Net income for the Bank of Nova Scotia reached $2.169 billion, last year, resulting in a return on equity of 17.3% and earnings per common share of $4.12. Shareholders saw a return on common shareholders’ equity – including dividends and appreciation in market value – of 3.7% in 2001 and a compound annualized return of 20.4% over the past 10 years.

2001 marked the 12th straight year of record operating results, despite considerable challenges – among them, weakening global economic conditions and the tragic events of Sept. 11.

Domestic Banking, which includes our wealth management operations, achieved a net income of $960 million, or 45% of total earnings in 2001. “While the domestic market is mature, we believe plenty of potential still exists to grow as a full-service provider of financial services and advice to Canadian families and small and medium-sized businesses,” say BNS CEO Peter Godsoe. “To fill existing gaps in meeting our customers’ investment needs and to direct them toward the bank’s broad array of wealth management services, we have created a new sales force of financial planners, which should number more than 400 by the end of 2002. We also launched five Scotia Private Client Group Centres this fall, bringing together teams of professionals from Scotiatrust, Scotia Cassels, and Private Banking to improve our service to affluent Canadians. Seven more centres will open early in 2002.”

Alternate delivery channels, particularly online banking, continue to grow, both in the variety of services offered and the number of users. “We will continue to Web-enable our operations and promote the use of alternate delivery channels in all of our businesses, to increase customer retention and further improve productivity. For consumers, we are using a broad range of integrated technologies to transform the Scotiabank Group’s retail delivery channels, products and services.”

During the year, says Godsoe, BNS met its key objective to integrate our delivery networks for both banking and brokerage services, including branches, ABMs, telephone and Internet. “In addition, we led the Canadian banking industry on several initiatives, such as a global ABM alliance and providing banking and discount brokerage services via Web TV.”

Scotia Capital, the bankÕs corporate and investment banking group, produced net income of $686 million, 32% of the Bank’s total. Our goal here is not to be the biggest, but the best at what we do. “In this regard, we have marked some significant successes: Euromoney rated us the number one Canadian bank, and the only one in the top 25 globally, for overall debt arranging; we were ranked as the top investment dealer in market share in the Canadian fixed income market by a leading consulting and research firm; and Brendan Wood International ranked us number one in overall franchise reputation. Ten of the all-star, top-ranked research analysts identified by Brendan Wood International work for Scotia Capital. We also led or participated in several innovative and significant transactions, both in Canada and globally – for example, a US$1 billion syndicated cross-currency swap to hedge a high-yield issue for Quebecor Media.”

The bankÕs international strategy is to continue to invest and grow in three key regions with solid, long-term potential – the Caribbean, Asia and Latin America. International Banking net income grew to $489 million in 2001, representing 23% of our total earnings.

Reflecting the weakened economy, the banks says it experienced some deterioration in the quality of our U.S. corporate loan portfolio, but moved early in the year to take strong corrective action.

“Financial sector reform legislation which passed in June 2001 contained several positives for the Bank. We are continuing to carefully assess a broad range of growth options. The potential to create solid long-term value for our shareholders, customers and employees will continue to drive all of our business strategies.”