HCG BEAR THESIS COLLAPSED Pt. 3EQB released very strong results for Q2. Some highlights that stood out for me:
- provisions are back to more normal range. Still slightly higher than pre-covid but credit quality continues to be strong and more importantly much better than what market expected
- mortgage deferrals are dropping significantly. It is currently only 30% of peak level (6% of total loans) and EQB expects the remaining deferrals to drop off in Q3
- ROE is back to mid teens and management signaled it will likely increase in the remaining of the year with lower provisioning and NIM expansion
- efficiency ratio improved
many more positives came out of the earnings but these are the main highlights for me atleast
I think HCG will have similar positive results and we will see both stocks going higher in the near future. Valuation for both companies is still VERY CHEAP.