EQB’s adjusted net interest income slipped 6% compared with the prior-year period to C$254 million ($185 million). (James MacDonald/Bloomberg)
[Stay on top of transportation news: Get TTNews in your inbox.]
EQB Inc. shares fell by the most intraday since 2020 on Aug. 28 as a slowing Canadian economy and housing market dampened the challenger bank’s earnings.
The stock slid by as much as 13% after the bank set aside 60% more for potentially bad loans than a year ago in the quarter ended July 31.
EQB’s adjusted net interest income slipped 6% compared with the prior-year period to C$254 million ($185 million). The firm said macroeconomic uncertainty and Canada’s weakening housing market continued weighing on credit performance and interest income.
High unemployment and interest rates have historically contributed to more people defaulting on their mortgages, particularly in the Greater Toronto Area, where the bank saw house prices drop 25% to 30%, Chief Risk Officer Marlene Lenarduzzi said on a call with analysts.
“We are well aware of those pockets and are monitoring them, and we do have appropriate levels of provisions to account for that,” she said.
(Bloomberg)
The company earned an adjusted C$2.07 per share in its fiscal third quarter, short of the C$2.48 expected by a survey of Bloomberg analysts.
EQB’s latest fiscal results set it apart from the Big Six banks, most of which reported earnings beats this week due to lower credit-loss provisions.
National Bank Financial analyst Gabriel Dechaine called EQB’s results a “big miss.” The lender also lowered its full-year guidance for 2025, which he said implies another soft quarter ahead.
This quarter marked the return of EQB’s former Chief Financial Officer Chadwick Westlake, who became CEO on Aug. 25 after the unexpected death of the bank’s longtime leader, Andrew Moor.
“Our focus is and will remain here in Canada,” Westlake said on the call. “We will not become distracted by other markets.”
EQB named Anilisa Sainani as CFO on Aug. 27. She was formerly chief operating officer in the CFO group at Royal Bank of Canada.
Want more news? Listen to today’s daily briefing below or go here for more info:
