Download PDF

1. Company Snapshot

1.a. Company Description

EQB Inc., through its subsidiary, Equitable Bank, provides personal and commercial banking services to retail and commercial customers in Canada.The company accepts term deposits and guaranteed investment certificates, high interest savings accounts, tax-free savings accounts, and institutional deposit notes, as well as specialized financing solutions.Its loan products include residential mortgages; equipment loans; home equity, cash surrender value, and commercial equity lines of credit; business enterprise solutions comprising mixed use, multi-residential properties, retail spaces, office condominiums, and industrial buildings; and asset repositioning, inventory, term, and construction loans.


The company also offers digital banking services, as well as a range of banking solutions, including international money transfers, US dollar accounts, and a suite of registered products.The company was formerly known as Equitable Group Inc.and changed its name to EQB Inc.


in June 2022.EQB Inc.was founded in 1970 and is headquartered in Toronto, Canada.

Show Full description

1.b. Last Insights on EQB

EQB Inc.'s recent performance was driven by strong Q1 2025 earnings, with net income increasing by CA$107.4m year-over-year. The company reported accelerated growth in loans under management and net interest income, as well as increasing non-interest revenue from higher multi-unit residential securitization and contributions from its alternative asset manager. Additionally, EQB increased its dividend by 21% year-over-year to CA$0.51, and announced a share buyback program, which can be considered a positive event for shareholders. The company also reported strong total AUM and AUA reaching $132 billion, and milestone adjusted EPS.

1.c. Company Highlights

2. EQB's Q3 2025 Earnings: A Challenging Quarter Amidst Macroeconomic Headwinds

EQB's financial performance in Q3 2025 was marked by a decline in revenue and net income, with revenues coming in at $310 million, down 2% quarter-over-quarter and 5% year-over-year. The net income for the quarter was $80.3 million, down 15% from Q2 and 32% year-over-year. Diluted EPS was $2.07, below expectations of $2.3. The decline in revenue was primarily driven by net interest income, which was $254 million, down 6% quarter-over-quarter. As David Wilkes noted, the influence of year-over-year declines in policy rates had a significant impact on net interest income.

Publication Date: Aug -29

📋 Highlights
  • Loans under Management Growth:: Increased 3% sequentially and 10% YoY to $74 billion, with conventional lending up 2% QoQ to $34.6 billion (+6% YoY).
  • Revenue and Earnings Decline:: Q3 revenue fell 2% QoQ and 5% YoY to $310 million; net income dropped 32% YoY to $80.3 million (Q2: $94.5 million).
  • Net Interest Income Drop:: Declined 6% QoQ and flat YoY to $254 million, driven by policy rate declines and lower residential lending margins.
  • ROE Guidance:: Year-to-date ROE at 12.4%, with full-year 2025 ROE projected at 11.5% (below historical 15-17% target) due to macroeconomic pressures.
  • Credit Risk Exposure:: Housing price declines of 25-30% in Toronto suburbs impacted 50 large-value mortgages, prompting cautious provisioning amid macroeconomic uncertainty.

Asset Quality and Credit Performance

EQB's asset quality and credit performance were impacted by the challenging macroeconomic environment. The company reported a deterioration in the personal lending portfolio, with concentrated issues in Toronto suburbs where high-value mortgages saw price declines of 25-30%. The provision for credit losses (PCL) was influenced by housing prices, macroeconomic environment, and idiosyncratic issues. Marlene Lenarduzzi explained that EQB's individualized loan assessment approach and provision setting based on loan characteristics contributed to the difference in impaired PCL trends compared to the big banks.

Valuation and Dividend Yield

EQB's valuation metrics provide insight into what's priced in. The Price-to-Tangible Book Value (P/TBV) is not directly available, but the Price-to-Book Ratio is 1.2, indicating a relatively reasonable valuation. The Dividend Yield is 2.21%, which is attractive for income investors. Given the challenging macroeconomic environment and the decline in EPS, it's essential to monitor EQB's progress in achieving its ROE target and its ability to maintain a stable dividend payout.

Outlook and Growth Prospects

Chadwick Westlake emphasized the need to allocate capital wisely, focusing on higher-growth areas, and hinted at potential restructuring to achieve efficiency goals. The company's guidance for fiscal 2025 ROE is around 11.5%, which is below the historical target of 15-17%. Analysts estimate next year's revenue growth at 5.6%, which will be crucial in achieving the target ROE. EQB's commercial mortgage-backed securities (CMB) program is expected to continue performing well, driven by the $60 billion government allocation.

3. NewsRoom

Card image cap

Equitable Bank applauds Government of Canada's progress on enabling greater competition in banking with Budget 2025

Nov -05

Source:

Card image cap

EQB to announce fourth quarter and fiscal 2025 results

Nov -05

Source:

Card image cap

A Fresh Look at EQ Bank (TSX:EQB) Valuation After Short-Term Share Price Rebound

Nov -01

Source:

Card image cap

Trade worries and economic uncertainty putting pressure on Canada's solopreneurs: EQ Bank survey

Oct -30

Source:

Card image cap

Equitable Bank reduces prime rate

Oct -29

Source:

Card image cap

EQB to cut its workforce by 8% in latest layoffs to hit Canada's banking sector

Oct -23

Source:

Card image cap

EQB announces strategic restructuring program that will impact Q4 2025 reported results

Oct -22

Source:

Card image cap

EQ Bank announces recipients of the 2025 Emerging Digital Artists Award

Oct -15

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Banking and Related Activities

Expected Growth: 4%

EQB Inc.'s 4% growth in Banking and Related Activities is driven by increasing demand for digital banking services, strategic partnerships, and expansion into new markets. Additionally, the company's focus on customer experience, investment in technology, and cost management initiatives have contributed to its growth.

7. Detailed Products

EQB Digital Banking Platform

A comprehensive digital banking solution that enables customers to manage their finances, pay bills, and transfer funds securely online or through mobile devices.

EQB Payment Gateway

A secure online payment processing system that enables businesses to accept payments online, in-store, or on-the-go.

EQB Card Services

A card issuance and management platform that enables financial institutions to issue, manage, and process card transactions.

EQB Lending Solutions

A lending platform that enables financial institutions to originate, underwrite, and manage loans, credit lines, and other credit products.

EQB Risk Management

A risk management platform that enables financial institutions to identify, assess, and mitigate risk across their operations.

EQB Data Analytics

A data analytics platform that enables financial institutions to gain insights into customer behavior, preferences, and needs.

8. EQB Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for EQB Inc. is medium due to the presence of alternative banking services and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the ease of switching to alternative banking services and the high demand for personalized services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the company's strong negotiating power.

Threat Of New Entrants

The threat of new entrants is medium due to the presence of regulatory barriers and the need for significant capital investment to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors and the need to differentiate services to attract and retain customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 85.92%
Debt Cost 4.17%
Equity Weight 14.08%
Equity Cost 12.11%
WACC 5.29%
Leverage 610.11%

11. Quality Control: EQB Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
E-L Financial

A-Score: 7.8/10

Value: 6.7

Growth: 6.8

Quality: 8.1

Yield: 10.0

Momentum: 8.0

Volatility: 7.3

1-Year Total Return ->

View Full Report
Stock-Card
Main Street Capital

A-Score: 7.5/10

Value: 4.8

Growth: 6.0

Quality: 7.6

Yield: 9.0

Momentum: 8.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
EQB

A-Score: 5.2/10

Value: 5.7

Growth: 5.4

Quality: 4.0

Yield: 4.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Mr. Cooper Group

A-Score: 5.2/10

Value: 3.8

Growth: 4.3

Quality: 6.7

Yield: 1.0

Momentum: 10.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
PennyMac Financial Services

A-Score: 5.1/10

Value: 6.0

Growth: 2.6

Quality: 6.6

Yield: 2.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Walker Dunlop

A-Score: 5.0/10

Value: 5.4

Growth: 3.9

Quality: 5.7

Yield: 6.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

96.71$

Current Price

96.71$

Potential

-0.00%

Expected Cash-Flows