The lender saw its adjusted net income surge in Q2
Equitable Bank’s quarterly earnings per share in the second quarter of 2023 were its best ever, the company said in a news release this week.
The lender saw its adjusted net income surge to $115.5 million, with adjusted diluting earnings for the quarter coming in at $2.98 per share
“By consistently applying our Challenger Bank philosophy, Equitable delivered record-breaking EPS and an ROE performance that exceeded our own industry-leading long-term average,” said Andrew Moor, chief executive at EQB.
“At a time when Canadians need more and better value from the banking industry, Equitable Bank is providing it. Whether it's our no-fee, high interest EQ Bank digital services, our recently launched fully digital First Home Savings Account or the loans we make to build much-needed affordable housing, we are living our social purpose and in return rewarding our investors.
“Significant growth in our customer base, strong customer engagement and our plans to continue to bring innovation to the market give me well-founded confidence that we are set to thrive in the years ahead.”
Moor said the bank has been able to increase its 12-month earnings growth guidance, including diluted EPS guidance, from 10% to 15% to a range of 18% to 22% thanks to the year-to-date performance.
Adjusted revenue for the three months ended June 30 increased by 72% year over year to $284.6 million driven by lending growth, net interest margin expansion, and higher non-interest revenue.
"EQB's standout performance relative to guidance and bank peers reflects our consistent long-term approach to allocating capital and generating leading ROE, anchored in exceptional credit, liquidity and capital management,” said Chadwick Westlake, Chief Financial Officer at EQB.
“This remains a dynamic time globally for banks, but with our deeply customer-focused challenger operating model and performance year-to-date, we have conviction in our increased 2023 guidance and look forward to starting our new fiscal year on November 1st with improved comparability of EQB to peers.”
EQB’s customer base increased by 133% quarter by quarter to 367,790 by the end of Q2 2023. Customer engagement remained at a quarterly high of 51% as a result of the launch of the EQ Bank Card and the introduction of services in Quebec.
On the other hand, Moor noted that the interest rate increases and the slowdown of the housing market has reduced the number of EQB’s single-family mortgage applications. Also, he said loans are staying on the books for longer and the renewals are stronger as customers opt to remain in their homes.
“We expect high growth next year—a reasonable assumption given the housing market’s fundamentals fuelled by population growth, some pent-up demand caused by current housing market conditions and presumably by then, more stability in interest rates,” he said.
