Slide 1: EQB Inc. Q4 2023 Results
EQB Inc. Q4 2023 Results December 8, 2023 TSX: EQB | EQB.PR.C We believe this image is a powerful expression of our commitment to challenge the status quo in Canadian banking. We believe the confidence depicted is synonymous with EQB’s bold ambition to drive change that enriches people’s lives. Our
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Certain forward-looking statements may be made in this presentation, including statements regarding possible future business, financing and growth objectives. Such forward looking information is presented for the purpose of assisting the holders of EQB In
Slide 3: Change of EQB's fiscal year
Change of EQB’s fiscal year EQB has changed its fiscal reporting period to end on October 31 rather than December 31. With this change, EQB’s reporting cycle is now consistent with Canada’s publicly traded banks. During the transition, comparative periods will differ. For this presentation: • Q4 202
Slide 4: Andrew Moor, President & CEO
Andrew Moor President & CEO 4
Slide 5: Reflection: 10-year picture of EQB's assets and deposits
Reflection: 10-year picture of EQB’s assets and deposits demonstrates our evolution From 2013 to 2023 ($B) Deposits Personal - LUM1 Commercial - LUM1 5.0x 7.3x 4.0x 31.6 32.4 30.0 7.6% 9.4% 32.5% 10.9% 26.1% 60.1% 7.5 66.7% 6.4 50.3% 4.4 99.7% 84.2% 67.9% Q4/13 Q4/23 Q4/13 Q4/23 Q4/13 Q4/23 Corporat
Slide 6: Overview: Canada's Challenger Bank on a mission to drive change
Overview: Canada’s Challenger BankTM on a mission to drive change in Canadian banking to enrich people’s lives Fiscal-year #1 by Innovative ROE $111 billion +93,000 Alignment Forbes Products North star objective Record assets Transition to EQ Bank was Customers joining EQ Bank Payment of generating
Slide 7: Commercial business financing high demand multi-unit properties
We are in the Commercial business of financing and supporting high demand multi-unit properties Loans Under Management ($B) Of total LUM, insured multi-unit residential mortgages account for 32% Personal (excl. insured single family mortgages) Insured single family mortgages • 73% of the total Comme
Slide 8: Canada's urban markets urgently need housing
Canada’s urban markets urgently need housing, and we are here to help Stats on Canada’s urban housing market Average rent for a 2-bedroom apartment Average price for multi-unit and vacancy rate for multi-unit residential buildings in the GTA1 residential housing across Canada2 Price Per Suite (’000)
Slide 9: Personal uninsured lending portfolio +5% Y/Y
Personal uninsured lending portfolio +5% Y/Y, within the 5 to 8% 10-month guidance provided in Q2 Personal – Loans Under Management ($B) Decumulation loans Single family mortgages – uninsured +42.9% +2.7% 1.5 +17.7% 19.4 19.5 +0.3% 18.9 1.2 1.0 13.4 9.8 0.3 0.1 Q4/20 Q4/21 Q4/22 Q2/23 Q4/23 Q4/20 Q4
Slide 10: Looking forward to welcoming ACM Advisors
Looking forward to welcoming ACM Advisors 30-year history of delivering value for institutional and accredited retail investors and commercial borrowing customers ACM will mark EQB’s entry into wealth and alternative asset management in asset classes we understand well Adds ~$5 billion in assets und
Slide 11: Chadwick Westlake, CFO
Chadwick Westlake CFO 11 11
Slide 12: Financial Results Overview: achieving all key earnings targets
Financial Results Overview: Another year of solid execution, achieving all key earnings targets EQB’s key adjusted1 financial metrics F23 Results F23 Guidance Achieved (Ten months) (Ten months) Return on equity (ROE)1 17.1% (17.5% reported) 16%+ ✓ Pre-Provision Pre-Tax Income (PPPT)1 $529 million ($
Slide 13: Financial Results Overview: Performing ahead of guidance
Financial Results Overview: Performing ahead of guidance despite economic headwinds Adjusted1 Reported In $MM, unless otherwise noted and Q4/23 F23 Q4/23 F23 QQ / YY YY QQ / YY YY except for per share amounts (Four months) (Ten months) (Four months) (Ten months) ROE 16.5% (1.8%) / 0.6% 17.1% 1.4% 15
Slide 14: Net Interest Margin: Expansion from funding diversification
Net Interest Margin: Expansion from funding diversification and allocation to higher margin lending activities Net Interest Income and Margin Net Interest Income ($MM) Net Interest Margin (%) Adjusted1 / Reported Adjusted1 / Reported F23: $834MM / $838MM (10 months) F23: 1.97% / 1.98% (10 months) F2
Slide 15: Funding: Diversified sources of funding matched against loan maturities
Funding: Diversified sources of funding matched against loan maturities; 95% of deposits are either term or insured Total Deposit Principal ($B) Corporation & Institutional Credit Union Brokered HISAs / Partnerships EQ Bank Covered Bonds Brokered Term Deposit Notes Total Deposits Principal -0.6% Q/Q
Slide 16: Non-Interest Revenue: Growing well
Non-Interest Revenue: Growing well and on track to represent 12-15% of total revenue by 2027 Non-Interest Revenue Non-interest revenue as a % of total revenue Non-Interest Revenue ($MM) F23 F22 Fees and other income 46.9 31.1 Gains (losses) on strategic investments 29.0 (5.3) Net gains (losses) on o
Slide 17: PCL and ACL: Appropriately provisioned
PCL and ACL: Appropriately provisioned Provision for Credit Losses ($MM) Net Allowance for Credit Losses1 ($MM) PCL ratio Stage 1 & 2 (Performing) Stage 3 (Impaired) ACL ratio (net of cash reserves) Stage 3 (Impaired) Stage 1 & 2 (Performing) Cash reserves Adjusted PCL ratio 7 bps (excl. accounting
Slide 18: Non-Interest Expenses: Investing in long-term franchise value
Non-Interest Expenses: Investing in long-term franchise value and benefitting from synergies Non-Interest Expenses ($MM) Efficiency Ratio (%) Integration costs & one-time items Efficiency - adjusted1 Adjusted1 Efficiency - reported Includes roughly $37MM in integration +15.5% related costs and one-t
Slide 19: Looking Ahead: 2024 Guidance
Looking Ahead: 2024 Guidance EQB’s key adjusted1 financial metrics F24 Guidance2 Return on Equity (ROE) 15%+ Pre-Provision Pre-Tax Income (PPPT) $660 - 700 million Diluted EPS $11.75 - 12.25 / share Dividend 20 - 25% BVPS 13 - 15% CET1 13%+ Core portfolio metrics Total Loans Under Management On and
Slide 20: Final Thoughts
Final Thoughts… 1 Expect increased brand awareness for 2024 2 Continued momentum for our Challenger story 3 Delivering best long-term shareholder return 20 20
Slide 21: Investor Relations
Sandie Douville David Lee Vice President Senior Manager IR & ESG Strategy IR & ESG Strategy Investor Relations https://eqb.investorroom.com investor_enquiry@eqb.com Maggie Hall Director PR and Communications maggie.hall@eqbank.ca
Slide 22: Appendix
Appendix
Slide 23: Appendix 1: 10-year Total Shareholder Return (Nov 2023)
Appendix 1: 10-year Total Shareholder Return (Nov 2023) EQB is at the top; #1 amongst TSX and S&P500 Peers 10-yr Total Shareholder Return1 Ticker Banks Country Cumulative CAGR 10-yr BVPS CAGR1 10-yr EPS CAGR1 EQB-CA EQB Inc. Canada 286.3% 14.5% 15.3% 14.6% JPM-US JPMorgan Chase & Co. US 260.7% 13.7%
Slide 24: Appendix 2: Personal and Commercial LUM
Appendix 2: Personal and Commercial LUM Loans Under Management ($B) Personal Commercial Specialized financing loans Mortgages - to Corporates Consumer lending Single family mortgages - insured Equipment financing Construction loans Decumulation loans Single family mortgages - uninsured Mortgages - t