Bank builds on 100 years of serving customers with decisive growth in this market

TORONTO and SAN JUAN, April 30 /CNW/ - Scotiabank de Puerto Rico is pleased to announce an acquisition that will enable the Bank to grow decisively in the Puerto Rican market. The Federal Deposit Insurance Corporation (FDIC) has confirmed that Scotiabank de Puerto Rico will acquire the banking operations, including the customer deposits, of R-G Premier Bank of Puerto Rico. The transaction is effective immediately.

Under the terms of the transaction:

-   Scotiabank acquires US$5.6 billion in assets including US$5.3 billion
        in loans covered under a loss-sharing agreement with the FDIC.
    -   Through this agreement, the FDIC guarantees 80 per cent of loan
        losses.
    -   The acquisition also includes US$2.2 billion in deposits. The FDIC is
        providing additional funding to balance the acquired assets.
    -   This transaction will result in an immediate positive contribution to
        earnings for Scotiabank Group but is not material to current earnings
        or capital.

"As we celebrate 100 years of operating in Puerto Rico, we are very pleased to build on our long history of serving our customers, employees and communities here with this acquisition," said Rick Waugh, Scotiabank President and CEO. "This announcement will increase our market share to approximately nine per cent and is consistent with Scotiabank's international strategy to grow incrementally to scale in target markets. Scotiabank has an international scope that few banks match, and we look forward to leveraging our strengths and expertise to benefit the ongoing operations of the new bank."

R-G Premier Bank of Puerto Rico has 29 branches and 61 ATMs and Scotiabank de Puerto Rico has 17 branches and 60 ATMs. The consolidation will begin immediately and Scotiabank is committed to a seamless transition.

"Customers should feel confident that their bank deposits and transactions with Scotiabank are both safe and secure," said Mr. Waugh. "Scotiabank is one of North America's premier financial institutions, known for its strength and stability, and has a long history of serving the Puerto Rican market."

The deposits of R-G Premier Bank customers will continue to be insured by the FDIC up to the insurance limit. Customers can continue to bank at these locations and will be served by the same friendly teams. Customers can continue to access their money by writing checks, using ATMs or using their debit cards. Checks drawn on R-G Premier Bank will continue to be processed and loan customers should continue to make their payments as usual.

"We look forward to welcoming our new R-G Premier Bank customers and employees as we take a larger role in the country's banking sector," said Troy Wright, Chief Executive Officer, Scotiabank de Puerto Rico. "As we bring this bank into the Scotiabank de Puerto Rico family, we begin a new chapter in our long history here and we are excited about the possibilities that today's announcement brings.

"Tomorrow will be business as usual. Branches that were scheduled to open tomorrow will do so. Customers will see the same friendly faces and can continue using the banking services that they now use. We are committed to leveraging our significant experience in international acquisitions to provide a smooth transition for all of our new and existing customers and employees and as we move through the transition phase, we will look at the best practices of each of the banks to bring our customers exceptional products, lending, services and expertise."

More information on the transaction can be found in the investor relations presentation at www.scotiabank.com .

Customers looking for more information are invited to:

-   Visit the Scotiabank de Puerto Rico website at
        www.scotiabankpr.com/bienvenidos
    -   Call our customer contact centres at:
        -   Scotiabank de Puerto Rico: 787-766-4999 or 1-877-766-4999
        -   R-G Bank 787-766-8123
    -   Customers who have questions about today's transaction can call the
        FDIC toll-free at 1-800-591-2904. The phone number will be
        operational this evening until 9:00 p.m., Atlantic Standard Time
        (AST); on Saturday from 9:00 a.m. to 6:00 p.m., AST; on Sunday from
        noon to 6:00 p.m. AST; and thereafter from 8:00 a.m. to 8:00 p.m.,
        AST. Interested parties also can visit the FDIC's Web site at
        http://www.fdic.gov/bank/individual/failed/r-gpremier-puertorico.html
        or http://www.fdic.gov/bank/individual/failed/r-gpremier-
        puertorico_spanish.html.
    -   The FDIC encourages all bank customers to review more information
        about the transaction by visiting www.fdicseguro.gov.

Scotiabank has been part of the Caribbean and Central America since 1889. It is now the leading bank in the region, with operations in 27 countries, including affiliates. The Bank has more than 12,000 employees in the region, including affiliates, serving more than two million customers, with 550 branches, kiosks and other offices, plus about 974 ATMs.

Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With close to 68,000 employees, Scotiabank Group and its affiliates serve approximately 14.6 million customers in some 50 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking. With more than $507 billion in assets (as at January 31, 2010), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.

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; significant market volatility and interruptions; the failure of third parties to comply with their obligations to us and our affiliates; the effect of changes in monetary policy; legislative and regulatory developments in Canada and elsewhere, including changes in tax laws; the effect of changes to our credit ratings; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions and liquidity regulatory guidance; operational and reputational risks; the risk that the Bank's risk management models may not take into account all relevant factors; 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 62 of the Bank's 2009 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.

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

http://smr.newswire.ca/en/scotiabank/scotiabank-de-puerto-rico-acquires-operations-of-r-g

Backgrounder
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    Scotiabank Group

    -   Today Scotiabank is one of North America's premier financial
        institutions and Canada's most international bank.
    -   With close to 68,000 employees, Scotiabank and its affiliates serve
        approximately 12.8 million customers through nearly 2,700 branches
        and offices in some 50 countries.
    -   Scotiabank - with its three major business lines - exceeded all of
        its key financial and operational targets in achieving record
        earnings in 2009, with net income available to common shareholders of
        C$3.547 billion, up 13 per cent from 2008.
    -   Scotiabank was rated by Oliver Wyman Consulting Group as one of the
        "top ten most stable financial institutions in the world" during the
        economic crisis.
    -   With more than $507 billion in assets (as at January 31st, 2010),
        Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS).

    Scotiabank International Banking

    -   International banking encompasses Scotiabank's retail and commercial
        banking operations in more than 40 countries outside Canada - an
        international presence unmatched by our domestic competitors.
    -   More than 46,000 employees, including subsidiaries and affiliates,
        provide a full range of financial services to over five million
        customers through a network of 1,916 branches and offices, 3,532
        automated banking machines (ABMs), telephone and Internet banking,
        in-store banking kiosks and specialized sales forces. The Bank
        operates in the following geographic regions: the Caribbean and
        Central America, Mexico, Latin America and Asia.

    Scotiabank in the Caribbean

    -   Scotiabank has been part of the Caribbean and Central America since
        1889. It is now the leading bank in the region, with operations in 27
        countries, including affiliates. The Bank has more than 12,000
        employees in the region, including affiliates, serving more than two
        million customers, with 550 branches, kiosks and other offices, plus
        about 974 automated banking machines.

    Scotiabank de Puerto Rico

    -   Scotiabank de Puerto Rico is a wholly owned subsidiary of The Bank of
        Nova Scotia, operating in Puerto Rico since 1910, and has maintained
        a leadership position in the corporate and commercial banking,
        mortgage lending and automotive financing. With a network of 17
        branches throughout the Island and some 500 employees, Scotiabank de
        Puerto Rico provides corporate, commercial and retail banking
        services to over 80,000 customers.

    R-G Premier Bank

    -   With 29 branches in 16 townships across the Island, R-G Premier Bank
        employs approximately 1,200 people and has almost 500,000 customers.
        Banking activities include commercial and retail banking services,
        corporate and construction lending, consumer lending and credit
        cards, a range of deposit products and, to a lesser extent,
        investment services.

    FDIC assisted transactions

    -   For strong and stable banks, an FDIC-assisted transaction poses an
        attractive alternative to a traditional acquisition. In an FDIC-
        assisted transaction, a healthy bank can acquire deposits from a
        failed bank at relatively low or zero premium. The acquiring bank can
        also protect through a loss-sharing agreement with the FDIC.
    -   The transaction process is similar to a traditional bank acquisition,
        but the terms of this transaction are unique in that the FDIC agrees
        to absorb a significant portion of the loss-typically 80 percent.
        Scotiabank is liable for the remaining portion of the loss.