More than 80% of its customers have already renewed their mortgages despite higher rates, says CEO
The customers of EQB Inc. (EQB) have been able to wade through the shock of interest rates according to Andre Moor, EQB’s chief executive officer.
With major banks in Canada expecting to see more mortgage renewals at higher rates in the next few years, Moor said that about 80% of its customers had already renewed their mortgage without any large increase in reported delinquencies despite the increases.
Notably, EQB generally offers mortgages with shorter terms compared to larger banks.
Its adjusted earnings for the quarter amounted to $147 million ($3.80 per diluted share). The bank also set aside $19.6 million in provisions for credit losses in the fourth quarter.
As some people struggle with the higher interest rates, Moor said that he was surprisingly comfortable with the company’s client base.
“A small segment, it’s certainly affecting more, that’s for sure,” he said.
“Certainly so far, we’re not seeing the kind dramatic shift that you might expect as people reset to the high interest rates,” he added.
EQB reportedly garnered revenue of $395 million and net income of $141 million in its extended fourth quarter ending on Oct 31. Its fourth quarter spanned for four months, while its 2023 fiscal year took up 10 months as it skipped the third quarter to align its fiscal year with other larger banks.
According to Moor, this change was to allow a more direct comparison with other banks as it was sometimes grouped in with other financial services.
“It probably gives better exposure with the investors who are interested in investing in banks,” said Moor.