P A C I F I C & W E S T E R N 2 ND QUARTER REVIEW JUNE 3, 2008

P A C I F I C & W E S T E R N

2ND QUARTER REVIEWJUNE 3, 2008


Advisory

• The Corporation occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, Annual Reports and other disclosure documents and communications. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. A number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian economy in general and the strength of local economies within Canada in which we conduct operations; the effect of changes in interest rates; the effects of competition in the markets in which we operate; capital market fluctuations; and the impact of changes in laws and regulations. When relying on forward-looking statements to make decisions, investors and others should carefully consider these factors and other uncertainties or potential events. The Corporation makes no undertaking to update any forward-looking statement that is made from time to time by the Corporation.


Our Mission

To maximize the value of our common shares and total

return to our shareholders over time, by providing

innovative financial solutions to our clients in selected

niche markets.

TSX SYMBOL: PWC


Our Model

Focus Niche markets not well served by large banks

Quality Seek low credit risk lending opportunities

Efficiency Use technology and existing distribution channels

Growth Seek markets with high growth potential


Our Strengths

• Extensive nationwide low cost funds source

• High quality portfolio with negligible losses

• Schedule 1 Canadian Bank Charter

• Very scalable infrastructure

• State of the art financial institution software


The Event

Unprecedented worldwide liquidity crisis in the banking industry sparked off by a melt down in

sub prime/asset backed securities market


The Challenges

• PWB’s cost of funds has increased like other Canadian Banks on average by about 70 basis points vs GOC Bond

• Mark to Market accounting rules is creating volatility and a recent reduction in our regulatory capital reducing lending capacity.


Benefits

• Significant reduction in competition in our lending markets

• Significant increase in loan spreads has more than offset our cost of funds increase

• High quality securities can be purchased with extra-ordinary spreads over our cost of funds

• Opportunity for synergistic acquisitions


Corporate Bond Spreads(BBB)

Canadian BBB Credit Spreads

0

50

100

150

200

250

300

4-Jan-99 4-Jan-00 4-Jan-01 4-Jan-02 4-Jan-03 4-Jan-04 4-Jan-05 4-Jan-06 4-Jan-07 4-Jan-08

bps

3yr

5yr

10yr


Our Cost of Funds

1-Year GOC vs. 1-Year PWB GIC Rate

3.00%

3.50%

4.00%

4.50%

5.00%

Nov-06

Dec-06

Jan-

07

Feb-0

7

Mar

-07

Apr-0

7

May

-07

Jun-

07

Jul-0

7

Aug-0

7

Sep-0

7

Oct-07

Average 1-Year GOC Bond YieldAverage 1-Year PWB GIC Rate


Our Cost of Funds

1-Year GOC vs. 1-Year PWB GIC Rate

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

Average 1-Year GOC Bond YieldAverage 1-Year PWB GIC Rate


Spreads

Spread of 1 year Tbill vs BA

0

10

20

30

40

50

60

70

80

1/2/

2007

3/2/

2007

5/2/

2007

7/2/

2007

9/2/

2007

11/2

/200

7

1/2/

2008

3/2/

2008

5/2/

2008

Date

Sp

read

Spread


1 Year GIC Rate Comparison

1 Year GIC Rate Comparison

3.05

3.10

3.15

3.20

3.25

3.30

3.35

3.40

3.45

3.50

3.55

3.60

3.65

Bank ofNovaScotia

CanadianWestern

Bank

AGF Trust HSBCBank

Canada

Pacific andWesternBank ofCanada

B2B Trust TorontoDominionMortgage

Corp

MapleTrust

EquitableTrust

HomeCapital

Issuer

An

nu

al G

IC (

%)


Special Initiatives

• Discovery Air• PW Plus Account• Visa Card• Versabanq Innovations


Discovery Air





Sample Card Design

Partner Company Logo

• PWB is in discussions with large national retailers with the mandate of creating a joint venture to issue a retailer-branded Visa Loyalty Credit Card

• National retailer brings brand recognition and existing distribution channels to effectively reach potential cardholders across the country.

• PWB brings Visa issuing ability, Schedule 1 Bank license and capability to manage all credit card activity including payment processing, customer call centre, risk and fraud.

• New retailer loyalty program embedded within the Visa card– Allows cardholders to earn value-based points/rewards on every purchase regardless of where the Visa

card is used.– Creates brand loyalty for the retailer as well as increases in-store traffic of customers returning to

redeem points and make additional purchases.– A valued rewards program helps make to get the PWB Visa card to the front of the wallet.

• Retailer would share in all revenues generated by the card and all costs to manage the program.

PWB / National Retailer Issued Visa Card

Retailer Brand Here

Retailer Brand Here


Versabanq Innovations


Versabanq Innovations– In discussions with numerous, very large potential partners in U.S. and Canada

– Strategy is to use existing distribution channels and enhance our partners’ relationship with their customer by filling blank spaces in or enhancing their product portfolio.

– Currently in joint development session with one of the largest banking software providers in the world

– Our products very well-suited to satisfy demands related to the current liquidity crisis (e.g., syndicated loans and efficient deposit gathering)

– Also provide built-in Basel II compliance which will soon be required in the U.S.


Our Securities

• Pacific & Western Credit Corp. (PWC)

• Common Shares PWC $5.30 (June 08)

• Preferred Shares PWC.PR.A $2.90 (Jun 08) (dividend .21)

• A Notes (04/10) PWC.NT.A $100.00 (Jun 08) (yield 9.25%)

• C Notes (10/08) PWC.NT.C $100.00 (Jun 08) (yield 9.0%)


Series C Note Arithmetic

Amount Spread Rate InterestRisk

Weight RWA

1,000,000 9.000% 90,000 9% Notes

15,000,000 3.500% 525,000 GICs

16,000,000 3.844% 615,000 Total

7,750,000 2.750% 6.250% 484,375 100% 7,750,000 Loans

6,550,000 1.200% 4.700% 307,850 20% 1,310,000 PSEs & AAAs

1,700,000 0.800% 4.300% 73,100 0% - CMHCs

16,000,000 5.408% 865,325 9,060,000

Net Interest 1.565% 250,325 BIS 11.038%

Return on Note 25.033%


Summary

• Highly efficient entrepreneurial Schedule 1 bank with

low risk strategy well positioned to take advantage of

the current liquidity crisis.


2ND QUARTER REVIEWJUNE 3, 2008

Documents

P A C I F I C & W E S T E R N 2 ND QUARTER REVIEW JUNE 3, 2008