Three-quarters of Equitable Bank’s uninsured mortgages to renew at lower rates this year

President and CEO Andrew Moor said 74% of the bank’s uninsured single-family mortgages set to renew this year will see rate relief, and that’s based on no further changes to the Bank of Canada‘s policy rate.

“That’s the advantage of our relatively short duration book,” Moor said on the lender’s Q1 earnings call.

He also said the results of the first quarter were “encouraging,” with originations in that portfolio up 23% compared to last year and 13% compared to last quarter.

“We are seeing this trend continue,” he said. “Our single-family uninsured application volumes increased about 29% year-over-year in the first few weeks of February.”

Similarly, the Equitable’s reverse mortgage portfolio is also seeing “continued strength in demand,” Moor added.

“We see many opportunities to deploy capital to address the needs of Canada’s growing population of retirees through our reverse mortgage and insurance lending lines,” he noted.

Despite the optimism, Equitable did increase its provisions for credit losses to $13.7 million, up 57% from Q4 and 12% from a year ago.

Asked if that’s likely to continue to increase in coming quarters, Marlene Lenarduzzi, Chief Risk Officer, said this: “I think with the provisions we provided so far, we feel are appropriate given everything that we know right now, and I think we’re pretty confident that we’re in good shape.”

Impaired loans within Equitable’s personal lending portfolio increased by $11 million (+4% quarter-over-quarter) to $308.2 million, a slower addition compared to prior quarters. Additionally, $94 million of impaired loans were discharged or resolved during the quarter.

Breakdown of loans under administration ($ billions)

Notables from its earnings call

CEO Andrew Moor commented on the following topics during the company’s earnings call:

• On the outlook for mortgage loan performance: “We expect any losses in residential real estate lending to be small in the context of the business overall. Recent monetary policy easing and house price stability, support our conviction. The cost of that outlook, I would note that $94 million of impaired residential mortgages discharged or resolved in the quarter.”
• On the overall growth outlook : “You’ll hear the word growth more often in the coming year as we take advantage of high-quality lending opportunities that are available to us in our single-family multi-unit residential and accumulation markets.

• On the impact of tariffs: “While the long-term impact of potential tariffs has yet to become clear, six Bank of Canada rate reductions since last June are stimulating the housing market. We believe we can expect further market demand for credit and EQB is ready….Interest rates are down, there’s pent-up demand for housing, None of that’s going away despite the political threats.”

• On customer growth: EQB saw its number of clients jump 23% year-over-year to 536,000. “In the past year, we’ve enjoyed a steady quarter-to-quarter increase in customers choosing to deposit their payroll with us, such that these funds now represent a meaningful ratio of total deposits,” Moor said.

Source: EQB Q1 earnings call

Note: Transcripts are provided as-is from the companies and/or third-party sources, and their accuracy cannot be 100% assured.

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Last modified: February 27, 2025