EQB (EQB) RBC Capital Markets Canadian Bank CEO Conference 2025 summary

Credit quality and portfolio management

• Long-haul transportation loans, about 40% of the equipment financing business, have been volatile, but exposure has been reduced and oversight increased with a new CEO in place.

• Losses in equipment financing are expected to be 150–200 bps annually, while other portfolios, mainly residential and multifamily mortgages, have historically low losses.

• Lower default rates and stable truck values are supporting improved credit performance in the long-haul segment.

• Monetary policy easing is expected to further reduce credit provisions.

• A broader game plan for equipment leasing is being developed, with a focus on repositioning rather than divestiture.

Loan growth and business outlook

• Double-digit growth in mortgage originations is expected in Q1, with overall loans under management projected to rise 8–12% in 2024.

• Reverse mortgage and multifamily insured lending are key growth areas, supported by unique funding strategies and strong market demand.

• The spring housing market is anticipated to drive further growth as pent-up demand is released.

• The bank has a history of 13% compound annual loan growth over the past decade.

Net interest income and revenue diversification

• Net interest income (NII) is expected to grow 3–4% in 2024, with stronger growth in 2025 as the asset base expands.

• Margins are under slight pressure due to competitive deposit rates, but new products like Notice Savings Accounts help manage funding costs.

• Non-interest income has grown from 6% to 16% of total income since 2022, with a target of 20% in the coming years, driven by new services and wealth initiatives.