Public statement relating to Settlement Agreement between the Central Bank of Ireland and Scotiabank (Ireland) Limited

• Date: 02 June 2011

PO BOX 559 T +353 1 224 4000

Dame Street F +353 1 671 6561

Dublin 2

Settlement Agreement between the Central Bank of Ireland

and Scotiabank (Ireland) Limited

The Central Bank of Ireland (“the Central Bank”) has entered into a Settlement Agreement

with effect from the 2nd June 2011 with Scotiabank (Ireland) Limited (“the firm”), a regulated

financial service provider in relation to breaches of regulation 16 of the European

Communities (Licensing and Supervision of Credit Institutions) Regulations 1992 and section

10 of the Central Bank Act 1971.

Five breaches were identified. These breaches related to:

1) The firm failing to provide accurate information in liquidity reporting returns from the

28th September 2007 to 27th June 2008 and from the 4th December 2009 to 5th March

2010 as a result of which there was a failure to comply with liquidity ratios in 14

returns during the first period.

2) The firm failing to have adequate controls and checks to verify the liquidity return

process.

The Central Bank reprimanded the firm and required it to pay a monetary penalty of

€600,000.

In 2008 the firm notified the Central Bank that the calculations of the quantitative liquidity

ratios performed by the firm were incorrect. Allowable discounted liquid assets were

overstated by US$300 million due to the inadvertent inclusion of certain Investment Grade

Securities in the calculation; the calculation of cash flows did not include all interest inflows