EQB gets mortgage share in slower housing market

The lender reported a quarter-quarter growth of 2% of its uninsured single-family residential portfolio, which was a 28% increase in origin in the previous year, and executives described it as one of the strongest quarters to retain loans ever.

CEO Andrew Moor noted in the EQB earnings call that filings in May rose 17% year-on-year, adding that recent stake earnings appear to come at the expense of at least one large market competitor.

“We do get some proprietary data, which seems to indicate that we have won a share in our space, especially with one of the most important players in the market,” Moor said.

“We are not expanding our standards for growth,” he continued. “By maintaining a wide range of influence in Canada while carefully managing risks associated with housing prices, we continue to build a strong portfolio with good risk management returns potential.”

The bank’s reverse mortgage and CMHC insurance apartment loan portfolio also performed well. Explanation loans rose 8% in the quarter, up to $2.5 billion from the same period last year, while insured multi-unit residential loans rose 6% in quarter-quarter and 29% year-on-year.

Loan losses rise, but may peak

Credit performance is the central phase of the call, with gross margins on loans rising 8% from last quarter to $775 million. Despite fewer new problem loans, resolution activity remained slow, partly due to court delays and wider economic uncertainty.

The third phase provisions totaled $23.2 million, mainly related to loans that have been classified as damaged. Management noted that several isolated cases (from mortgages in 2022) fell sharply than the broad market.

EQB says its uninsured single-family mortgages had an average loan-to-value of about 70% at the origin, and its LTV was even lower in terms of commercial use.

Chief Risk Officer Marlene Lenarduzzi admitted that the rules in the third quarter may remain higher, but both she and Moor suggested that the second quarter could mark a peak. “We have done a lot of effort to make this statement comfortable for ourselves,” Moore said, noting that renewing loan renewals with lower interest rates and more effective solutions should help improve performance in the second half of the year.

The bank’s return on equity fell to 11.9% from 15.9% a year ago, driven by higher loan losses, softer securitization income and resistance to holding excess capital. Nevertheless, EQB says the ROE series that recovers to 15%–17% during the interim period has not yet reached its target.

margin is in advance

EQB said it would be beneficial if the Canadian bank continues to lower the tax rate. Many of its adjustable interest rate mortgages have reached the ground of the contract, meaning that borrowers’ payments will not drop further, but the bank’s capital costs will.

“The policy rate further reductions are therefore directly benefiting from net interest income,” said David Wilkes, vice president and treasurer.

He added that even if interest rates drop, EQB-matched funding methods and the duration of equity for one year should help keep net profit margins stable.

notes: Transcripts are provided by company and/or third-party sources and cannot 100% ensure their accuracy.

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Andrew Moor Bank Income David Wilkes Income Phone EQB Equable Bank Equalitable Bank Income Creditor Phone Marlene Lenarduzzi

Last modified: June 1, 2025