This is one of my largest positions. Fabulous value AND growth for a Canadian bank.
Canada's Challenger Bank™ Now Serves Nearly 275,000 Canadians
TORONTO, May 4, 2021 /CNW/ - Equitable Group Inc. (TSX: EQB) (TSX: EQB.PR.C) today reported record first quarter earnings for the three months ended March 31, 2021 and upgraded its outlook for 2021 on the strength of growth trends at Equitable Bank (Canada's Challenger Bank™) including new account openings and increasing affinity for its smarter banking solutions that enrich the lives of Canadians.
Q1 Net Earnings $69.2 Million +$43.2 Million from 2020
- Q1 diluted EPS $3.97, +172% from suppressed levels in Q1 2020 at the onset of COVID-19
ROE, Book Value, Efficiency Demonstrate Structural Advantages
- Q1 ROE 17.1%, +9.9% from Q1 2020 and above target of 15-17%
- Book value +19% y/y or $15.86 to $97.86 per share (and +5% or $4.51 from Q4 2020)
- Efficiency ratio 38.2%
High-Quality Asset Growth with Industry-Leading Efficiency
- Loans under management +9% y/y to $34.2 billion, (and +2% from Q4)
- Total loan originations +39% y/y to $2.7 billion, Commercial +52% y/y and Personal +28%
- Reverse mortgages +44% q/q and 241% y/y
Capital Ratios Provide Capacity for Future Growth
- CET1 ratio 14.5%, remaining above target range of 13-14%
"Canadians deserve a better commercial and personal banking experience, and they are finding it at Equitable, the recent recipient of Canada's Best Bank award from Forbes and an institution that challenges itself to persistently innovate for customers. The ongoing efforts of our team produced outstanding first quarter results. Customer account openings at EQ Bank increased 92% from a year ago to nearly 202,000 with 28,000 new customers joining us in Q1 helping to drive deposits up by $1.2 billion in just three months. Lending surpassed our expectations with no change in our conservative risk management approach but strong asset gathering in Conventional commercial, Insured multis, Wealth decumulation solutions and a return to market leadership on new originations in Alternative single family. Based on the way customers are embracing Canada'sChallenger BankTM, and the trend lines in our deposit and lending businesses, we are pleased to raise our outlook for 2021," said Andrew Moor, President and Chief Executive Officer.
New 2021 Outlook Features Higher Expectations for Conventional Loan Growth and EQ Bank Deposits
- Equitable's revised 2021 outlook now includes full year-over-year EQ Bank deposit growth of 30-50% (upgraded from 20-30%) and total loan growth of 8-12% (upgraded from 6-10%), including increases in Commercial finance group (20-25% growth from 12-15%), Alternative single family mortgages (12-15% from 5-8%) and Reverse mortgages to 200%+ (from 100%+).
- The improved growth outlook for conventional commercial and personal loans is expected to create additional momentum for 2022.
Reaffirming Confidence in Medium-Term Growth Objectives
- Equitable is reaffirming its medium-term performance and growth objectives which are found in its Q1 2021 MD&A.
EQ Bank Deposits Exceed $6 Billion in Deposits in early April 2021
- EQ Bank's customer base grew 92% over the past 12 months and 16% in Q1 to nearly 202,000 with 28,000 new accounts opened in the first three months of the year.
- EQ Bank deposits increased 114% since Q1 2020 to $5.8 billion at March 31, 2021 and $1.2 billion within the first quarter reflecting growth in the customer base and the introduction of new services including the EQ Bank RSP, EQ Bank TSFA and the EQ Bank Joint Savings Account.
- Customer engagement – measured by use of services each month and the number of products held per customer – increased substantially year over year.