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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.

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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 Fiscal 2025 Earnings: A Mixed Bag with Growth Potential

EQB's fiscal 2025 financial performance was marked by a mixed bag of results, with diluted EPS coming in at $1.53, below analyst estimates of $2.42. Net interest income (NII) was $265 million, down 2% year-over-year, but up 1% sequentially. Net interest margins expanded 4 basis points sequentially but were down 8 basis points year-over-year. Noninterest revenue was $43.5 million, down 15% from last year and 9% from last quarter. The company's efficiency ratio was flat compared to last quarter.

Publication Date: Dec -07

📋 Highlights
  • Total Loans Growth:: 10% YoY growth driven by 36% surge in CMHC-insured multi-unit residential mortgages.
  • EQ Bank Performance:: 18% YoY customer growth and $10 billion in deposits, with $140 million in small business deposits by October.
  • Restructuring Impact:: $92 million pretax restructuring charge, targeting $45 million annual savings by 2026 and $0.57/share dividend hike.
  • 2026 Outlook:: ROE expected to rise to ~12% from 7.5%, with EPS growth of 12–15% and loan growth of 9–11%.
  • PC Financial Acquisition:: CET1 ratio maintained at 13%, with high-return portfolio and 4% loss ratio supporting long-term growth.

Loan Growth and Credit Quality

The company's total loans under management grew 10% year-over-year, driven by 36% growth in off-balance sheet CMHC insured multi-unit residential mortgage business. However, credit quality was a concern, with allowances for credit losses (ACL) increasing to 41 basis points, driven by higher performing PCLs in personal and commercial lending. Gross impaired loans increased by 7% quarter-over-quarter to $871 million. Management is cautiously optimistic about credit improvement in the second half of 2026.

Guidance and Outlook

For 2026, EQB expects ROE to improve materially from 7.5%, potentially approaching 12%, and diluted EPS growth to land within the medium-term range of 12% to 15% growth. The company is focused on improving its funding mix by sourcing a higher percentage from lower-cost sources, including deposits. Management expects low single-digit expense growth into 2026 and is focused on maintaining capital flexibility to pursue strategic growth.

Valuation and Dividend Yield

With a P/TBV ratio of 1.12, EQB's valuation appears reasonable compared to its peers. The company's dividend yield is 2.15%, which is attractive for income investors. As the company focuses on improving its ROE and driving growth, investors will be watching to see if EQB can achieve its targets and deliver long-term value.

Acquisition and Strategic Initiatives

The acquisition of PC Financial is expected to close with a CET1 capital position of 13% and is expected to generate a high return on equity. The company is also focused on building a wealth platform, likely through inorganic means, with a focus on distribution rather than manufacturing. These strategic initiatives are expected to drive growth and improve EQB's competitive position.

3. NewsRoom

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EQB 2026 Annual Meeting of Shareholders materials now available

Mar -09

Source: prnewswire.com

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EQB receives Competition Bureau clearance for acquisition of PC Financial

Mar -06

Source: prnewswire.com

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EQB reports first quarter 2026 results

Feb -25

Source: prnewswire.com

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EQB Inc. (TSE:EQB) Receives Consensus Recommendation of “Hold” from Analysts

Jan -29

Source: defenseworld.net

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EQB announces renewal of Normal Course Issuer Bid and Approval of Automatic Securities Purchase Plan

Jan -02

Source: prnewswire.com

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EQB Inc. (TSE:EQB) Receives Average Rating of “Hold” from Brokerages

Nov -15

Source: defenseworld.net

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

Nov -05

Source:

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EQB to announce fourth quarter and fiscal 2025 results

Nov -05

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

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E-L Financial

A-Score: 8.2/10

Value: 7.5

Growth: 6.8

Quality: 8.8

Yield: 10.0

Momentum: 8.0

Volatility: 8.3

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Main Street Capital

A-Score: 7.1/10

Value: 4.6

Growth: 5.9

Quality: 6.7

Yield: 9.0

Momentum: 7.0

Volatility: 9.3

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PennyMac Financial Services

A-Score: 5.3/10

Value: 6.1

Growth: 2.6

Quality: 6.8

Yield: 2.0

Momentum: 7.5

Volatility: 7.0

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Mr. Cooper Group

A-Score: 5.2/10

Value: 3.7

Growth: 4.3

Quality: 6.7

Yield: 1.0

Momentum: 10.0

Volatility: 5.7

1-Year Total Return ->

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Walker Dunlop

A-Score: 5.1/10

Value: 6.9

Growth: 3.9

Quality: 5.1

Yield: 7.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

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EQB

A-Score: 5.0/10

Value: 4.7

Growth: 6.7

Quality: 3.5

Yield: 4.0

Momentum: 3.5

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

117.88$

Current Price

117.88$

Potential

-0.00%

Expected Cash-Flows