396				11,270
Income tax expense			2,871				1,543				2,472
Net income		$	9,955			$	6,853			$	8,798
Net income attributable to non-controlling interests in subsidiaries (NCI)			331				75				408
Net income attributable to equity holders			9,624				6,778				8,390
Preferred shareholders and other equity instrument holders			233				196				182
Net income attributable to common shareholders			9,391				6,582				8,208
Diluted earnings per share (in dollars)		$	7.70			$	5.30			$	6.68
Adjustments
Amortization of Acquisition-related intangible assets, excluding software(1)		$	103			$	106			$	116
Restructuring and other provisions(1)			188				–				–
Acquisition-related integration costs(1)			–				177				178
Net (gain)/ loss on divestitures(2)			–				(298	)			148
Day 1 provision for credit losses on acquired performing financial instruments(2)			–				–				151
Allowance for credit losses – Additional scenario(3)			–				155				–
Derivatives valuation adjustment(4)			–				116				–
Impairment charge on software asset(1)			–				44				–
Adjustments (Pre-tax)			291				300				593
Income tax expense/(benefit)			(77	)			(192	)			18
Adjustments (After tax)			214				108				611
Adjustments attributable to NCI			(10	)			(60	)			(50	)
Adjustments (After tax and NCI)		$	204			$	48			$	561
Adjusted Results
Net interest income		$	16,961			$	17,320			$	17,177
Non-interest income			14,291				13,819				13,984
Total revenue			31,252				31,139				31,161
Provision for credit losses			1,808				5,929				2,876
Non-interest expenses			16,327				16,514				16,422
Income before taxes			13,117				8,696				11,863
Income tax expense			2,948				1,735				2,454
Net income		$	10,169			$	6,961			$	9,409
Net income attributable to NCI			341				135				458
Net income attributable to equity holders			9,828				6,826				8,951
Preferred shareholders and other equity instrument holders			233				196				182
Net income attributable to common shareholders		$	9,595			$	6,630			$	8,769
Adjusted diluted earnings per share
Adjusted net income attributable to common shareholders		$	9,595			$	6,630			$	8,769
Dilutive impact of share-based payment options and others			48				38				160
Adjusted net income attributable to common shareholders (diluted)		$	9,643			$	6,668			$	8,929
Weighted average number of basic common shares outstanding (millions)			1,214				1,212				1,222
Dilutive impact of share-based payment options and others (millions)			11				31				29
Adjusted weighted average number of diluted common shares outstanding (millions)			1,225				1,243				1,251
Adjusted diluted earnings per share (in dollars)(5)		$	7.87			$	5.36			$	7.14
Impact of adjustments on diluted earnings per share (in dollars)		$	0.17			$	0.06			$	0.46

 

(1)	Recorded in non-interest expenses.

(2)	(Gain)/Loss on divestitures is recorded in non-interest income; costs related to divestitures are recorded in non-interest expenses.

(3)	Recorded in provision for credit losses.

(4)	Recorded in non-interest income.

(5)	Earnings per share calculations are based on full dollar and share amounts.

 

2021 Scotiabank Annual Report  |  19

Management’s Discussion and Analysis

 

T1A    Reconciliation of reported and adjusted results by business line

 

		For the year ended October 31, 2021(1)
($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported Results
Net interest income		$	8,030			$	6,625			$	628			$	1,436			$	242			$	16,961
Non-interest income			2,868				2,993				4,752				3,587				91				14,291
Total revenue			10,898				9,618				5,380				5,023				333				31,252
Provision for credit losses			333				1,574				2				(100	)			(1	)			1,808
Non-interest expenses			4,951				5,254				3,255				2,458				700				16,618
Income before taxes			5,614				2,790				2,123				2,665				(366	)			12,826
Income tax expense			1,459				635				549				590				(362	)			2,871
Net income		$	4,155			$	2,155			$	1,574			$	2,075			$	(4	)		$	9,955
Net income attributable to non-controlling interests in subsidiaries (NCI)			–				332				9				–				(10	)			331
Net income attributable to equity holders		$	4,155			$	1,823			$	1,565			$	2,075			$	6			$	9,624
Adjustments
Amortization of Acquisition-related intangible assets, excluding software(2)		$	22			$	45			$	36			$	–			$	–			$	103
Restructuring and other provisions(2)			–				–				–				–				188				188
Adjustments (Pre-tax)			22				45				36				–				188				291
Income tax expense/(benefit)			(6	)			(13	)			(9	)			–				(49	)			(77	)
Adjustments (After tax)			16				32				27				–				139				214
Adjustment attributable to NCI			–				–				–				–				(10	)			(10	)
Adjustments (After tax and NCI)		$	16			$	32			$	27			$	–			$	129			$	204
Adjusted Results
Net interest income		$	8,030			$	6,625			$	628			$	1,436			$	242			$	16,961
Non-interest income			2,868				2,993				4,752				3,587				91				14,291
Total revenue			10,898				9,618				5,380				5,023				333				31,252
Provision for credit losses			333				1,574				2				(100	)			(1	)			1,808
Non-interest expenses			4,929				5,209				3,219				2,458				512				16,327
Income before taxes			5,636				2,835				2,159				2,665				(178	)			13,117
Income tax expense			1,465				648				558				590				(313	)			2,948
Net income		$	4,171			$	2,187			$	1,601			$	2,075			$	135			$	10,169
Net income attributable to NCI			–				332				9				–				–				341
Net income attributable to equity holders		$	4,171			$	1,855			$	1,592			$	2,075			$	135			$	9,828

 

(1)	Refer to Business Line Overview on page 42.

(2)	Recorded in non-interest expenses.

 

20  |  2021 Scotiabank Annual Report

T1A  Reconciliation of reported and adjusted results by business line

 

		For the year ended October 31, 2020(1)
($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported Results
Net interest income		$	7,838			$	7,603			$	575			$	1,435			$	(131	)		$	17,320
Non-interest income			2,461				3,207				4,009				3,947				392				14,016
Total revenue			10,299				10,810				4,584				5,382				261				31,336
Provision for credit losses			2,073				3,613				7				390				1				6,084
Non-interest expenses			4,811				5,943				2,878				2,473				751				16,856
Income before taxes			3,415				1,254				1,699				2,519				(491	)			8,396
Income tax expense			879				182				437				564				(519	)			1,543
Net income		$	2,536			$	1,072			$	1,262			$	1,955			$	28			$	6,853
Net income attributable to non-controlling interests in subsidiaries (NCI)			–				92				10				–				(27	)			75
Net income attributable to equity holders		$	2,536			$	980			$	1,252			$	1,955			$	55			$	6,778
Adjustments
Amortization of Acquisition-related intangible assets, excluding software(2)		$	22			$	47			$	37			$	–			$	–			$	106
Acquisition-related integration costs(2)			–				154				23				–				–				177
Net (gain)/loss on divestitures(3)			–				–				–				–				(298	)			(298	)
Allowance for credit losses - Additional scenario(4)			71				77				1				6				–				155
Derivatives valuation adjustment(5)			–				–				–				102				14				116
Impairment charge on software asset(2)			–				–				–				–				44				44
Adjustments (Pre-tax)			93				278				61				108				(240	)			300
Income tax expense/(benefit)			(25	)			(78	)			(16	)			(29	)			(44	)			(192	)
Adjustments (After tax)			68				200				45				79				(284	)			108
Adjustment attributable to NCI			–				(32	)			–				–				(28	)			(60	)
Adjustments (After tax and NCI)		$	68			$	168			$	45			$	79			$	(312	)		$	48
Adjusted Results
Net interest income		$	7,838			$	7,603			$	575			$	1,435			$	(131	)		$	17,320
Non-interest income			2,461				3,207				4,009				4,049				93				13,819
Total revenue			10,299				10,810				4,584				5,484				(38	)			31,139
Provision for credit losses			2,002				3,536				6				384				1				5,929
Non-interest expenses			4,789				5,742				2,818				2,473				692				16,514
Income before taxes			3,508				1,532				1,760				2,627				(731	)			8,696
Income tax expense			904				260				453				593				(475	)			1,735
Net income		$	2,604			$	1,272			$	1,307			$	2,034			$	(256	)		$	6,961
Net income attributable to NCI			–				124				10				–				1				135
Net income attributable to equity holders		$	2,604			$	1,148			$	1,297			$	2,034			$	(257)			$	6,826

 

(1)	Refer to Business Line Overview on page 42.

(2)	Recorded in non-interest expenses.

(3)	(Gain)/loss on divestitures is recorded in non-interest income; costs related to divestitures are recorded in non-interest expenses.

(4)	Recorded in provision for credit losses.

(5)	Recorded in non-interest income.

 

2021 Scotiabank Annual Report  |  21

Management’s Discussion and Analysis

 

T1A    Reconciliation of reported and adjusted results by business line

 

		For the year ended October 31, 2019(1)
($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported Results
Net interest income		$	7,848			$	8,353			$	564			$	1,396			$	(984	)		$	17,177
Non-interest income			2,616				4,366				3,937				3,084				(146	)			13,857
Total revenue			10,464				12,719				4,501				4,480				(1,130	)			31,034
Provision for credit losses			972				2,076				–				(22	)			1				3,027
Non-interest expenses			4,772				6,596				2,905				2,463				1				16,737
Income before taxes			4,720				4,047				1,596				2,039				(1,132	)			11,270
Income tax expense			1,232				909				412				505				(586	)			2,472
Net income		$	3,488			$	3,138			$	1,184			$	1,534			$	(546	)		$	8,798
Net income attributable to non-controlling interests in subsidiaries (NCI)			–				373				18				–				17				408
Net income attributable to equity holders		$	3,488			$	2,765			$	1,166			$	1,534			$	(563	)		$	8,390
Adjustments
Amortization of Acquisition-related intangible assets, excluding software(2)		$	22			$	55			$	39			$	–			$	–			$	116
Acquisition-related integration costs(2)			–				151				27				–				–				178
Net (gain)/loss on divestitures(3)			–				–				–				–				148				148
Day 1 provision for credit losses on acquired performing financial instruments(4)			–			$	151				–				–				–				151
Adjustments (Pre-tax)			22				357				66				–				148				593
Income tax expense/(benefit)			(6	)			(103	)			(17	)			–				144				18
Adjustments (After tax)			16				254				49				–				292				611
Adjustment attributable to NCI			–				(66	)			–				–				16				(50	)
Adjustments (After tax and NCI)		$	16			$	188			$	49			$	–			$	308			$	561
Adjusted Results
Net interest income		$	7,848			$	8,353			$	564			$	1,396			$	(984	)		$	17,177
Non-interest income			2,616				4,366				3,937				3,084				(19	)			13,984
Total revenue			10,464				12,719				4,501				4,480				(1,003	)			31,161
Provision for credit losses			972				1,925				–				(22	)			1				2,876
Non-interest expenses			4,750				6,390				2,839				2,463				(20	)			16,422
Income before taxes			4,742				4,404				1,662				2,039				(984	)			11,863
Income tax expense			1,238				1,012				429				505				(730	)			2,454
Net income		$	3,504			$	3,392			$	1,233			$	1,534			$	(254	)		$	9,409
Net income attributable to NCI			–				439				18				–				1				458
Net income attributable to equity holders		$	3,504			$	2,953			$	1,215			$	1,534			$	(255)			$	8,951

 

(1)	Refer to Business Line Overview on page 42.

(2)	Recorded in non-interest expenses.

(3)	Loss/(gain) on divestitures are recorded in non-interest income; costs related to divestitures are recorded in non-interest expenses.

(4)	Recorded in provision for credit losses.

 

22  |  2021 Scotiabank Annual Report

International Banking business segment results are analyzed on a constant dollar basis. Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates. The following table presents the reconciliation between reported and constant dollar results for International Banking for prior periods. The Bank believes that constant dollar is useful for readers in assessing ongoing business performance. The tables below are computed on a basis that is different than the table “Impact of foreign currency translation” in Overview of Performance on page 30.

T2  Reconciliation of International Banking’s reported and adjusted results and constant dollar results

 

For the year ended October 31 ($ millions)		2020												2019
(Taxable equivalent basis)		Reported				Foreign exchange				Constant dollar				Reported				Foreign exchange				Constant dollar
Net interest income		$	7,603			$	543			$	7,060			$	8,353			$	1,031			$	7,322
Non-interest income			3,207				192				3,015				4,366				385				3,981
Total revenue			10,810				735				10,075				12,719				1,416				11,303
Provision for credit losses			3,613				244				3,369				2,076				283				1,793
Non-interest expenses			5,943				340				5,603				6,596				733				5,863
Income tax expense			182				23				159				909				107				802
Net Income		$	1,072			$	128			$	944			$	3,138			$	293			$	2,845
Net income attributable to non-controlling interest in subsidiaries		$	92			$	5			$	87			$	373			$	46			$	327
Net income attributable to equity holders of the Bank		$	980			$	123			$	857			$	2,765			$	247			$	2,518
Other measures
Average assets ($ billions)		$	206			$	12			$	194			$	201			$	21			$	180
Average liabilities ($ billions)		$	155			$	8			$	147			$	153			$	16			$	137

 

For the year ended October 31 ($ millions)		2020												2019
(Taxable equivalent basis)		Adjusted				Foreign exchange				Constant dollar adjusted				Adjusted				Foreign exchange				Constant dollar adjusted
Net interest income		$	7,603			$	543			$	7,060			$	8,353			$	1,031			$	7,322
Non-interest income			3,207				192				3,015				4,366				385				3,981
Total revenue			10,810				735				10,075				12,719				1,416				11,303
Provision for credit losses			3,536				239				3,297				1,925				255				1,670
Non-interest expenses			5,742				328				5,414				6,390				707				5,683
Income tax expense			260				29				231				1,012				122				890
Net Income		$	1,272			$	139			$	1,133			$	3,392			$	332			$	3,060
Net income attributable to non-controlling interest in subsidiaries		$	124			$	7			$	117			$	439			$	57			$	382
Net income attributable to equity holders of the Bank		$	1,148			$	132			$	1,016			$	2,953			$	275			$	2,678

 

2021 Scotiabank Annual Report  |  23

Management’s Discussion and Analysis

 

Earning assets

Earning assets are defined as income generating assets which include interest-bearing deposits with banks, trading assets, investment securities, investments in associates, securities borrowed or purchased under resale agreements, loans net of allowances, and customers’ liability under acceptances.

Non-earning assets

Non-earning assets are defined as cash and non-interest bearing deposits with financial institutions, precious metals, derivative financial instruments, property and equipment, goodwill and other intangible assets, deferred tax assets and other assets.

Core earning assets

Core earning assets are defined as earning assets excluding investments in associates, customers’ liability under acceptances, and trading assets, securities borrowed or purchased under resale agreements, and assets related to capital markets businesses.

Core net interest income

Core net interest income is defined as net interest income earned from core earning assets.

Net interest margin

Net interest margin is calculated as core net interest income for the business line divided by average core earning assets.

T3    Average earning assets, average total assets, average core earning assets and net interest margin by business line

 

For the year ended October 31, 2021 ($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Deposits with financial institutions		$	146			$	16,014			$	742			$	237			$	58,423			$	75,562
Trading assets			–				6,352				14				134,639				1,850				142,855
Securities purchased under resale agreements and securities borrowed			–				2,919				–				116,896				3				119,818
Investment securities including investments in associates			1,080				16,500				302				6,097				68,229				92,208
Net loans and acceptances			375,444				137,121				17,420				106,020				(4,143	)			631,862
Total earning assets		$	376,670			$	178,906			$	18,478			$	363,889			$	124,362			$	1,062,305
Non-earning assets			4,102				15,218				10,487				37,020				28,081				94,908
Total assets		$	380,772			$	194,124			$	28,965			$	400,909			$	152,443			$	1,157,213
Total earning assets			376,670				178,906				18,478				363,889				124,362				1,062,305
Less:
Investments in associates			783				1,646				–				–				62				2,491
Trading assets			–				5,812				–				134,372				1,849				142,033
Securities purchased under resale agreements and securities borrowed			–				–				–				116,829				–				116,829
Customers’ liability under acceptances			16,599				42				4,077				10,413				(14,679	)			16,452
Other deductions			–				642				–				21,681				10,484				32,807
Core earning assets		$	359,288			$	170,764			$	14,401			$	80,594			$	126,646			$	751,693
Net interest margin
Net interest income			8,030				6,625				628				1,436				242				16,961
Less: Non-core net interest income			–				50				–				138				2				190
Core net interest income		$	8,030			$	6,575			$	628			$	1,298			$	240			$	16,771
Net interest margin			2.23	%			3.85	%			4.36	%			1.61	%			nm	(1)			2.23	%
(1) Not meaningful.
For the year ended October 31, 2020 ($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Deposits with financial institutions		$	153			$	17,790			$	1,009			$	956			$	46,056			$	65,964
Trading assets			–				4,852				17				119,637				3,614				128,120
Securities purchased under resale agreements and securities borrowed			–				2,412				–				125,741				136				128,289
Investment securities including investments in associates			976				15,573				300				5,730				82,504				105,083
Net loans and acceptances			353,540				147,681				14,109				114,265				(3,957	)			625,638
Total earning assets		$	354,669			$	188,308			$	15,435			$	366,329			$	128,353			$	1,053,094
Non-earning assets			4,101				18,074				10,601				45,796				28,918				107,490
Total assets		$	358,770			$	206,382			$	26,036			$	412,125			$	157,271			$	1,160,584
Total earning assets			354,669				188,308				15,435				366,329				128,353				1,053,094
Less:
Investments in associates			713				1,868				–				–				87				2,668
Trading assets			–				4,399				–				119,395				1,113				124,907
Securities purchased under resale agreements and securities borrowed			–				–				–				125,701				–				125,701
Customers’ liability under acceptances			13,584				42				2,748				10,669				(10,996	)			16,047
Other deductions			–				1,194				–				18,296				7,294				26,784
Core earning assets		$	340,372			$	180,805			$	12,687			$	92,268			$	130,855			$	756,987
Net interest margin
Net interest income			7,838				7,603				575				1,435				(131	)			17,320
Less: Non-core net interest income			–				39				–				78				5				122
Core net interest income		$	7,838			$	7,564			$	575			$	1,357			$	(136	)		$	17,198
Net interest margin			2.30	%			4.18	%			4.53	%			1.47	%			nm	(1)			2.27	%
(1) Not meaningful.

 

24  |  2021 Scotiabank Annual Report