EQB (EQB) TD Financial Services & Fintech Summit summary

Strategic positioning and differentiation

• Operates as a digital, cloud-based, broker-led challenger bank focused on innovation and efficiency in the Canadian market.

• Emphasizes technology, talent, and a challenger mindset to drive positive change and enrich customer experience.

• Prioritizes capital allocation within Canada and supports fintech innovation, including open banking initiatives.

• Maintains a diversified business model with both personal and commercial banking, and recent expansion into wealth management.

• Focuses on underserved segments, offering products with ease, high rates, and low or no fees, and strong ESG commitments.

Financial performance and growth outlook

• Achieved double-digit revenue growth, with Q2 revenue up 20% year-over-year and strong customer acquisition.

• Balance sheet and earnings are balanced between personal and commercial segments, with assets under management exceeding CAD 123 billion.

• Loan growth guidance for 2024 is 8%-12%, with high conviction in decumulation lending (40%-60% growth) and insured multi-unit lending (20%-25% growth).

• Recent rate cuts by the Bank of Canada are expected to gradually unlock pent-up housing demand.

• Maintains a North Star of 15%+ ROE, with a 10-year average of 16%, and high conviction in meeting 2024 guidance.

Net interest margin and funding

• Net interest margin (NIM) expanded to 2.11% in Q2, driven by lending to higher-growth asset classes and funding diversification.

• Sustainable NIM drivers include growth in low-cost EQ Bank deposits and successful wholesale funding programs.

• Shorter duration of equity and diverse funding stack expected to provide stability and potential for further NIM expansion.

• Strategic choices, such as positioning of EQ Bank's demand rate, will influence NIM in the coming years.