EQB releases Q3 2025 financial results and increases dividend 17% y/y
TORONTO, Aug. 27, 2025 /PRNewswire/ - EQB Inc. (TSX:EQB) today reported earnings for the three and nine months ended July 31, 2025. Earnings reflected continued growth in loans under management2, expanding originations and strong customer engagement in EQ Bank, however an unfavourable macroeconomic landscape and pressure in real estate markets continued to impact EQB earnings in Q3. This manifested in higher credit provisions and corresponding lower expectations for earnings for the remainder of fiscal 2025.
Q3 2025 highlights compared to Q3 2024:
Adjusted net income1: $80.3 million, -32% y/y, -15% q/q (reported $73.4 million, -35% y/y, -19% q/q)
Adjusted revenue1: $310 million, -5% y/y, -2% q/q (reported $306.1 million, -6% y/y, -3% q/q) with non-interest revenue contributing 18% of total
Adjusted net interest income (NII)1: $254 million, -6% y/y & q/q (reported $250 million, -8% y/y & q/q)
Adjusted net interest margin (NIM)1,2: 1.95%, -14 bps y/y, -25 bps q/q (reported 1.92%, -17 bps y/y, -28 bps q/q)
Total AUM + AUA2 : $137 billion, +9% y/y, +2% q/q
EQ Bank customers: +21% y/y, +5% q/q to 586,000
Book value per share: $82.37, +9% y/y, +2% q/q
Common share dividends declared: $0.55 per share, +17% y/y, +4% q/q
YTD 2025 (nine months) highlights compared to YTD 2024:
Adjusted ROE1: 12.4% (reported 11.6%)
Adjusted diluted EPS1: $7.36, -14% y/y (reported $6.88, -16% y/y)
Adjusted net income1: $290.7 million, -14% y/y (reported $271.4 million, -16% y/y)
Total capital ratio: 15.7% and CET1 ratio of 13.3%
"This was a difficult quarter for EQB as we mourned the loss of Andrew Moor. Turning to performance, while not unique to EQB, macroeconomic uncertainty and housing market conditions in Canada continued to weigh on credit performance and interest income," said Marlene Lenarduzzi, who acted as interim President and CEO during the quarter. "However, the resilience of our business model was underscored by clear loan book growth and expanding EQ Bank customer engagement. Our balance sheet is strong, and we are positioned for growth with Chadwick Westlake's appointment as our next chapter begins."
"It is an incredible privilege to join EQB this week as CEO, and my thanks to Marlene for her exceptional leadership. My focus over the coming months will include listening closely to stakeholders across Canada, sharpening our strategy and moving quickly where Canada's Challenger Bank will win to our full potential," said Chadwick Westlake, President and CEO. "We have charted our own course for over 50 years by focusing on the long-term, innovating with purpose and delivering for Canadians in ways that matter. That commitment remains unchanged. I am confident in our ability to build momentum and seize the opportunities ahead that will create better competition and options for Canadians, with earnings growth and leading returns for our shareholders."
New executive leadership team appointments set stage for clear growth agenda
Effective August 25, 2025, accomplished bank industry executive Chadwick Westlake became President and CEO and joined the Company's board of directors
As planned, Marlene Lenarduzzi returned to her role as Chief Risk Officer, having previously served as interim CEO following the death of Andrew Moor in June 2025
Anilisa Sainani appointed SVP and Chief Financial Officer, effective August 28, 2025; Ms. Sainani brings over two decades of diverse banking experience, most recently with RBC as Chief Operating Officer, CFO Group, and VP Finance, Chief Accountant, and is a nationally recognized financial leader as a CPA Fellow and Canada's Top 40 Under 40 recipient
David Wilkes appointed to the new role of SVP and Chief Strategy & Growth Officer, effective August 28, 2025; uniquely equipped to deliver on EQB's bold growth agenda, Mr. Wilkes draws on 20 years of experience in banking and strategic leadership, joining EQB in 2022 from McKinsey & Company, where he was a Partner, and has since been a leader in the Bank's finance, strategy, corporate development and M&A, regulatory reporting and productivity functions
EQ Bank welcomes 26,000 new customers, bringing total to 586,000 +21% y/y, 5% q/q
EQ Bank continued to attract significant new customer interest with signups increasing 13% from Q1 and 7% from Q2; demand deposit growth accelerated, driven by the Notice Savings Account and payroll customer deposits, and overall deposits marked among the strongest q/q growth in the last three years to $9.7 billion
Continued increase in payroll customers further cements EQ Bank's position as bank of choice and go-to source for innovative banking options
EQ Bank Card reached a milestone of $1 billion in funds loaded as Canadians continue to embrace the domestic and international convenience of this no-fee, no added FX and interest-bearing prepaid card
Personal Lending portfolio benefits from strong uninsured single-family origination growth, driving uninsured loans under management2 to $24.4 billion +8% y/y, 2% q/q
Single-family uninsured originations increased +30% y/y with strong retention rates despite a complex macroeconomic environment as the Bank maintains its disciplined approach to underwriting, deepens its relationships with broker partners and continues to capture market share
Decumulation lending (reverse mortgages and insurance lending) grew to $2.7 billion +41% y/y, +8% q/q, representing continued consumer demand and appreciation for differentiated, flexible solutions that support older Canadians including homeowners who wish to live in place on their terms
Commercial Banking portfolio enjoys continued leadership in insured multi-unit residential lending
The Bank reinforced its focus on multi-unit residential lending in major Canadian cities, maintaining a strong risk profile with more than 80% of commercial loans under management (LUM)2 insured under CMHC programs
CMHC-insured multi-unit residential LUM2 grew +30% y/y, +8% q/q to $31.4 billion supported by ongoing demand for rental apartment construction and strong originations
EQB's insured commercial construction lending portfolio grew +28% y/y, +6% q/q to $3.5 billion with new originations and draws related to construction financing
Provisions align with macroeconomic uncertainty as new formation rates show continued moderation
EQB's provision for credit losses (PCL) was $34.0 million in Q3, attributable to macroeconomic uncertainty, alongside delayed resolutions and weaker market values of secured assets
Net impaired loans increased by $33.3 million in Q3 to $775 million, or 164 bps of total loan assets compared to 156 bps at Q2, 109 bps at Q3 2024; increase was driven by housing market pressure and delayed resolution times, while impaired formations slowed in Q3
The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 33 bps, compared to 29 bps at Q2 2025 and 26 bps at Q3 2024; the increase in net allowance rate was across all segments and driven by ongoing macroeconomic uncertainty
EQB increases common share dividend by 17% y/y, supported by diligent capital generation and allocation structure
EQB's Board of Directors declared a dividend of $0.55 per common share payable on September 30, 2025, to shareholders of record as of September 15, 2025, representing 17% increase from the dividend paid in September 2024
"While earnings and ROE did not meet our expectations in Q3, we were pleased with performance in our core lending markets and the continued momentum in EQ Bank customers and deposit growth," said David Wilkes, Chief Strategy & Growth Officer. "We have strong capital and liquidity, and we have continued to deploy capital where risk-adjusted returns are most favourable, delivering growth in both our uninsured and insured portfolios. With year-to-date financial results in mind, including the elevated PCLs and higher business investment, we are correspondingly reducing our expectations for the remainder of this fiscal year, however our medium-term targets remain consistent."
Analyst conference call and webcast: 10:30 a.m. ET August 28, 2025Vincenza Sera, EQB Board Chair; Chadwick Westlake, President and CEO; Marlene Lenarduzzi, CRO; and David Wilkes, Chief Strategy & Growth Officer, will host EQB's third quarter earnings call and webcast. The listen-only webcast with accompanying slides will be available at eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.
1 Adjusted measures and ratios are Non-Generally Accepted Accounting Principles (GAAP) measures and ratios. Adjusted measures and ratios are calculated in the same manner as reported measures and ratios, except that financial information included in the calculation of adjusted measures and ratios is adjusted to exclude the impact of one-time acquisition and integration related costs, and certain items which management determines would have a significant impact on a reader's assessment of business performance. For additional information and a reconciliation of reported results to adjusted results, see the "Non-GAAP financial measures and ratios" section.
2 These are non-GAAP measures, see the "Non-GAAP financial measures and ratios" section.
3 PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheet (unaudited)
($000s) As at
July 31 2025
October 31, 2024
July 31, 2024
Assets:
Cash and cash equivalents
485,757
591,641
509,608
Restricted cash
1,218,685
971,987
904,196
Securities purchased under reverse repurchase agreements
1,949,171
1,260,118
1,339,578
Investments
1,731,462
1,627,314
1,806,413
Loans, Personal
32,297,598
32,273,551
32,584,931
Loans, Commercial
14,890,241
14,760,367
15,372,643
Securitization retained interests
999,729
813,719
738,986
Deferred tax assets
19,967
36,104
30,481
Other assets
969,034
899,120
782,900
Total assets
54,561,644
53,233,921
54,069,736
Liabilities and Shareholders' Equity
Liabilities:
Deposits
36,360,714
33,739,612
33,258,969
Securitization liabilities
12,498,948
14,594,304
14,919,830
Obligations under repurchase agreements
148,623
-
-
Deferred tax liabilities
204,296
177,933
161,025
Funding facilities
1,385,306
946,956
1,803,221
Other liabilities
652,199
636,931
681,213
Total liabilities
51,250,086
50,095,736
50,824,258
Shareholders' Equity:
Preferred shares
-
-
181,411
Common shares
512,172
505,876
501,594
Other equity instruments
147,360
147,440
147,808
Contributed deficit
(15,034)
(17,374)
(25,801)
Retained earnings
2,656,635
2,483,309
2,432,426
Accumulated other comprehensive income (loss)
2,035
8,555
(3,964)
Total equity attributable to equity holders of EQB
3,303,168
3,127,806
3,233,474
Non-controlling interests
8,390
10,379
12,004
Total equity
3,311,558
3,138,185
3,245,478
Total liabilities and shareholders' equity
54,561,644
53,233,921
54,069,736
Consolidated statement of income (unaudited)
Three months ended
Nine months ended
($000s, except per share amounts)
July 31, 2025
July 31, 2024
July 31, 2025
July 31, 2024
Interest income:
Loans, Personal
463,555
501,420
1,406,262
1,452,673
Loans, Commercial
217,209
256,788
651,317
777,511
Investments
12,899
16,432
38,557
51,187
Other
24,727
32,210
70,009
81,518
718,390
806,850
2,166,145
2,362,889
Interest expense:
Deposits
334,109
387,208
999,309
1,111,772
Securitization liabilities
122,502
132,810
360,147
391,839
Funding facilities
11,703
12,773
22,015
41,577
Other
34
2,692
187
22,986
468,348
535,483
1,381,658
1,568,174
Net interest income
250,042
271,367
784,487
794,715
Non-interest revenue:
Fees and other income
24,747
22,561
70,380
59,740
Net gains on loans and investments
521
6,145
3,854
18,267
Gain on sale and income from retained interests
26,468
22,755
71,430
65,341
Net gains on securitization activities and derivatives
4,351
4,410
14,563
4,607
56,087
55,871
160,227
147,955
Revenue
306,129
327,238
944,714
942,670
Provision for credit losses
33,968
21,274
82,880
59,026
Revenue after provision for credit losses
272,161
305,964
861,834
883,644
Non-interest expenses:
Compensation and benefits
79,791
69,912
230,005
202,242
Other
91,163
80,657
261,394
238,232
170,954
150,569
491,399
440,474
Income before income taxes
101,207
155,395
370,435
443,170
Income taxes:
Current
13,455
44,083
56,412
115,351
Deferred
14,388
(842)
42,657
5,567
27,843
43,241
99,069
120,918
Net income
73,364
112,154
271,366
322,252
Dividends on preferred shares
-
2,351
-
7,054
Distribution to LRCN holders
-
-
4,410
-
Net income available to common shareholders and non-controlling interests
73,364
109,803
266,956
315,198
Net income attributable to common shareholders and non-controlling interest:
Common shareholders
73,014
109,538
265,949
314,454
Non-controlling interests
350
265
1,007
744
73,364
109,803
266,956
315,198
Earnings per share:
Basic
1.91
2.86
6.93
8.24
Diluted
1.90
2.84
6.88
8.17
Consolidated statement of comprehensive income (unaudited)
Three months ended
Nine months ended
($000s)
July 31, 2025
July 31, 2024
July 31, 2025
July 31, 2024
Net income
73,364
112,154
271,366
322,252
Other comprehensive income, items that will be reclassified subsequently to income:
Debt instruments at Fair Value through Other Comprehensive Income:
Net change in (losses) gains on fair value
(11,334)
34,658
4,693
59,979
Reclassification of net losses (gains) to income
13,075
(31,278)
1,486
(49,918)
Other comprehensive income, items that will not be reclassified subsequently to income:
Equity instruments designated at Fair Value through Other Comprehensive Income:
Net change in gains on fair value
-
534
868
2,086
Reclassification of net losses (gains) to retained earnings
-
490
(868)
490
1,741
4,404
6,179
12,637
Income tax expense
(639)
(1,194)
(1,928)
(3,427)
1,102
3,210
4,251
9,210
Cash flow hedges:
Net change in unrealized gains (losses) on fair value
5,501
(23,284)
(7,688)
(23,553)
Reclassification of net gains to income
(6,954)
(2,844)
(16,315)
(14,608)
(1,453)
(26,128)
(24,003)
(38,161)
Income tax recovery
3
7,084
6,083
10,366
(1,450)
(19,044)
(17,920)
(27,795)
Total other comprehensive loss
(348)
(15,834)
(13,669)
(18,585)
Total comprehensive income
73,016
96,320
257,697
303,667
Total comprehensive income attributable to:
