EQB Q3 2026 Earnings Call: Complete Transcript

EQB (TSX: EQB ) held its third-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary EQB Inc. completed a significant transaction with PC Financial, marking a major strategic shift and integration milestone, contributing $10 million in earnings, excluding purchase price accounting impacts. The company achieved 50% of its $30 million cost synergy target within the first month post-acquisition, indicating strong integration progress. 41%, and the company reported over $1 billion in revenue for the first nine months of the fiscal year, highlighting a diversified balance sheet and revenue mix.

3%, driven by the acquisition's positive impact and disciplined expense management. The PC Financial acquisition expanded EQB's customer base and product offerings, with plans to leverage the PC Optimum partnership for increased engagement and market presence. 4% and increased its dividend by 3% quarter over quarter, reflecting robust capital management. Impaired credit provisions increased due to higher provisions in personal and commercial segments, though delinquency trends are stable to improving.

EQB is proactive in provisioning for economic uncertainties, with a focus on disciplined lending and rigorous credit oversight. The company expects ROE and ROTCE to improve further, with a focus on successful integration, strategic growth, and capital allocation. Full Transcript OPERATOR Welcome to EQB's earnings call for the third quarter of 2026. Note that this call is being recorded on Thursday, August 27, 2026.

It is now my pleasure to turn the call over to Lamar Prasad, Senior Vice President, Investor Relations. Please go ahead. Lamar Prasad, Senior Vice President, Investor Relations Thank you, Sylvie, and good morning, everyone. Your hosts for today's Q3 results call are Chadwick Westlake, President and CEO; Anilisa Sainani, CFO; and Punish Arora, CRO.

Also present for the Q&A session is Darren Lorimer, EVP, Commercial Banking, and Daniel Ratazzi, EVP, Personal Banking. After prepared remarks, we will open the lines for questions from our prequalified analysts. We encourage you to also log into our webcast and view our quarterly presentation, which will be referenced during the prepared remarks. On slide 2 of our presentation, you will find EQB's caution regarding forward-looking statements, which involve assumptions that have inherent risks and uncertainties.

Actual results may differ materially. I would remind listeners that all figures referenced today are on an adjusted basis where applicable, unless otherwise noted. With that, I will now turn the call over to Chadwick. Chadwick Westlake, President and CEO Thanks, Lamar, and good morning.

The third quarter marked a historic inflection point for EQB. It is worth taking a moment to acknowledge what it took to get here—the complexity, the pace of change and the sheer amount of effort to decisively close our PC Financial transaction. Hundreds of people across EQB and PC Financial spent months planning, testing and preparing to make a very complex integration feel seamless. From day one through it all, we remain focused on our customers, supported one another and delivered an extraordinary outcome.

We're a very different challenger now, with a new level of relevance, reach and choice for millions of everyday Canadians. What excites me most is that we're only beginning to unlock the opportunity ahead. At the same time, the quarter behind us is not a clean reflection of the earnings power of the combined franchise. We reported only one month of PC Financial results in a seasonally dynamic cards business alongside the accounting and capital impacts associated with the transaction.

Even in that context, PC Financial contributed approximately 10 million of earnings excluding the favorable impacts of purchase price accounting, reinforcing our confidence in the long-term value. Early days, the integration is at and in some cases ahead of expectations. Against our 30 million cost synergy target, we achieved 50% on an annualized basis in the first month, plus organic growth month over month across our new product shelf. The composition of our earnings is very different now.

On a pro forma basis, PC Financial would have approximately doubled revenue excluding loyalty point costs and nearly tripled non-interest revenue, significantly increasing the proportion of recurring fee-based earnings within the franchise. We've also started to go to market with real ambition for our EQ Bank brand as part of the early integration and with our game-changing PC Optimum and Loblaw partnership. For example, a few weeks ago we announced the Grand Scan Contest, the largest PC Optimum points giveaway in history with 25 million points for a single winner.

As part of this we introduced multiple EQ Bank pop-up stores inside Loblaws in three major cities across Canada. Most banks compete for a customer with a one-time offer and an appointment. We're now meeting 14 to 15 million Canadians where they are every week—in the grocery aisle, while running errands and filling up their cars—with brands they trust. This gives us a unique opportunity to build tremendous awareness, engagement and ultimately customer relationships at a scale very few banks can match.

Our purpose is to help Canadians get ahead every day. Today we have the reach, capabilities and scale to do that in entirely new ways. Now, before moving to some points on the quarter, a few comments on talent. We welcomed over 300 new PC Financial colleagues and the transition was seamless from day one.

These new colleagues include our Chief Risk Officer, Punish, who you'll hear from shortly. Since joining as part of PC Financial, he has spent considerable time evaluating our risk capabilities and making enhancements. He is part of a broader strengthening of our team as we also welcome Michaela Garfield as Senior Vice President, Customer Growth, Experience and Strategy, and Ian Hanning as Senior Vice President, Credit Cards, Insurance and Operations. On the technology side, we also welcome Basil Eltham, Chief Technology Officer for our digital business.

I want to again thank Marlene Leonarduzzi for her years of service as CRO. We are pleased to continue benefiting from her experience and counsel in her role as Special Advisor. Shifting to three areas I'll speak to before Anilisa shares more on results: 1) context for the quarter; 2) our core businesses; and 3) outlook. Despite being a complex and noisy quarter, as anticipated, there were several clear, encouraging outcomes.

ROE and Return on Tangible Common Equity, or ROTCE, both improved sequentially and year over year. With the closing of PC Financial, we recognized significant goodwill and intangibles reflecting the value of the acquired franchise and an increase in EQB share price at closing. ROE will continue to show you the full capital we deployed. While ROTCE excludes goodwill and other intangible assets, we believe it offers a cleaner view of operating performance.

With the deal closed, for the first time we generated over $1 billion of revenue through the first nine months into a fiscal year, with just one month of PC results. 41%, reflecting the evolution of our business mix and earnings profile. We exited the quarter with a much more diversified balance sheet and revenue mix, plus our highest-ever level of direct retail deposits. We have an efficient operating model with opportunities for continued improvement in our cost base.

Taken together, these results point to a stronger, more resilient franchise with growing earnings power. The primary headwind in the third quarter was a higher level of performing and impaired credit provisions. We proactively updated our provisions following a comprehensive review of our portfolio and the evolution of economic indicators, alongside our assessment of the operating environment and ongoing uncertainty—which Punish will discuss. Early-stage delinquency trends across the portfolio are stable to improving, and we believe we are positioned to perform well across a range of economic outcomes.

Turning to the core business, this is a very different company than it was a year ago. We said we would restore efficiency as a competitive advantage and that work is showing up in our results. We are making clear choices about where to invest capital—focusing on businesses where we see sustainable and attractive returns, and just as importantly stepping back where we do not. With new energy and focus in Personal Banking under Daniel's leadership, we gained meaningful market share in single-family uninsured originations and continue to drive strong growth in reverse mortgages.

We are leaning into our competitive advantages, sharpening our execution and winning in areas we choose to compete. I expect that momentum will increasingly translate into stronger net asset growth in the quarters ahead. While market share gains are encouraging, the housing market in general remains subdued with limited industry-wide growth. That said, taking share matters.

We are seeing stronger application volumes, deepening broker relationships and improving underwriting efficiency. As market activity returns, we'll be well positioned to convert that momentum into earnings growth. Our largest revenue-generating business is now credit card interest and fee income from the tens of billions in annual spend across our suite of PC Mastercards. In the first month following close, credit card applications increased 3% month over month with initial cross-selling to existing EQ Bank customers.

It was also a record month for new PC insurance policies, reaching 93,000 in force. These indicators point to strong customer engagement and are encouraging. Our commercial banking continues to perform well under Darren's leadership. Importantly, our insured multi-unit residential business—which finances exactly what Canada needs more of: purpose-built rental housing supply—uninsured commercial real estate remains the more challenging part of the market, and our approach has been consistent: fewer, better opportunities with strong risk-adjusted yields and close attention to credit quality.

Being cloud-native and API-first was a deliberate choice years ago and it's paying off now. It's why we can integrate a business like PC Financial at this pace, why we can scale without adding costs at the same rate, and why our investments in technology and AI translate into efficiency rather than added overhead. This creates a structural advantage over institutions many times our size and we intend to keep pressing it. That brings me to outlook.

We have one quarter left in fiscal 2026 and we look forward to sharing our fiscal 2027 and refreshed medium-term outlook at our Investor Day on December 7, which is set to be an immersive and highly engaging morning for attendees here in the EQ Bank Tower. In Q4, investors will see the first full-quarter contribution of PC Financial, a further increase in weighted average shares outstanding, and still only a portion of the synergies we expect to realize. We have all experienced sentiment in past days, weeks and months about the magnitude of geopolitical and macro uncertainty and the potential impact to Canadian employment and the economy broadly.

We do believe Canadian households are proving resilient and our balance sheet shows that, but we do focus on everyday Canadians and small business owners that are impacted. Our purpose is to be there to help them get ahead every day, and this volatility and uncertainty could continue for an extended period of time. But taking those factors into account, we expect fiscal 2026 ROE will improve further from our Q3 level, including ROTCE in the 12% range as we make strides toward our medium-term ranges. We built proactive provisioning in Q3 in readiness for this type of environment and the ongoing trade uncertainty could still add more sensitivity to these ranges.

On capital allocation, our focus is reinvestment in the business while maintaining the flexibility that has long been one of EQB's strategic advantages. Our top priority is a successful integration and progress to our ROE objectives. We will remain opportunistic across share repurchases with capacity under our existing NCIB, dividend growth, and selective inorganic opportunities. There is significant but exciting integration work ahead of us and we are only at the beginning of what is possible.

We have a clear strategy, strong momentum and a unique opportunity to help millions more Canadians get ahead. This week marks my first year as CEO and I've never been more optimistic about the future of EQB. Now over to Anilisa. Anilisa Sainani, Chief Financial Officer Thanks, Chadwick, and good morning, everyone.

As a reminder, my comments will be on an adjusted basis and you can find a summary of these adjustments on Slide 25 of today's presentation. Adjusted results exclude the $219 million Day 1 provision on performing acquired credit card receivables and other acquisition-related items starting on Slide 7. As Chadwick mentioned, Q3 marks the beginning of a significant shift in EQB's earnings profile and the immediate shift in our revenue mix and balance sheet. As this is our first quarter reporting as a combined business, we have provided additional detail on the acquisition and related accounting impacts on Slide 23 of today's earnings presentation.

Slide 24 also highlights key accounting considerations related to the acquisition and how the impacts are expected to flow through reported and adjusted earnings going forward. With that context, I'll turn to this quarter's financial performance. 3%. The positive impacts of the acquisition and continued expense discipline more than offset the continued tough operating environment that resulted in higher PCLs and slower revenue growth.

1%. Turning to the balance sheet on Slide 8, loans under management, or LUM, are a key performance metric as they include our market-leading position in insured multi-unit residential mortgages. 5 billion. Sequential growth was primarily driven by the acquisition of the acquired PC Financial cards.

Excluding the acquired cards, LUM increased 1% sequentially, driven by continued strength in our insured multi-unit residential, decumulation, and uninsured single-family residential portfolios. We achieved this growth despite softer market conditions, reflecting the benefits of our ongoing strategy to optimize our portfolio mix and redeploy capital away from lower-return businesses, including certain pockets of insured single-family residential and long-haul and subprime leases in our equipment financing portfolios. Conventional loans, which exclude the insured single-family and multi-unit residential portfolios, are the primary contributor of net interest income.

Conventional loans increased 16% year over year and 14% sequentially, reflecting the addition of the cards to the EQB product shelf and continued growth across most remaining portfolios. Looking ahead, the addition of PC Financial broadens the drivers of growth across the franchise. While lending remains an important growth engine, we now benefit from the addition of a scaled loyalty-linked cards business and a significantly larger customer base, reducing our dependence on housing-related activity. We are on track to achieve our 2026 loan growth outlook of high single digit to low double digit and now expect to land in the upper end of the range as a combined franchise.

Now turning to deposits, total deposits were up 3% year over year and 2% sequentially, driven by growth in retail banking deposits following the closing of PC Financial, partly offset by the impacts of a covered bond maturity and seasonality in credit union balances. We continue to access a diversified mix of funding sources. This provides important flexibility and enables us to actively manage and optimize our cost of funding while maintaining pricing discipline in a competitive environment. We also continue to improve the proportion of lower-cost funding, supporting margin resilience in a difficult and highly competitive environment.

Retail deposits now represent 29% of total funding, up more than 2 percentage points from a year ago. As we deepen customer relationships across our larger franchise, we expect further growth in lower-cost deposits and a continued strengthening of our funding profile. Turning to NII on Slide 9, net interest income was $319 million, up 22% both year over year and quarter over quarter. NIM increased 33 basis points, reflecting a structural shift in our product mix and margin profile following the addition of the acquired credit card portfolio.

Margins in other personal and commercial portfolios were stable on a normalized days basis as compared to last quarter, reflecting disciplined pricing and proactive margin management. Looking ahead, we expect margin performance to improve next quarter, reflecting a full quarter's contribution from PC Financial. 9 million increased 55% year over year and 77% sequentially.