Q2 Adjusted1
$2.03
(10%) q/q, (12%) y/y
Return on equity
Q2 Adjusted1
10.2%
(90 bps) q/q, (170 bps) y/y
PPPT2
Q2 Adjusted1
$153.1MM
(2%) q/q, (4%) y/y
Total PCL
Q2 Adjusted1
$45.4MM
+16% q/q, +50% y/y
CET1 ratio
13.6%
Total capital ratio
17.1%
Q2 Reported
$1.29
(39%) q/q, (42%) y/y
Q2 Reported
6.5%
(390 bps) q/q,(490 bps) y/y
Q2 Reported
$119.5
(19%) q/q, (23%) y/y
Q2 Reported
$45.4MM
+16% q/q, +50% y/y
Common share dividend declared
$0.61/share
+3% q/q, 15% y/y
TORONTO, May 27, 2026 /CNW/ - EQB Inc. (TSX:EQB) today reported earnings for the second quarter and six months ended April 30, 2026.
Adjusted diluted EPS1: $2.03, (10%) q/q and (12%) y/y (reported $1.29)
Adjusted net income1: $78.3 million, (8%) q/q and (17%) y/y (reported $51.3 million)
Adjusted PPPT1,2: $153.1 million, (2%) q/q and (4%) y/y (reported $119.5 million)
Adjusted ROE1: 10.2%, (90 bps) q/q and (170 bps) y/y (reported 6.5%)
Revenue: $302.4 million, (1%) q/q and (4%) y/y (reported $302.4 million)
Book value per share: $81.46, flat q/q and +1% y/y
EQ Bank customers: 659,000, +4% q/q and +18% y/y
Common share dividends declared: $0.61 per share, +3% q/q and +15% y/y
Capital: CET1 ratio of 13.6% and total capital ratio of 17.1%
"The second quarter reflected solid performance during a persistently uncertain economic environment and our team performed well against this backdrop, continuing to demonstrate operating discipline, renewed focus, and financial resilience," said Chadwick Westlake, President and CEO. "As we look ahead to the second half of the year, our business will meaningfully shift with the anticipated July 1 close of our PC Financial transaction, positioning us to serve millions of Canadians as a challenger at scale. Through a new loyalty-linked banking ecosystem, we will provide Canadians with better value, better products, more rewards and new channels, putting real choice and control back into their hands and giving every Canadian the opportunity to get ahead, every day."
PC Financial acquisition accelerating rapidly, set to close July 1, 2026
EQB secured final approval for the acquisition of PC Financial3 (the "Acquisition") from Loblaw Companies Limited ("Loblaw") from the Minister of Finance and National Revenue on May 5, marking a significant regulatory milestone and unlocking the next phase of growth. EQB is set to expand its customer base to 3.3 million Canadians4, add approximately $5.8 billion in assets4 and $800 million in direct retail deposits4
Acquisition cements EQB as the Challenger in Canadian banking by adding a top payments product, scales customer base by >4x4, nearly doubles revenue4 with a 4x increase in non-interest revenue4, and subsequent to close, will become exclusive financial services partner of Loblaw, which brings access to Canada's #1 leading loyalty program PC Optimum™.
The Acquisition is expected to close on July 1, 2026, subject to customary closing conditions
Continued expense discipline positioning EQB to deliver efficiency improvements
Positive impacts of pacing discretionary spending and other items, including a favourable capital tax benefit, partially offset by targeted investments in growth initiatives and higher staff costs, led to a decline of 1% q/q and 4% y/y adjusted expenses1
Reported expenses were up 15% q/q and 13% y/y and included $33.6MM of business exit costs, reflecting actions to reposition and streamline EQB's business mix, acquisition and integration-related expenses tied to the upcoming close of the PC Financial acquisition, and amortization of Concentra Bank and ACM acquisition-related intangible assets
EQB's adjusted efficiency ratio1 in Q2 was up by 30 bps to 49.4% (reported 60.5%), remaining on track against its low-50% adjusted efficiency ratio target for 2026, excluding the impacts of PC Financial
Prudent provisioning levels maintained amid ongoing macroeconomic pressures
EQB's provision for credit losses (PCL) were up +16% q/q, reflecting higher performing and impaired provisions
Higher performing provisions reflects increased delinquencies and elevated macroeconomic uncertainty while the increase in impaired provisions reflects higher personal and commercial PCLs due to increased defaults and deterioration in the commercial and residential real estate markets
Total gross impaired loans increased 8% q/q. Personal balances were modestly higher, driven by a continued subdued residential real estate market, while the increase in commercial was largely attributable to a single insured exposure, partly offset by improvement in the uninsured portfolio
The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 46 bps, compared to 29 bps at Q2 2025
Sustained loans under management growth despite an uncertain operating environment
Commercial lending loans under management (LUM)1 grew 4% q/q and 17% y/y, driven by continued momentum in the insured multi-unit residential mortgages
Personal lending LUM declined 1% q/q and 3% y/y due to declines in insured single-family mortgages, in line with our strategy to optimize returns while maintaining a targeted origination approach for insured volumes
Excluding insured single-family, personal lending LUM was up 1% q/q and 5% y/y despite a slower Canadian housing market; the decumulation lending portfolio grew 5% q/q and 26% y/y and continued to capture market share in this rapidly growing segment
EQ Bank surpassed $10 billion in deposit balances, adding 26,000 new retail and business customers
EQ Bank deposits grew to $10.02 billion in Q2 (+1% q/q and +7% y/y) as customers continued to embrace innovative products including our attractive Personal and no-fee Business Accounts; EQ Bank deposits represented 28% of total deposit principal (up 88bps q/q)
EQ Bank added 26,000 new retail and business customers in Q2 (+4% q/q and +18% y/y) who will have access to a growing suite of personal and business banking products that provide more value on their hard-earned dollars, including the prepaid Business Card
EQ Bank products received industry recognition as customers' products of choice including Best Prepaid Card from creditcardGenius and Best Chequing Account from MoneySense and NerdWallet Canada
Capital supported dividend increase and buyback activity; strong demand for LRCN issuance
EQB declared a dividend of $0.61 per common share payable on June 30, 2026 to shareholders of record as of June 15, 2026, representing +3% and +15% increases from the dividends paid in March 2026 and June 2025, respectively
EQB purchased and cancelled 1,226,734 common shares through its active Normal Course Issuer Bid (NCIB) (2,293,624 repurchased year-to-date), supporting attractive return of capital for shareholders
EQB issued its second series of LRCNs on April 27, 2026, with the order book oversubscribed by ~4x
"Q2 reflected disciplined execution, with strong cost management, prudent credit provisioning and continued growth in loans under management," said Anilisa Sainani, CFO. "Against a more difficult economic environment, we remained focused on performance and the evolution of EQB's business model with a strong balance sheet and clear momentum as we approach the close of the PC Financial acquisition in July."
Analyst conference call and webcast: 10:30 a.m. ET on May 28, 2026
EQB's Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Marlene Lenarduzzi, CRO, will host EQB's quarterly earnings call and webcast. Also joining for the Q&A portion of the call will be Darren Lorimer, EVP Commercial Banking and Daniel Rethazy, EVP Personal Banking. 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 Adjusted measures and ratios are Non-Generally Accepted Accounting Principles (GAAP) measures and ratios. Adjusted measures and ratios are calculated in the same manner as reported measures and ratios, except that financial information included in the calculation of adjusted measures and ratios is adjusted to exclude the impact of one-time acquisition and integration related costs, and certain items which management determines would have a significant impact on a reader's assessment of business performance. For additional information and a reconciliation of reported results to adjusted results, see the "Non-GAAP financial measures and ratios" section of the Second Quarter 2026 MD&A.
2 PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance.
3 On December 3, 2025, EQB and Loblaw entered into a definitive agreement pursuant to which EQB will acquire PC Financial, which is comprised of President's Choice Bank ("PC Bank"), PC® Financial Insurance Agency Inc., PC® Financial Insurance Brokers Inc. and certain other affiliated entities of PC Bank. In connection with the closing of the acquisition, EQB will enter into a long-term strategic relationship with Loblaw pursuant to a commercial agreement to become the exclusive financial partner of the PC Optimum™ loyalty program.
4 Reported standalone measures for PC Financial as of September 2025, unless otherwise stated.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated balance sheets (unaudited)
($000s) As at
April 30, 2026
October 31, 2025
April 30, 2025
Assets:
Cash and cash equivalents
603,233
717,253
500,747
Restricted cash
1,142,653
1,326,684
996,591
Securities purchased under reverse repurchase agreements
2,150,035
1,604,165
2,100,037
Investments
1,378,885
1,645,864
1,450,879
Loans
Loans, Personal
31,532,206
31,857,508
32,587,415
Loans, Commercial
13,536,145
14,581,966
14,794,655
Allowance for credit losses
(227,869)
(206,801)
(153,928)
44,840,482
46,232,673
47,228,142
Securitization retained interests
1,108,002
1,028,623
919,910
Deferred tax assets
30,453
36,429
20,874
Other assets
Derivative financial instruments
223,790
242,799
379,210
Intangible assets
152,528
148,623
193,479
Goodwill
92,545
92,545
110,580
Investment in associate
52,888
49,884
49,839
Other
433,956
368,179
355,052
955,707
902,030
1,088,160
Total assets
52,209,450
53,493,721
54,305,340
Liabilities and Equity
Liabilities:
Deposits
36,633,069
36,616,511
35,036,491
Securitization liabilities
10,635,017
11,197,477
13,548,609
Obligations under repurchase agreements
50,493
104,568
84,092
Deferred tax liabilities
216,232
199,151
190,905
Funding facilities
686,300
1,454,087
1,410,370
Other liabilities
Derivative financial instruments
80,966
94,742
164,815
Other
668,193
615,386
611,896
749,159
710,128
776,711
Total liabilities
48,970,270
50,281,922
51,047,178
Equity:
Common shares
483,598
503,060
510,973
Other equity instruments
345,105
147,360
147,360
Contributed deficit
(17,341)
(15,014)
(19,177)
Retained earnings
2,420,049
2,566,475
2,607,001
Accumulated other comprehensive income
116
1,684
2,344
Total shareholders' equity
3,231,527
3,203,565
3,248,501
Non-controlling interests
7,653
8,234
9,661
Total equity
3,239,180
3,211,799
3,258,162
Total liabilities and equity
52,209,450
53,493,721
54,305,340
Consolidated statements of income (unaudited)
Three months ended
Six months ended
($000s, except per share amounts)
April 30, 2026
April 30, 2025
April 30, 2026
April 30, 2025
Interest income:
Loans, Personal
424,111
461,337
861,352
942,707
Loans, Commercial
194,696
211,991
398,222
434,108
Investment
21,039
19,332
42,208
40,124
Other
25,631
19,912
50,134
45,282
665,477
712,572
1,351,916
1,462,221
Interest expense:
Deposits
294,038
317,391
603,271
665,200
Securitization liabilities
101,901
112,206
205,836
237,774
Funding facilities
5,374
4,765
11,844
10,312
Other
3,432
70
6,793
153
404,745
434,432
827,744
913,439
Net interest income
260,732
278,140
524,172
548,782
Non-interest revenue:
Fees and other income
26,216
22,713
52,646
45,633
Net gains on loans and investments
2,118
1,029
2,082
3,333
Gain on sale from securitization activities
14,152
13,009
30,290
30,625
Net (losses) gains on hedging and derivatives
(854)
1,059
(32)
10,212
41,632
37,810
84,986
89,803
Revenue
302,364
315,950
609,158
638,585
Provision for credit losses
45,351
30,234
84,479
48,912
Revenue after provision for credit losses
257,013
285,716
524,679
589,673
Non-interest expenses:
Compensation and benefits
73,325
74,280
144,447
150,214
Product costs
24,317
25,297
48,655
48,659
Technology and system costs
21,234
22,450
43,129
45,982
Marketing and corporate expenses
32,438
19,231
48,223
36,313
Regulatory and legal and professional fees
22,838
12,744
39,825
25,618
Premises
8,706
7,188
16,942
13,659
182,858
161,190
341,221
320,445
Income before income taxes
74,155
124,526
183,458
269,228
Income taxes
22,839
34,234
52,611
71,226
Net income
51,316
90,292
130,847
198,002
Distribution to LRCN holders
4,410
4,410
4,410
4,410
Net income available to common shareholders and non-controlling interests
46,906
85,882
126,437
193,592
Net income attributable to:
Common shareholders
46,571
85,533
125,787
192,935
Non-controlling interests
335
349
650
657
46,906
85,882
126,437
193,592
Earnings per share:
Basic
1.30
2.23
3.44
5.02
Diluted
1.29
2.21
3.42
4.98
Consolidated statements of comprehensive income (unaudited)
Three months ended
Six months ended
($000s)
April 30, 2026
April 30, 2025
April 30, 2026
April 30, 2025
Net income
51,316
90,292
130,847
198,002
Other comprehensive income, items that will be reclassified subsequently to income:
Debt instruments at Fair Value through Other Comprehensive Income:
Net change in (losses) gains on fair value
(1,583)
3,587
(6,504)
16,027
Recovery of credit losses recognized to income
(81)
-
(193)
-
Reclassification of net (gains) losses to income
(1,577)
(1,523)
7,347
(11,589)
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 (losses) on fair value
1,503
(203)
1,503
868
Reclassification of net gains to retained earnings
-
(490)
-
(868)
(1,738)
1,371
2,153
4,438
Income tax recovery (expense)
438
