#Canada #Toronto #dividend increase #EQB Inc. #EQ Bank

EQB Inc. Achieves Record Earnings

EQB Inc. recently published impressive financial results for the fiscal year that concluded on October 31, 2024. The highlights of this year were driven by a remarkable 9% increase in loans from the previous year, bolstered by a substantial rise in non-interest income and a notable retention of EQ Bank customers, which exceeded half a million. The company’s President and CEO, Andrew Moor, expressed pride in the organization’s performance, stating, "This year marks our second decade as a publicly traded company and our most profitable year on record, with annual revenue surpassing $1 billion for the first time."

The growth trajectory was supported by a favorable outlook for personal and commercial lending in fiscal 2025, prompting EQB to raise its common share dividend while providing a growth forecast anchored in a more than 15% return on equity (ROE).

Despite the record earnings, the fourth quarter faced challenges primarily due to increased credit provisions in the bank’s equipment financing sector, which resulted from unforeseen credit exposures affecting the company’s overall profitability metrics. Adjusted ROE for the quarter reached 13.1%, while the full fiscal year reported a 15% ROE.

Financial Highlights

• - Adjusted Diluted Earnings Per Share: For Q4, it stood at $2.51, accumulating to $11.03 for FY24.
• - Book Value Per Share: Increased to $77.51, reflecting a 10% year-over-year growth.
• - Total Capital Ratio: Maintained at 15.6%, with a Common Equity Tier 1 Ratio of 14.3%.

In terms of customer engagement, EQ Bank experienced significant growth with over 28,000 new customers acquired in Q4 alone, elevating the total to more than 513,000 customers — an increase of 6% quarter-over-quarter and 28% year-over-year. This growth was largely attributed to the bank's innovative Notice Savings Account launched earlier in the year, which has proven to be effective in enhancing customer retention.

Looking Ahead

Looking towards 2025, EQB anticipates that favorable monetary policies will encourage loan origination growth, benefiting borrowers overall. The bank intends to continue promoting its high-interest, no-fee banking offerings to capture additional market share.

Commenting on their strategic mission, Mr. Moor said, "I thank all members of Canada's Challenger Bank™ for driving change in Canadian banking to enrich people's lives with the innovation and value for which we are known."

Additionally, EQB’s diversified approach is evident in its commitment to reducing risks associated with its equipment financing segment, including a strategic shift toward better credit quality lending. Overall, EQB remains focused on positioning itself for continued strength and growth moving into the future.

With new products such as the Beta launch of the EQ Bank Business Account targeting Canadian small business owners, and recognition as Brand of the Year by strategy magazine, EQB's initiatives signal a promising future.

In summary, EQB Inc.’s record-setting year in 2024 reflects its strategic focus on innovation and customer engagement while preparing the groundwork for sustained growth and profitability in the coming fiscal year.