Market Movers On the Rise
EQB Inc. was higher as it reported third-quarter revenue of $195.7-million after the bell on Tuesday, up from $162-million a year ago. Revenue after provision for credit losses for $190.4-million versus $165.6-million a year ago, the company stated.
Net income of $76.5-million or $2.22 per share compared to $71.4-million or $2.07 per share a year earlier. The expectation was for EPS to come in at $2.13 in the latest quarter, according to S&P Capital IQ.
EQB said it provisioned $5.4-million for credit losses in the third quarter “to account for continued portfolio growth, evolving macroeconomic forecasts and loss modelling that contemplates further increases in interest rates plus various scenarios for economic performance.”
It said net impaired loans were 0.23 per cent of total assets of Sept. 30, up from 0.18 per cent on June 30, “but still lower than the prior eight quarters.”
Total convention loans, including personal and business, grew 29 per cent to $25.1-billion. It said reverse mortgage assets grew the most, or 194 per cent year-over-year, to $514-million. “Growth reflected expanded distribution, increasing brand awareness among those Canadians nearing or in retirement, and market growth,” the company stated.
Raymond James analyst Stephen Boland said: “Overall, this was a strong quarter. EQB reported adjusted EPS of $2.35 vs RJL at $2.23 and consensus at $2.11. Net Interest Margin (NIM) was well above street expectations and drove the bulk of the beat. The 14 basis points expansion quarter-over-quarter was unexpected as rising deposit costs could have pressured NIM until interest rates stabilized. However, EQB is clearly benefiting from recent initiatives to diversify its funding sources and lower its overall cost of capital. Even more positively, further NIM improvement is expected as loans continue to renew at higher yields. We suspect this will be positively received by investors despite concerns around slowing loan growth and the overall credit environment.”