Bank sees big results across the board
Equitable Bank (EQB) said it has achieved its most profitable year on record, with annual revenue surpassing $1 billion for the first time.
The bank’s performance was driven by a 9% annual growth in loans under management, an increase in non-interest revenue, and a 28% year-over-year rise in EQ Bank customer accounts, which now exceed 513,000.
EQB's financial performance included a 14% year-over-year increase in total assets under management and administration, which reached $127 billion. The bank’s book value per share grew 10% from the prior year, reaching $77.51. In addition, EQB increased its quarterly dividend by 4%, a 23% year-over-year rise.
"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," said EQB president and CEO Andrew Moor.
EQB maintained its focus on residential property lending. Multi-unit residential properties insured through Canada Mortgage and Housing Corporation (CMHC) programs grew by 30% year-over-year to $26.1 billion. This segment now represents 81% of the bank’s commercial loans under management.
Despite a record-breaking fiscal year, EQB faced pressures in the fourth quarter due to elevated provisions for credit losses (PCLs) in its equipment financing portfolio. These losses, including those tied to a specific exposure, resulted in a higher-than-expected impact on Q4 results. As a response, EQB implemented measures to de-risk this portfolio, focusing on higher-quality credit exposures.
The bank shifted away from lower-margin insured mortgages in its single-family segment, resulting in a 7% decline in insured lending to $9.2 billion. Uninsured lending, however, saw a modest 1% increase, reaching $20 billion, supported by strong customer retention.
The decumulation lending segment, which includes reverse mortgages, experienced rapid growth, climbing 47% year-over-year to $2.1 billion. This expansion was fuelled by successful consumer advertising campaigns and enhanced broker services.
Net impaired loans increased to $623.7 million by the end of the fiscal year, reflecting 132 basis points of total loan assets, up from 76 basis points in the prior year. Half of this increase was tied to a single commercial loan.
EQB expects a decline in impaired loans during the latter half of 2025 as its resolution efforts progress. Credit loss provisions for fiscal 2024 totalled $89.2 million, with 71% attributable to equipment financing.
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Chadwick Westlake, EQB’s chief financial officer, addressed the impact of these provisions, noting that the elevated credit losses were tied to specific exposures, including irregularities associated with the Pride Group.
"Excluding the elevated equipment financing credit losses, EQB would have achieved the high-end of 2024 expectations," he said in a press release. "Our updated growth guidance reflects our bullish view on loan origination prospects, tailwinds for provisioning given steps taken in equipment financing in Q4 and the expectation for significant improvement in impaired loans.”
EQB anticipates easing monetary policy will drive loan origination growth across its personal and commercial lending portfolios. The bank also expects improved credit performance as it refines its risk management approach.
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