TORONTO, Aug. 26, 2026 /CNW/ -- EQB Inc. (TSX: EQB) today reported earnings for the third quarter and nine months ended July 31, 2026, including one month of results from the acquisition of President's Choice Bank ("PC Bank"), PC$(R)$ Financial Insurance Agency Inc., PC(R) Financial Insurance Broker Inc. and certain affiliated entities of PC Bank (collectively, "PC Financial").
-- Adjusted diluted EPS1: $2.12, +4% q/q and +2% y/y (reported -$3.39)
-- Adjusted PPPT1: $196.2 million, +28% q/q and +36% y/y (reported $135.1
million)
-- Adjusted ROE1: 10.3%, +10 bps q/q and +20 bps y/y (reported -16.2%)
-- Adjusted ROTCE1: 11.1%, +40 bps q/q and +50 bps y/y (reported -17.1%)
-- Adjusted revenue1: $393.0 million, +30% q/q and +27% y/y (reported $391.3
million)
-- Book value per share: $86.86, +7% q/q and +5% y/y
-- Common share dividends declared: $0.63 per share, +3% q/q and +15% y/y
-- Capital: CET1 ratio of 13.4% and total capital ratio of 16.6%
"With the closing of PC Financial on Canada Day, EQB has structurally shifted in customer reach, products, revenue mix and growth potential. The integration is progressing to plan, and we now meet millions of Canadians where they already are, including at the grocery aisle, at the pump, and across everyday spending moments," said Chadwick Westlake, President and CEO, EQB. "Underneath the transaction, earnings were impacted by elevated performing and impaired provisions that reflect the continued pressure many Canadians are facing. Despite a housing market that has yet to turn, our core businesses performed well, and we made great progress growing market share and loans under management. The earnings power of the combined business will become more visible in Q4, and we will set out the path to our 2027 and medium-term return objectives at our Investor Day in December."
Closed PC Financial, positioning EQB to realize the benefits of integration, scale and synergies
-- Transformational acquisition expands EQB's reach to more than 4 million
directly served customers, establishes EQB as the exclusive financial
services partner of the PC Optimum$(TM)$ loyalty program and its more than
18 million active members, and elevates EQB's assets under management and
administration1 to $151 billion
-- Credit card and recurring PC insurance fee income meaningfully adds to
EQB's revenue and brings diversification, contributing to 30% q/q and 27%
y/y revenue growth, while increasing non-interest revenue to 19% of total
revenue despite Q3/26 including only one month of PC Financial results
-- Integration execution remains well underway with $15 million in
annualized cost savings to date; on track toward a $30 million pre-tax
annual run-rate synergy target
Significantly increased retail deposit customers with the completed acquisition of PC Financial
-- Direct retail deposits increased to $10.8 billion in Q3 (+8% q/q and +11%
y/y) driven by the addition of PC Bank direct retail deposits, which
further diversified EQB's funding base. Direct retail deposits
represented 29% of total deposit principal (up 155 bps q/q)
-- With a combined customer base of over 4 million, establishes a solid
foundation to grow the deposit base
Delivered growth in loans under management(1) against a difficult operating environment
-- Personal LUM1 increased 14% q/q and 11% y/y, reflecting the acquired
credit card portfolio, momentum in the fast-growing decumulation segment
and uninsured residential lending origination market share gains in
Ontario, partially offset by a deliberate slowdown in lower risk-adjusted
return segments including single-family insured mortgages
-- Personal LUM1, excluding insured single-family mortgages, increased 19%
q/q and 23% y/y
-- Commercial LUM1 increased 2% q/q and 12% y/y, driven by strong growth in
construction loans (predominantly insured) and continued strength in CMHC
insured multi-unit residential mortgages
Expanding and diversifying revenue sources with PC Financial
-- Net interest income (NII) increased 22% q/q and y/y, reflecting an
increase in net interest margin $(NIM)$1 of 33 bps to 2.41% and a modest 2%
increase in average interest earning assets. NIM1 expanded due to the
addition of the higher yielding credit cards associated with the
acquisition of PC Financial and related fair value marks. NIM1 on the
Personal and Commercial lending portfolios remained relatively stable
-- Adjusted non-interest revenue (NIR)1 increased 77% q/q and 55% y/y,
reflecting a diversification of revenue, including credit card fee income
(net of loyalty costs), insurance, and the accretion of fair value marks.
These increases were partially offset by lower securitization gains
-- Reported total revenue increased 29% q/q and 28% y/y
Higher provisions reflect acquired credit cards and real estate market conditions
-- Reported provisions for credit losses $(PCL)$ were up $258 million, primarily reflecting Day 1 PCL of $219 million on the acquired credit card portfolio -- Adjusted PCL1 reflects provisions relating to credit card activity in the month of July and increases in residential and commercial lending portfolios driven by softer real estate market conditions and equipment lease defaults -- Total gross impaired loans increased 4% q/q as new formations outpaced resolutions, primarily reflecting extended workout timelines. Total formations decreased $39 million or 16% q/q, with lower formations in Commercial partially offset by a modest increase in Personal residential lending portfolios -- The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets1 of 95 bps, compared to 46 bps at Q2/26, primarily reflecting the addition of an unsecured lending portfolio
Expense discipline remains strong
-- EQB's adjusted efficiency ratio1 increased 70 bps q/q to 50.1% (reported
65.5%) and remains on track against its low-50% efficiency ratio target
for 2026
-- Adjusted expenses1 increased 32% q/q and 19% y/y reflecting the inclusion
of one month of PC Financial and disciplined expense management
-- Reported expenses increased 40% q/q and 50% y/y, reflecting PC Financial,
integration-related costs, acquisition-related intangible asset
amortization, and impairment charges
Capital strength supported dividend increase and buyback activity
-- EQB declared a dividend of $0.63 per common share payable on September
29, 2026, to shareholders of record as of September 15, 2026,
representing +3% and +15% increases from the dividends paid in June 2026
and September 2025, respectively
-- In connection with the acquisition of PC Financial, EQB issued 7.2
million common shares on July 1, 2026. In Q3/26, EQB purchased and
cancelled 147,589 common shares through its Normal Course Issuer Bid
(NCIB) (2,441,213 repurchased year-to-date), supporting attractive return
of capital for shareholders
"In Q3, we continued to execute with discipline: maintaining a strong efficiency ratio, expanding net interest margins, and proactively provisioning for credit losses," said Anilisa Sainani, CFO. "The closing of PC Financial represents a meaningful evolution in our business model, adding new revenue streams, enhancing earnings diversification, and reducing our reliance on housing and spread related income. Together, these changes strengthen the resilience of our earnings profile and position EQB for continued growth."
Analyst conference call and webcast: 10:30 a.m. ET on August 27, 2026
EQB's Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Puneesh Arora, CRO, will host EQB's quarterly earnings call and webcast. The webcast with accompanying slides will be available at eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.
(1) These are Non-Generally Accepted Accounting Principles (GAAP) measures or ratios, see "Non-GAAP financial measures and ratios" section for more details.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated balance sheets (unaudited)
($000s) As at July 31, 2026 October 31, 2025 July 31, 2025
Assets:
Cash and cash equivalents 802,497 717,253 485,757
Restricted cash 1,037,856 1,326,684 1,218,685
Securities purchased under
reverse repurchase agreements 2,000,246 1,604,165 1,949,171
Investments 1,755,772 1,645,864 1,731,462
Loans:
Personal 34,984,026 31,027,017 31,534,296
Commercial 14,285,038 15,412,457 15,823,942
Allowance for credit losses (485,387) (206,801) (170,399)
48,783,677 46,232,673 47,187,839
Securitization retained
interests 1,111,015 1,028,623 999,729
Deferred tax assets 63,410 36,429 19,967
Other assets
Derivative financial
instruments 162,657 242,799 246,162
Intangible assets 643,608 148,623 189,092
Goodwill 236,874 92,545 110,580
Investment in associate 52,720 49,884 49,877
Other 535,629 368,179 373,323
1,631,488 902,030 969,034
Total assets 57,185,961 53,493,721 54,561,644
Liabilities and Equity
Liabilities:
Deposits 37,405,378 36,616,511 36,360,714
Securitization liabilities 12,790,549 11,197,477 12,498,948
Obligations under repurchase
agreements - 104,568 148,623
Deferred tax liabilities 208,049 199,151 204,296
Funding facilities 1,705,918 1,454,087 1,385,306
Other liabilities
Derivative financial
instruments 59,569 94,742 70,489
Other 966,668 615,386 581,710
1,026,237 710,128 652,199
Total liabilities 53,136,131 50,281,922 51,250,086
Equity:
Common shares 1,448,151 503,060 512,172
Other equity instruments 345,098 147,360 147,360
Contributed deficit (18,610) (15,014) (15,034)
Retained earnings 2,264,240 2,566,475 2,656,635
Accumulated other
comprehensive income 3,439 1,684 2,035
Total shareholders' equity 4,042,318 3,203,565 3,303,168
Non-controlling interests 7,512 8,234 8,390
Total equity 4,049,830 3,211,799 3,311,558
Total liabilities and equity 57,185,961 53,493,721 54,561,644
Consolidated statements of income (unaudited)
Three months ended Nine months ended
($000s, except per July 31, 2026 July 31, 2025 July 31, 2026 July 31, 2025
share amounts)
Interest income:
Loans:
Personal 476,990 441,296 1,295,394 1,338,864
Commercial 212,041 239,468 653,211 718,715
Investments 20,768 21,314 62,976 61,438
Other 29,449 24,727 79,583 70,009
739,248 726,805 2,091,164 2,189,026
Interest expense:
Deposits 296,657 334,109 899,928 999,309
Securitization
liabilities 108,799 122,476 314,635 360,250
Funding facilities 11,074 11,703 22,918 22,015
Other 3,544 34 10,337 187
420,074 468,322 1,247,818 1,381,761
Net interest
income 319,174 258,483 843,346 807,265
Non-interest
revenue:
Fees and other
income 61,585 24,747 114,231 70,380
Net gains on loans
and investments 902 521 2,984 3,854
Gain on sale from
securitization
activities 9,044 18,027 39,334 48,652
Net gains on
hedging and
derivatives 628 4,351 596 14,563
72,159 47,646 157,145 137,449
Revenue 391,333 306,129 1,000,491 944,714
Provision for
credit losses 302,984 33,968 387,463 82,880
Revenue after
provision for
credit losses 88,349 272,161 613,028 861,834
Non-interest
expenses:
Compensation and
benefits 83,440 79,791 227,887 230,005
Product costs 55,696 25,343 104,351 74,002
Technology and
system costs 31,557 25,362 74,686 71,344
Marketing and
corporate
expenses 28,653 18,046 76,876 54,359
Regulatory and
legal and
professional fees 47,847 14,540 87,672 40,158
Premises 9,086 7,872 26,028 21,531
256,279 170,954 597,500 491,399
(Loss) income
before income
taxes (167,930) 101,207 15,528 370,435
Income tax
(recovery)
expense (40,671) 27,843 11,940 99,069
Net (loss) income (127,259) 73,364 3,588 271,366
Distribution to
limited recourse
capital notes
holders - - 4,410 4,410
Net (loss) income
available to
common
shareholders
and
non-controlling
interests (127,259) 73,364 (822) 266,956
Net (loss) income
attributable to:
Common
shareholders (127,580) 73,014 (1,793) 265,949
Non-controlling
interests 321 350 971 1,007
(127,259) 73,364 (822) 266,956
(Loss) earnings
per share:
Basic (3.39) 1.91 (0.05) 6.93
Diluted (3.39) 1.90 (0.05) 6.88
Consolidated statements of comprehensive income (unaudited)
Three months ended Nine months ended
($000s) July 31, 2026 July 31, 2025 July 31, 2026 July 31, 2025
Net (loss) income (127,259) 73,364 3,588 271,366
Other
comprehensive
income -- items
that will be
reclassified
subsequently to
income:
Debt instruments
at fair value
through other
comprehensive
income:
Net change in
gains (losses) on
fair value 697 (11,334) (5,807) 4,693
Recovery of credit
losses recognized
to income (49) - (242) -
Reclassification
of net losses to
income 1,524 13,075 8,871 1,486
Other
comprehensive
income -- items
that will not
be reclassified
subsequently to
income:
Equity instruments
designated at fair
value through
other
comprehensive
income:
Net change in
gains on fair
value 560 - 2,063 868
Reclassification
of net gains to
retained earnings - - - (868)
2,732 1,741 4,885 6,179
Income tax expense (963) (639) (1,626) (1,928)
1,769 1,102 3,259 4,251
Cash flow hedges
Net change in
unrealized gains
(losses) on fair
value 23,681 5,501 25,698 (7,688)
Reclassification
of net (gains)
losses to income (21,589) (6,954) (27,729) (16,315)
2,092 (1,453) (2,031) (24,003)
Income tax
(expense)
recovery (556) 3 554 6,083
1,536 (1,450) (1,477) (17,920)
Total other
comprehensive
income (loss) 3,305 (348) 1,782 (13,669)
Total
comprehensive
(loss) income (123,954) 73,016 5,370 257,697
Total
comprehensive
(loss) income
attributable to:
Common
shareholders (124,275) 72,666 (11) 252,280
Other equity - - 4,410 4,410
Non-controlling
interests 321 350 971 1,007
(123,954) 73,016 5,370 257,697
Consolidated statements of changes in equity
($000s) Three-month period ended July 31, 2026
Common Contributed Retained Accumulated other comprehensive
shares deficit earnings income (loss)
Other Cash Financial Total Attributable Non-controlling Total
equity flow instruments to equity interests
instruments hedges at FVOCI holders
Balance,
beginning of
period 483,598 345,105 (17,341) 2,420,049 (1,316) 1,432 116 3,231,527 7,653 3,239,180
Net (loss)
Income - - - (127,580) - - - (127,580) 321 (127,259)
Transfer of AOCI
losses to
income, net of
tax - - - - - 18 18 18 - 18
Other
comprehensive
income, net of
tax - - - - 1,536 1,769 3,305 3,305 - 3,305
Common shares
issued on
acquisition 962,601 - - - - - - 962,601 - 962,601
Common share
issuance costs,
net of tax (208) - - - - - - (208) (208)
Exercise of
stock options 2,601 - - - - - - 2,601 - 2,601
Common shares
repurchased and
cancelled (1,936) - - (10,734) - - - (12,670) - (12,670)
Automatic Share
purchase
obligation - - - 4,034 - - - 4,034 - 4,034
Limited resource
capital notes
issuance costs,
net
of tax - (7) - - - - - (7) - (7)
Common share
dividends - - - (21,529) - - - (21,529) (462) (21,991)
Put option --
non-controlling
interests - - (908) - - - - (908) - (908)
Stock-based
compensation - - 1,134 - - - - 1,134 - 1,134
Transfer
relating to the
exercise of
stock options 1,495 - (1,495) - - - - - - -
Balance, end of
period 1,448,151 345,098 (18,610) 2,264,240 220 3,219 3,439 4,042,318 7,512 4,049,830
($000s) Three-month period ended July 31, 2025
Common Contributed Retained Accumulated other comprehensive
shares deficit earnings income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges at FVOCI holders interests
Balance,
beginning of
period 510,973 147,360 (19,177) 2,607,001 5,147 (2,803) 2,344 3,248,501 9,661 3,258,162
Net Income - - - 73,014 - - - 73,014 350 73,364
Transfer of AOCI
losses to net
income, net of
tax - - - - - 39 39 39 - 39
Other
comprehensive
loss, net of
tax - - - - (1,450) 1,102 (348) (348) - (348)
Exercise of
stock options 952 - - - - - - 952 - 952
Common share
dividends - - - (20,297) - - - (20,297) (462) (20,759)
Put option --
non-controlling
interests - - (1,442) - - - - (1,442) - (1,442)
Acquisition of
non-controlling
interests - - 4,242 (3,083) - - - 1,159 (1,159) -
Stock-based
compensation - - 1,590 - - - - 1,590 - 1,590
Transfer
relating to the
exercise of
stock options 247 - (247) - - - - - - -
Balance, end of
period 512,172 147,360 (15,034) 2,656,635 3,697 (1,662) 2,035 3,303,168 8,390 3,311,558
($000s) Nine-month period July 31, 2026
ended
Common Contributed Retained Accumulated other
shares deficit earnings comprehensive income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges holders
at FVOCI interests
Balance,
beginning of
period 503,060 147,360 (15,014) 2,566,475 1,697 (13) 1,684 3,203,565 8,234 3,211,799
Net Income - - - 2,617 - - 2,617 971 3,588
Transfer of AOCI
gains to
income, net of
tax - - - - - (27) (27) (27) - (27)
Other
comprehensive
(loss) income,
net of tax - - - - (1,477) 3,259 1,782 1,782 - 1,782
Common shares
issued on
acquisition 962,601 - - - - - - 962,601 - 962,601
Common shares
issuance costs,
net of tax (208) - - - - - - (208) - (208)
Exercise of
stock options 10,982 - - - - - - 10,982 - 10,982
Common shares
repurchased and
cancelled (31,786) - - (236,688) - - - (268,474) - (268,474)
Limited recourse
capital notes
issued - 200,000 - - - - - 200,000 - 200,000
Limited recourse
capital notes
issuance costs,
net
of tax - (2,262) - - - - - (2,262) - (2,262)
Limited recourse
capital notes
distributions - - - (4,410) - - - (4,410) - (4,410)
Common share
dividends - - - (63,754) - - - (63,754) (1,693) (65,447)
Put option --
non-controlling
interests - - (2,818) - - - - (2,818) - (2,818)
Stock-based
compensation - - 2,724 - - - - 2,724 - 2,724
Transfer
relating to the
exercise of
stock options 3,502 - (3,502) - - - - - - -
Balance, end of
period 1,448,151 345,098 (18,610) 2,264,240 220 3,219 3,439 4,042,318 7,512 4,049,830
($000s) Nine-month period July 31, 2025
ended
Common Contributed Retained Accumulated other
shares deficit earnings comprehensive income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges holders
at FVOCI interests
Balance,
beginning of
period 505,876 147,440 (17,374) 2,483,309 21,617 (13,062) 8,555 3,127,806 10,379 3,138,185
Net Income - - - 270,359 - - - 270,359 1,007 271,366
Realized loss on
sale of shares,
net of tax - - - (6,377) - - - (6,377) - (6,377)
Transfer of AOCI
losses to
retained
earnings, net
of tax - - - - - 7,016 7,016 7,016 - 7,016
Transfer of AOCI
losses to
income, net of
tax - - - - - 133 133 133 - 133
Other
comprehensive
loss, net of
tax - - - - (17,920) 4,251 (13,669) (13,669) - (13,669)
Exercise of
stock options 8,089 - - - - - - 8,089 - 8,089
Common shares
repurchased and
cancelled (3,740) - - (24,432) - - - (28,172) - (28,172)
Issuance costs,
net of tax - (80) - - - - - (80) - (80)
Limited recourse
capital note
distributions,
net of
tax - - - (4,410) - - - (4,410) - (4,410)
Common share
dividends - - - (58,731) - - - (58,731) (1,837) (60,568)
Put option --
non-controlling
interests - - (3,776) - - - - (3,776) - (3,776)
Acquisition of
non-controlling
interests - - 4,242 (3,083) - - - 1,159 (1,159) -
Stock-based
compensation - - 3,821 - - - - 3,821 - 3,821
Transfer
relating to the
exercise of
stock options 1,947 - (1,947) - - - - - - -
Balance, end of