EQB Inc. (Equitable Bank, TSX: EQB) reported continued growth in its mortgage-related portfolios in its Q2 2026 results (ended April 30, 2025), even as it delayed expectations for a full credit recovery into late 2026 and 2027 due to macro headwinds.
Key Highlights from Q2 2026 Results
- Residential Lending Growth:
- Single-family uninsured mortgage portfolio reached $20.6 billion, up +4% year-over-year (y/y) and +2% quarter-over-quarter (q/q). This was driven by strong originations (+28% y/y) and high retention/renewal rates.
- Decumulation lending (reverse mortgages, etc.) hit $2.5 billion, up +45% y/y and +8% q/q.
- Overall loans under management (LUM) grew to $71.5–77.1 billion range across reports, with +9% y/y growth supported by uninsured single-family, decumulation, and insured multi-unit residential lending.
- Credit Performance:
- Elevated provisions and impaired loans persisted, linked to higher interest rates, softer housing market, and challenges in certain 2022-vintage loans.
- Management noted that credit normalization/recovery is now expected to be weighted toward late 2026 and into 2027, citing geopolitical tensions, trade uncertainty, higher energy prices, elevated unemployment, and a softer housing market.
- Gross impaired loans rose, but some executives suggested Q2 may have marked a peak, with improvements anticipated from lower-rate renewals and resolution efforts.
- Other Metrics:
- Strong originations and market share gains in the broker channel, with conservative underwriting (e.g., average LTV ~63% on uninsured single-family, credit scores ~711).
- Dividend increased 18% y/y.
- Total AUM/AUA climbed to ~$134 billion.
- The bank maintained a focus on higher-spread conventional lending amid a challenging environment.
Context and Outlook
EQB, as a Canadian “Challenger Bank,” specializes in alternative/Alt-A uninsured mortgages and niche lending. It has grown its mortgage book by gaining share in a slower housing market, but faces ongoing pressure from high debt servicing costs and economic uncertainty.
Management remains optimistic on long-term growth (high single-digit to low double-digit LUM growth target for 2026), supported by diversified portfolios and capital strength (solid CET1 ratio). However, near-term credit metrics are normalizing from pandemic lows, with full recovery delayed.
This appears to directly reference EQB’s Q2 2026 earnings commentary. For the latest stock reaction, full MD&A, or detailed financials, check EQB’s investor relations site or recent SEDAR filings. If you need analysis on valuation, peer comparison, or something specific (e.g., stock price impact), let me know!