#Canada #Toronto #Financial Growth #EQB Inc. #EQ Bank

Overview of EQB Inc.'s Q2 2025 Results

On May 28, 2025, EQB Inc. (TSX: EQB) released its financial results for the second quarter of fiscal year 2025, highlighting robust growth in loan management and significant movement in assets under management (AUM) and assets under administration (AUA). With a total of $134 billion in combined assets, EQB remains a prominent player in the Canadian banking landscape, demonstrating resilience amid broader economic fluctuations.

Key Financial Highlights

EQB's Q2 performance boasts remarkable statistics, including:

• - Adjusted Return on Equity (ROE): 11.9%, indicating solid profitability compared to the reported 11.4%.
• - Adjusted Diluted Earnings Per Share (EPS): $2.31, reflecting an 18% decrease year-over-year due to previous high performance.
• - Total Revenue: $316.0 million, showing a slight decline of 0.2% year-over-year, with a 14% contribution from non-interest revenue.
• - Net Interest Income: Rose by 1% YoY to $271.1 million, supported by a net interest margin (NIM) increase to 2.20%.
• - Total AUM and AUA: Increased by 8% YoY, demonstrating EQB's strong market position.

Loan Growth and Portfolio Management

EQB reported an impressive growth trajectory in personal and commercial loan segments. The residential lending portfolio showed a strong performance, with a 28% YoY growth in single-family home originations. This momentum can be attributed to heightened application volumes spurred by revitalized market activity. The rigorous approach to credit and risk management maintained an average loan-to-value (LTV) ratio of 63%, alongside consistent borrower credit scores averaging 711.

Meanwhile, EQB's commercial lending segment emphasized insured lending for multi-unit residential properties. Over 80% of total commercial loans under management (LUM) were insured, reflected in a growth of 29% year-over-year in the CMHC-insured multi-unit residential segment.

Customer and Deposit Growth

The EQ Bank platform has made significant headway in acquiring new customers, welcoming 24,000 new users and bringing the total customer count to 560,000, marking a notable 23% increase YoY. This growth can be largely attributed to innovative banking solutions such as the EQ Bank Notice Savings Account, which continues to attract deposits through competitive offerings.

Strategic Focus amidst Economic Uncertainty

EQB's President and CEO Andrew Moor expressed optimism despite global and Canadian economic uncertainties. He highlighted the bank's successful navigation through challenging terrains, aided by strong fundamentals and a commitment to customer service. The subsequent focus remains on strategic innovations and effective capital management strategies to sustain long-term shareholder value.

Dividend Increases and Share Buybacks

In terms of shareholder returns, EQB declared a dividend of $0.53 per common share, reflecting an 18% increase year-over-year, accompanied by an active share repurchase program. This reinforces EQB's commitment to returning capital to shareholders while maintaining a robust capital ratio above 15%.

New Developments and Future Outlook

Nearing the conclusion of the second quarter, EQB opened its new national headquarters, the EQ Bank Tower in Toronto, signaling a significant step towards enhanced operational efficiency and a stronger collaborative environment for its employees. The initiative aims to foster a culture of innovation and technology excellence that aligns with EQB’s mission as Canada’s Challenger Bank.

Conclusion

EQB Inc.'s Q2 2025 results reflect a robust growth trajectory encompassing diversified loan management and innovative customer solutions. With strong asset growth and vigilant risk management, the institution is well-prepared to tackle potential challenges and seize emerging opportunities in the evolving financial landscape. As it navigates uncertainties, EQB remains steadfast in its dedication to enriching the lives of its customers through exceptional banking experiences.