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Highlights
- EQB Inc. achieves record earnings, surpassing $1 billion in annual revenue.
- The company sees a 9% growth in loans under management and crosses 500,000 EQ Bank customer accounts.
- EQB raises dividend and issues medium-term growth guidance anchored in 15%+ ROE.
EQB Inc. (TSX:EQB) has reported outstanding financial results for the fiscal year ending October 31, 2024, achieving record earnings driven by a 9% annual growth in loans under management, higher non-interest revenue, and a significant milestone in EQ Bank customer accounts, which surpassed half a million. This exceptional performance has positioned the company to raise its common share dividend and issue medium-term growth guidance, with a focus on maintaining a 15%+ return on equity (ROE) in fiscal 2025.
Andrew Moor, President and CEO of EQB, commented on the company's record-breaking year, saying, "This year marks our second decade as a publicly traded company and our most profitable year on record, with annual revenue surpassing $1 billion for the first time. Shareholder value creation, including ROE at 15% and four consecutive quarters of dividend increases, once again reflected efficient capital allocation and underlying business strength."
EQB's continued growth was driven by strong performance in both personal and commercial loan originations. The company’s loans under management grew by 9%, further cementing its position as a leader in the Canadian banking sector. Additionally, EQ Bank’s customer base saw a substantial increase, surpassing 500,000 accounts, a key milestone for the digital banking platform that has become a core part of EQB's growth strategy.
While the fiscal year overall was highly successful, EQB did face some challenges in the fourth quarter. The company reported higher-than-anticipated provisions for credit losses (PCLs) due to credit provisions in its equipment financing portfolio, including one specific credit exposure. As a result, EQB experienced some pressure on its quarterly results. In response, EQB has implemented measures to de-risk and diversify this portfolio, including a shift to higher-quality credit exposures, as part of its ongoing strategic review of the business.
Despite the quarterly setback, EQB’s strong overall performance has bolstered confidence in the company’s future growth prospects. In particular, the company’s outlook for fiscal 2025 is favorable, with expectations for continued growth in personal and commercial loan originations. The company's medium-term growth guidance remains anchored in a target ROE of 15%+.
EQB’s strategic focus on efficient capital allocation and business diversification, alongside its ongoing efforts to optimize its portfolio and manage risk, underscores its commitment to sustainable long-term growth. The company's financial resilience and ability to generate strong shareholder value were key highlights of fiscal 2024, and EQB remains well-positioned to continue its success in the coming years.
As EQB looks to build on this momentum, its solid foundation in digital banking, alongside its expanding loan portfolio and a healthy credit risk management framework, sets the stage for another prosperous year. The company’s continued commitment to value creation, customer growth, and profitability will be critical as it navigates the evolving financial landscape.
