Mr. Brian Porter reports

SCOTIABANK TO ACQUIRE MD FINANCIAL MANAGEMENT AND ENTER INTO AFFINITY AGREEMENT WITH THE CANADIAN MEDICAL ASSOCIATION, ANNOUNCES COMMON SHARE OFFERING

Bank of Nova Scotia (Scotiabank) has agreed to acquire the Canadian Medical Association's (CMA) MD Financial Management (MD), Canada's leading provider of financial services to physicians and their families, with more than $49-billion in assets under management and administration. The purchase price of $2,585-million is payable in cash at the closing of the acquisition. A public offering of 19.7 million common shares at $76.15 per share on a bought deal basis for gross proceeds of $1.5-billion will finance a portion of the purchase price for the acquisition.

At the closing of the acquisition, Scotiabank and CMA will enter into a 10-year collaboration, pursuant to which CMA will exclusively promote Scotiabank as the preferred provider of financial products and services to physicians and their families in Canada, and, as part of the arrangement, both parties will jointly support philanthropic initiatives and other programs for physicians and the communities they serve.

"MD has served the distinct financial needs of Canada's physician community for decades and has delivered strong results," said Brian Porter, president and chief executive officer at Scotiabank. "Through this transaction, MD clients will benefit from a greatly expanded range of financial solutions, including access to expertise across our wealth and asset management businesses. We look forward to providing customized banking services to a wider segment of the physician community in support of their unique needs."

"In tandem with this acquisition, we are also pleased to enter into an affinity agreement with the CMA," added James O'Sullivan, group head, Canadian banking. "Under the terms of this agreement, Scotiabank will invest $115-million over the next 10 years to support the advancement of the medical profession and health care in Canada. Scotiabank has a strong tradition of supporting the medical community and is proud to substantially enhance that commitment to help underscore CMA's strategic vision of a vibrant profession and a healthy population."

"We are confident that Scotiabank will deliver a strong future for MD Financial Management and its clients, and we're excited to work with them through an unprecedented 10-year collaboration to deliver a better future of health for physicians and their patients," said Dr. Brian Brodie, board chair of CMA.

"With its existing capabilities in investment management and digital banking, its track record of philanthropy, and its team-based approach to wealth management that addresses the entirety of a client's life, Scotiabank is the best-possible partner to help continue MD's proud history of meeting the specific needs of Canada's physicians and their families," said Brian Peters, MD's president and chief executive officer.

Additional details of the acquisition

Scotiabank's common equity Tier 1 capital ratio will be impacted by approximately 30 basis points.

MD Financial Management will operate as a distinct, stand-alone brand within Scotia Wealth Management, with its existing people and management team in place.

Subject to regulatory approvals and closing conditions, the acquisition is expected to close in fiscal Q4 2018.

Scotiabank's global banking and markets division and J.P. Morgan acted as financial adviser to Scotiabank on the acquisition while Torys LLP acted as Scotiabank's legal adviser.

Additional details of the offering

Scotiabank has agreed to sell the 19.7 million common shares to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. Scotiabank has granted to the underwriters an option to purchase up to an additional three million common shares, which option is exercisable, in whole or in part, by the underwriters any time up to 5 p.m. Toronto time on a date that is 30 days after the closing date of the offering. The maximum gross proceeds raised under the offering will be $1.73-billion should the overallotment option be exercised in full.

Closing of the offering is expected to occur on or after June 8, 2018. The net proceeds will be used by Scotiabank to finance a portion of the purchase price for the acquisition of MD.

The common shares will be issued in Canada by way of a prospectus supplement that will be filed with the securities regulatory authorities in Canada under Scotiabank's July 7, 2016, base shelf prospectus.

Conference call

A conference call will take place on May 31, 2018, at 4:30 p.m. ET. Interested parties are invited to access the call live, in listen-only mode, by telephone at 647-794-1828 or toll-free at 1-888-632-5004, passcode 052905 followed by the number sign (please call five to 15 minutes in advance). In addition, an audio webcast with accompanying slide presentation may be accessed through the investor relations page on Scotiabank's website. Following discussion of the acquisition by Scotiabank executives, there will be a question-and-answer session.

A telephone replay of the conference call will be available between May 31, 2018, and June 15, 2018, by calling 647-436-0148 or 1-888-203-1112 (North America toll-free) and entering the access code 1926951 followed by the number sign.

About Bank of Nova Scotia

Scotiabank is Canada's international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, Europe, and Asia-Pacific. The bank has a team of more than 89,000 employees and assets of over $926-billion (as at April 30, 2018).

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