EQB releases Q3 2025 financial results and increases dividend 17% y/y

Executive Summary

• EQB Inc. reported Q3 2025 financial results showing a decline in profitability due to macroeconomic headwinds and real estate market pressure, resulting in higher credit provisions.
• The company announced a 17% year-over-year increase in its common share dividend to $0.55 per share.
• Significant executive leadership changes occurred, with Chadwick Westlake appointed as the new President and CEO, replacing interim CEO Marlene Lenarduzzi.

Key Details

• Financial Performance (Q3 2025 vs Q3 2024):
  • Adjusted Net Income: $80.3 million (-32% y/y, -15% q/q); Reported Net Income: $73.4 million (-35% y/y, -19% q/q).
  • Adjusted Revenue: $310 million (-5% y/y, -2% q/q); Reported Revenue: $306.1 million (-6% y/y, -3% q/q).
  • Adjusted Net Interest Income (NII): $254 million (-6% y/y & q/q); Reported NII: $250 million (-8% y/y & q/q).
  • Adjusted Net Interest Margin (NIM): 1.95% (-14 bps y/y, -25 bps q/q); Reported NIM: 1.92% (-17 bps y/y, -28 bps q/q).
  • Adjusted Diluted EPS: $2.07 (Adjusted) vs $1.90 (Reported); Reported Diluted EPS was $1.90 (-33% y/y).
• Financial Performance (YTD 2025 vs YTD 2024):
  • Adjusted Net Income: $290.7 million (-14% y/y); Reported Net Income: $271.4 million (-16% y/y).
  • Adjusted Diluted EPS: $7.36 (-14% y/y); Reported Diluted EPS: $6.88 (-16% y/y).
  • Adjusted ROE: 12.4% (Reported: 11.6%).
  • Total Capital Ratio: 15.7%; CET1 Ratio: 13.3%.
• Dividend Declaration:
  • Board declared a dividend of $0.55 per common share, representing a 17% increase y/y and 4% increase q/q.
  • Payable on September 30, 2025, to shareholders of record as of September 15, 2025.
• Operational Metrics:
  • Total AUM + AUA: $137 billion (+9% y/y, +2% q/q).
  • EQ Bank Customers: 586,000 (+21% y/y, +5% q/q).
  • Book Value Per Share: $82.37 (+9% y/y, +2% q/q).
  • EQ Bank Card reached $1 billion in funds loaded.
• Portfolio Updates:
  • Personal Lending: Uninsured loans under management reached $24.4 billion (+8% y/y, +2% q/q). Single-family uninsured originations increased 30% y/y. Decumulation lending grew to $2.7 billion (+41% y/y, +8% q/q).
  • Commercial Banking: CMHC-insured multi-unit residential LUM grew 30% y/y to $31.4 billion. Insured commercial construction lending grew 28% y/y to $3.5 billion.
  • Deposits: Total deposits reached $9.7 billion, marking strong q/q growth.
• Credit Quality:
  • Provision for Credit Losses (PCL): $34.0 million in Q3 (up from $21.3 million in Q3 2024).
  • Net Impaired Loans: Increased by $33.3 million to $775 million (164 bps of total loan assets).
  • Net Allowances as % of Total Loan Assets: 33 bps (up from 29 bps in Q2 2025 and 26 bps in Q3 2024).
• Executive Leadership Changes:
  • Chadwick Westlake: Appointed President and CEO and joined the Board of Directors, effective August 25, 2025.
  • Marlene Lenarduzzi: Returned to role as Chief Risk Officer after serving as interim CEO following the death of former CEO Andrew Moor.
  • Anilisa Sainani: Appointed SVP and Chief Financial Officer, effective August 28, 2025.
  • David Wilkes: Appointed SVP and Chief Strategy & Growth Officer, effective August 28, 2025.

Notable Quotes

• "This was a difficult quarter for EQB as we mourned the loss of Andrew Moor. Turning to performance, while not unique to EQB, macroeconomic uncertainty and housing market conditions in Canada continued to weigh on credit performance and interest income... However, the resilience of our business model was underscored by clear loan book growth and expanding EQ Bank customer engagement." — Marlene Lenarduzzi, Interim President and CEO
• "It is an incredible privilege to join EQB this week as CEO... My focus over the coming months will include listening closely to stakeholders across Canada, sharpening our strategy and moving quickly where Canada's Challenger Bank will win to our full potential." — Chadwick Westlake, President and CEO
• "While earnings and ROE did not meet our expectations in Q3, we were pleased with performance in our core lending markets and the continued momentum in EQ Bank customers and deposit growth... With year-to-date financial results in mind, including the elevated PCLs and higher business investment, we are correspondingly reducing our expectations for the remainder of this fiscal year, however our medium-term targets remain consistent." — David Wilkes, Chief Strategy & Growth Officer