The company posted landmark earnings – with the broker channel playing a significant part in that success, says Moor
EQB’s bumper first-quarter earnings were especially noteworthy for the lender’s strong performance in the face of a challenging housing market, according to its chief executive officer Andrew Moor (pictured top).
The company saw year-over-year earnings growth jump by 12%, with revenue surging by 27% to just under $300 million and adjusted net income swelling to $108 million.
Speaking with Canadian Mortgage Professional, Moor highlighted growth in the company’s digital bank EQ Bank, which saw its customer base expand by 38%, as a particularly strong indicator of its progress over the past year.
That “pretty stunning” result, he said, arrived as the brand found its voice during the past 12 months, bolstered by a partnership with actors Eugene and Dan Levy and a series of commercials aired during the recent Superbowl.
“That really seems to be resonating,” Moor said. “And then of course, our mortgage broker friends continue to deliver for us. While the general single-family space was a bit more muted in the last year, in the last quarter [strength] is in reverse mortgages, and we’re really working well with mortgage broker partners and people are finding ways to do business with us, and finding customers when that’s a useful solution.”
EQB has become a “very significant player” with reverse mortgages in the broker channel, Moor said, while its focus on supporting the broker space has also seen strong investment in technology during the past six months.
Could the fog clear in Canada’s mortgage market this year?
While 2023 was marked by choppy waters for the mortgage market, Moor said there’s room for optimism looking ahead, particularly with the Bank of Canada expected to cut interest rates at some point this year.
“I’m feeling like spring will come soonish when the Bank of Canada starts to go into a bit of an easing mode and drops interest rates a bit,” he said. “Qualification is going to become easier, and the industry can spring back to life a bit. That’s the hope and expectation.”
Canada's housing market is poised for an upturn in 2024, potentially triggered by Bank of Canada rate cuts. https://t.co/vyi5tCGbMF#mortgageindustry #industrytrends #housingmarket #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) February 13, 2024
It may take a couple of months for that market uptick to arrive – but when it does, prospects for the mortgage broker community are strong for a multitude of reasons, according to Moor.
“I think mortgage brokers are going to continue to win share, because getting a mortgage is becoming more and more complicated for regulatory reasons,” he said.
“And obviously the kind of professionals employed in the broker channel are really going to win in that environment. We’re a great believer in brokers – all of our mortgages come through [them]. So we live in the same ecosystem and we thrive when this ecosystem is doing well. We’re excited about how our mortgage broker partners can do this year.”
Company gearing up for another busy 12 months ahead
EQB is currently planning to launch product extensions giving borrowers the ability to finance laneway houses, housing additions, and other types of construction investment, with those arrangements increasingly popular in markets like Toronto and Vancouver where supply shortages have been most sorely noted.
That will prove especially useful for brokers, Moor said, with little indication that the significant regulatory change required to ease the national housing crisis is on the way.
“I do think there’s always ways of thinking about the mortgage market itself and how regulations could make it a bit easier for certain parts of the community to buy a house,” he said. “I’m not really expecting a bunch of change. Frankly, I don’t think that’s the mindset of regulators at this point.
“And so I think we as mortgage professionals have to figure out how we can more efficiently operate within the constraints that are applied.”
Also of note at EQB in the year ahead will be the rollout of a new small business account, a development that Moor said will be of benefit for brokers and their clients alike.
“Because many mortgage brokers operate small businesses, hopefully they’ll be our customers. Whether it’s they themselves or their customers with small businesses, I think we’re really going to bring some new value to the marketplace,” he said. “So we’re excited about what that might do.”
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