Q3 2025 EQB Inc Earnings Call
Joanna: Welcome to EQB's earnings call for the third quarter of 2025. This call is being recorded on Thursday, August 28, 2025. At this time, you are in a listen-only mode. Later, we will conduct a question-and-answer session for analysts. Instructions will be provided at that time. It is now my pleasure to turn the call over to Lamar Prasad, Vice President and Head of Investor Relations. Please go ahead.
Welcome to the EQB earnings call for the third quarter of 2025. This call is being recorded on Thursday, August 28, 2025. At this time, you are in a listen-only mode. Later, we will conduct a question-and-answer session for analysts; instructions will be provided at that time. It is now my pleasure to turn the call over to Lamar Prasad, Vice President and Head of Investor Relations. Please go ahead.
Stephen Boland: Thank you, Joanna, and good morning, everyone. I'm excited to be sitting on this side of the call after following Canada's Challenger Bank and the financial services sector for several years. Your hosts for today's Q3 results call are Vincenza Serra, Chair of the Board of EQB Inc., the newly appointed President and CEO, Chadwick Westlake, Marlene Lenarduzzi, Chief Risk Officer, who served as Interim President and CEO during the quarter, and David Wilkes, SVP, Chief Strategy and Growth Officer. As announced yesterday, our new CFO, who joined us as of today, Annalisa Sainani, is also here with us in the room. For those on the phone lines only, we encourage you to also log into our webcast and view our quarterly presentation, which will be referenced during the prepared remarks.
Thank you, Joanna, and good morning, everyone. I'm excited to be sitting on this side of the call after following Canada's challenger bank and the financial services sector for several years.
Your host for today's Q3 results call are Vincenza Sarah, Chair of the Board of EQB; the newly appointed President and CEO, Chadwick Weslake; Marlene Lenard; Uzi, Chief Risk Officer, who served as Interim President and CEO during the quarter; and David Wils, SVP, Chief Strategy and Growth Officer. As announced yesterday, our new CFO, Alisa Sani, who joined us as of today, is also here with us in the room.
Stephen Boland: On slide two of our presentation, you will find EQB Inc.'s caution regarding forward-looking statements, as well as the use of non-IFRS measures. All figures referenced today are on an adjusted basis where applicable, unless otherwise noted. With that, I will turn it over to Vin.
For those on the phone lines, we encourage you to log into our webcast to view our quarterly presentation, which will be referenced during the prepared remarks.
Vincenza Serra: Thank you, Lamar, and good morning, everyone. This is the beginning of a new era for EQB, and it's my pleasure to take this opportunity to join the leaders of the team entrusted to create next-generation value for their first earnings call. I want to again express our sadness as we all mourn the loss of our friend, colleague, and fierce champion for all Canadians, Andrew Moor. What drove Andrew to be such an inspiring leader for all of us was his steadfast belief that Canadians deserve so much better from their banks. Andrew's meaningful impact on all who knew him and on the Canadian banking industry is permanent. I also want to thank Marlene for her exceptional service as Interim President and CEO. This week, she returns to her previous role as Chief Risk Officer.
On slide 2 of our presentation, you will find EQB's caution regarding forward-looking statements as well as the use of non-IFRS measures. All figures referenced today are on an adjusted basis where applicable, unless otherwise noted. With that, I will turn it over to Vin.
Thank you, Lamar, and good morning, everyone.
This is the beginning of a new era for EQB, and it's my pleasure to take this opportunity to join the leaders of the team and be trusted to create next-generation value for their first earnings call.
If so, I want to again express our sadness as we all mourn the loss of our friend, colleague, and fierce champion for all Canadians, Andrew Moor.
What drove Andrew to be such an inspiring leader for all of us was his steadfast belief that Canadians deserve so much better from their banks. Andrew's meaningful impact on all who knew him, and on the Canadian banking industry, is permanent.
Vincenza Serra: The last few months have demonstrated clearly that we have a deep bench with leaders at all levels willing and able to step up. After completing our thorough and years-long succession planning process, we celebrate Chadwick's return to EQB at the beginning of this week. Speaking on behalf of the Board, I am here to express our full support for Chadwick. He is the capable, energetic, and experienced leader we need to take EQB to the next level of growth and performance. We look forward to collaborating with Chadwick as he develops the strategic plan to move our company forward in the months and years to come. Chadwick will offer his initial thoughts on the way forward to wrap up the call. Now, I'll turn it over to Marlene to start with some comments on results for Q3.
This week, she returns to her previous role as Chief Risk Officer.
The last few months have demonstrated clearly that we have a deep bench with leaders at all levels willing and able to step up.
After completing our thorough and years-long succession planning process, we celebrate Chadwick's return to EQB at the beginning of this week.
Speaking on behalf of the board, I am here to express our full support for Chadwick. He is a capable, energetic, and experienced leader. We need to take EQB to the next level of growth and performance.
We look forward to collaborating with Chadwick as he develops the strategic plan to move our company forward in the months and years to come.
Chadwick will offer his initial thoughts on the way forward to wrap up the call.
Marlene Lenarduzzi: Thank you, Vin, and good morning. For today's call, I'm going to speak to the overall results of the quarter before addressing credit. At a high level, we faced challenges this quarter, and there are positives to share as well. Despite headwinds, our capital levels remain strong and much higher than regulatory minimums, which importantly underscores our resilience. Looking at our lending portfolios, loans under management increased 3% sequentially and 10% year-over-year to approximately $74 billion. Combined with our administrative assets, we stood at a new record of $137 billion at quarter end, up 9% year-over-year. Of note, conventional lending, which is the most significant contributor to net interest income, increased 2% quarter-over-quarter to $34.6 billion and is up 6% year to date. By business, the personal lending portfolio benefited from single-family origination growth, driving uninsured loans under management to $24.4 billion, up 2% quarter-over-quarter and 8% year-over-year.
Now, let's alternate over to Marlene to start with some comments on results for Q3.
Thank you, Vin, and good morning for today's call. I'm going to speak to the overall results of the quarter before addressing credit.
At a high level, we face challenges this quarter.
And there are positives to share as well.
Despite headwinds.
Our capital levels remain strong and are much higher than regulatory minimums, which, importantly, underscores our resilience.
Looking at our lending portfolio, loans under management increased 3% sequentially and 10% year-over-year to approximately $74 billion.
And combined with our administrative assets, this stood at a new record of $137 billion at quarter-end, up 9% year-over-year. Of note, conventional lending, which is the most significant contributor to net interest income, increased 2% quarter-over-quarter to $34.6 billion and is up 6% year-to-date.
The personal lending portfolio benefited from single family origination growth, driving uninsured loans under management to $24.4 billion, up 2% quarter-over-quarter and 8% year-over-year.
Marlene Lenarduzzi: Single-family uninsured originations in the quarter increased 30% year-over-year. Our decumulation lending portfolio reached a record of $2.7 billion, up 8% sequentially and 41% year-over-year. In commercial banking, we capitalized on our leadership in lending to the insured multi-unit residential market. CMHC insured multi-unit residential loans under management grew 8% sequentially and 30% year-over-year to $31.4 billion. Commercial lending, excluding insured multies, grew to $10.2 billion or 3% quarter-over-quarter, driven by growth in insured construction lending. For EQ Bank, we added 26,000 new customers, a gain of 21% year-over-year, while deposits increased at their fastest sequential rate in almost three years to $9.7 billion. Despite this progress, revenue and earnings performance for the quarter was below expectations, resulting in ROE of 12.4% year to date. Headwinds in credit have persisted, costs of funds have increased, and expense growth outpaced revenue growth.
In Q3 2025, originations in the quarter increased 30% year-over-year. Our day-um lending portfolio reached a record of $2.7 billion, up 8% sequentially and 41% year-over-year.
In commercial banking, we capitalize on our leadership in lending to the insured multi-unit residential market.
CMAC ensures multi-unit residential loans under management grew 8% sequentially and 30% year-over-year to $31.4 billion.
Commercial lending, excluding insured multis, grew to $10.2 billion, or 3% quarter-over-quarter, driven by growth in insured construction lending.
For EQ Bank, we added 26,000 new customers, a gain of 21% year-over-year, while deposits increased at their fastest sequential rate in almost 3 years to $9.7 billion.
Despite this progress.
Revenue and earnings performance for the quarter was below expectations.
Resulting in a ROE of 12.4% year to date.
Headwinds and credits have persisted; the cost of funds has increased.
Marlene Lenarduzzi: As a result of this lower performance year to date, we anticipate ROE for fiscal 2025 will be around 11.5%. Now, turning to credit, credit was more challenging again in Q3 in the context of the macroeconomic environment. We leveraged forecasted macroeconomic scenarios developed by Moody's Analytics, which evolved more negatively this quarter, resulting in $10 million of additional provisions on performing loans, bringing our total Stage I and II allowances for credit losses to 27 basis points, up from 25 basis points in Q2 2025 and up from 20 basis points in Q3 2024. Performing provisions were driven by $4.4 million in commercial, $3.2 million in personal lending, and $2.3 million in equipment financing. This brings our overall allowance to $174.4 million in the quarter, or 33 basis points, up 4 points sequentially and 7 points year-over-year.
And expense growth outpaced revenue growth.
As a result of this lower performance year to date, we anticipate ROE for fiscal 2025 will be around 11.5%.
Now, turning to credit.
Credit was more challenging again in Q3 in the context of the macroeconomic environment.
We leverage forecasted macroeconomic scenarios developed by Moody's Analytics, which evolved more negatively this quarter, resulting in $10 million of additional provisions. On performing loans, this brings our total Stage 1 and 2 allowances for credit losses to 27 basis points, up from 25 basis points in Q2 2025 and up from 20 basis points in Q3 2024. Performing provisions were driven by $4.4 million in commercial, $3.2 million in personal lending, and $2.3 million in equipment financing.
This brings our overall allowance to $174.4 million in the quarter, or 33 basis points, up 4 points sequentially and 7 points year-over-year.
Marlene Lenarduzzi: Stage III provisions were relatively flat quarter-over-quarter at $22.9 million, with increased provisions in single-family residential mortgages offset by a reduction in provisions in our equipment financing portfolio. Impaired provisions on personal loans were $9.6 million, mainly driven by larger loans and a small pocket of loans in Toronto suburbs, where we have observed steeper price declines from their peak. Stage III provisions in commercial were $6.4 million, down $0.4 million quarter-over-quarter. Like personal lending, most of these provisions are related to a small set of existing impaired loans. Equipment financing Stage III provisions were down to $6.9 million, $3.7 million lower than in Q2. Now, turning to gross impaired loans. The impacts of the macroeconomic conditions have contributed to an increase in gross impaired loans of 5% quarter-over-quarter to $815 million, driven largely by personal lending.
Offset by a reduction in provisions in our equipment financing portfolio.
Impaired provisions on personal loans were $9.6 million, mainly driven by larger loans and a small pocket of loans in Toronto suburbs, where we have observed steeper price declines from their peak.
Stage 3 provisions and Commercial were down $6.4 million, or $0.4 million quarter over quarter.
Like personal lending, most of these provisions are related to a small set of existing impaired loans.
Equipment financing stage 3: provisions were down to $6.9 million, $3.7 million lower than in Q2.
Now, turning to gross impaired loans.
The impacts of the macroeconomic conditions have contributed to an increase in gross impaired loans of 5% quarter over quarter to $815 million, driven largely by personal lending.
Marlene Lenarduzzi: Gross impaired loans in personal lending increased to $352 million this quarter, a 9.5% increase from Q2. This was largely driven by credit migration and a softening in the housing market. However, we have seen a decrease in formations in early-stage delinquencies. Gross impaired loans in commercial lending and equipment financing were relatively flat over the quarter. We remain confident in the quality of our lending portfolios and our prudent approach to managing the lending portfolios through the credit cycle. In early 2024, we enhanced our underwriting criteria in vulnerable segments, which manifested in a decrease in personal lending early-stage delinquencies that I talked to earlier. In our uninsured SFR portfolio, our average credit score is 711, our overall LTV is 64%, and our average origination LTV is 71%, reflecting our disciplined approach to underwriting. All these factors lead to a portfolio that is much more resilient to potential stress.
Gross impaired loans and personal lending increased to $352 million this quarter, representing a 9.5% increase from Q2.
This was largely driven by credit migration and a softening in the housing market.
However, we have seen a decrease in formations in early-stage delinquencies.
Gross impaired loans in commercial lending and equipment financing were relatively flat over the quarter.
We remain confident in the quality of our lending portfolios and our prudent approach to managing the lending portfolios through the credit cycle.
In early 2024, we enhanced our underwriting criteria in vulnerable segments, which manifested in a decrease in personal lending. Early stage of liquid season. I talked to earlier,
In our uninsured SFR portfolio, our average credit score is at 711.
Our overall LTV is 64%, and our average origination LTV is 71%, reflecting our disciplined approach to underwriting.
All these factors lead to a portfolio that is much more resilient to potential stress.
Marlene Lenarduzzi: Interest rates have come down since their peak in 2022, and a further rate cut may occur in the fall. This should provide support for medium and long-term growth. In the near term, economic headwinds may continue to delay resolutions beyond Q4 and into 2026. In conclusion, the adjustments made across our businesses over the last 18 months are building resiliency into all our lending portfolios. Now, over to David.
Interest rates have come down since their peak in 2022, and a further rate cut may occur in the fall.
This should support. This should provide support for medium- and long-term growth.
In the near term, economic headwinds may continue to delay resolutions beyond Q4 and into 2026.
In conclusion, the adjustments made across our businesses over the last 18 months are building resiliency into all our lending portfolios. Now over to David.
Annalisa Sainani: Thank you, Marlene. I'll walk through the financials. Overall, EQB's net income for the quarter was $80.3 million, down 15% from Q2 and 32% year-over-year. Diluted EPS was $2.07 and ROE was 10.1%. Despite headwinds, these results also reflect our disciplined approach to growth in a complex environment, including a focus on credit quality and diversified funding, which strengthens our platform and positions us well for the future. Let me unpack the drivers of our earnings this quarter. Our revenue in Q3 was $310 million, down 2% quarter-over-quarter and 5% from last year, driven primarily by net interest income and the influence of year-over-year declines in policy rates. Net interest income was $254 million, down 6% quarter-over-quarter and the same year-over-year. Of the $17 million decline quarter-over-quarter, over half can be attributed to the one-time benefit mentioned last quarter on the call, nearly $8.5 million or 7 points of NIM.
Thank you, Marlene. I'll walk through the financials.
Overall, EQB's net income for the quarter was $80.3 million, down 15% from Q2 and 32% year-over-year.
To DPS was $207 and ROE was 10.1%.
Despite headwinds, these results reflect our disciplined approach to growth in a complex environment, including a focus on credit quality and diversified funding. This strengthens our platform and positions us well for the future.
Let me unpack the drivers of our earnings this quarter.
Our revenue in Q3 was $310 million, down 2% quarter-over-quarter and 5% from last year.
Driven primarily by net interest income and the influence of year-over-year declines in policy rates.
That interest income was $254 million, down 6% quarter over quarter and the same year over year. Of this amount, $17 million can be attributed to the one-time benefit mentioned last quarter on the call.
Nearly 8.5 million or 7 points of NIM.
Annalisa Sainani: As you've heard consistently from us, we manage EQB to a target one-year duration of equity, which limits exposure of our economic value of equity to interest rate movements. However, there are areas of NII that can be affected as the lending book and interest rates change. In the quarter, there were three main drivers. First, mix shifts in the lending portfolio as some higher margin lending matured and repriced, including some commercial loans with floor rates that had been contributing to NII. Second, a decline in contribution from EQ Bank as we purposely maintained some product rates as prime declined and as customers increasingly choose deposit products such as our Nota Savings Account and Payroll for Every Day. These products provide clients with higher rates and deliver great value for EQ Bank through stronger engagement and more stable lasting deposits.
As you will have heard consistently from us, we managed it to be to a target of 1-year duration of equity, which limits our exposure of economic value of equity to interest rate movements. However, there are areas of concern that can be affected as the lending book in interest rates changes. In the quarter, there were three main drivers.
First, mix shifts in the lending portfolio as some higher-margin lending matured and repriced, including some commercial loans with floor rates that had been contributing to knee.
We second a decline in contribution from YouTube Bank, as we purposely maintained some product rates, as Prime declined. And as customers increasingly...
Choose deposit products such as our Notice Savings Account and payroll for every day.
Annalisa Sainani: The third factor, NII, was also impacted in the quarter due to a higher liquidity portfolio associated with higher securitization activity, as well as more activity in our wholesale funding program. Our net interest margin was 1.95%, declining 25 basis points from elevated levels in Q2. Year-to-date NIM was 2.07%, and we continue to expect to meet our fiscal 2025 NIM target of above 2% for the year. On non-interest revenue, as expected, we had a stronger quarter delivering $56 million and an increase of 25% from Q2 in line with last year. This is primarily attributable to higher fee-based income, including contributions from ACM Advisors and Concentra Trust, higher revenue from our insured multi-unit securitization business with increased activity this spring, as well as some gains on strategic investments.
These products provide clients with higher rates and deliver great value for EQ Bank through stronger engagement and more stable, lasting deposits.
As well as more activity in our wholesale funding program.
Our net interest margin was 1.95%, declining by 25 basis points from elevated levels in Q2, where year-to-date it was 2.07%. We continue to expect to meet our fiscal 2025 NIM target of above 2% for the year.
On not-interest revenue as expected, we had a stronger quarter, delivering $56 million.
An increase of 25% from Q2. In line with last year, this is primarily attributable to higher fee-based income, including contributions from ACM and consent to trust.
Higher revenue from our insured multi-unit securitization business with increased activity this spring.
Annalisa Sainani: Provisions, as noted by Marlene Lenarduzzi, remained elevated in the quarter at $34 million, representing 28 basis points of loan assets. Moving to expenses, non-interest expenses grew to $166 million in the quarter, up 6% from Q2. This was largely driven by investments in our Challenger team, technology spend, and an increase in premises expenses as we moved our new headquarters to our new headquarters in the EQ Bank Tower in late April. The efficiency ratio increased to 53% in the quarter and above our historical operating range. On funding, as Marlene Lenarduzzi said, more customers are depositing more money with EQ Bank as total deposits reached a record $9.7 billion. We also saw a notable rise in demand deposits, reaching $5.9 billion, up 9% quarter-over-quarter and 47% from last year.
As well as some gains on strategic investments.
Provisions, as noted by Marlene, remained elevated in the quarter at $34 million, representing 28 basis points of loan assets.
Moving to expenses, not interested. Expenses grew to $6,166 million in the quarter, up 6% from Q2, and this was largely driven by investments in our Challenger team technology. Spend increased due to higher premises expenses as we moved to our new headquarters in the EQ Bank Tower in late April.
Efficiency ratio increased to 53% in the quarter and is above our historical operating range.
On funding, as Marlene said, more customers are depositing more money with CT Bank. Total deposits reached a record $9.7 billion, and we also saw a notable rise in demand deposits.
Annalisa Sainani: EQ Bank's demand deposit growth has been driven by customers choosing EQ's Nota Savings Account and new and current customers bringing their direct deposits to EQ Bank. These demand deposits are more flexible for EQB Inc. and are more cost-effective relative to other deposits, with the pricing being continuously optimized to balance long-term customer and deposit growth and near-term margin contribution. In the quarter, we were also very active in wholesale funding channels, an important part of our funding diversification strategy. In Q3, we completed our latest benchmark covered bond issuance, raising €500 million. In May, we completed a three-year $350 million deposit note issuance. Subsequent to quarter end, we also issued a $300 million floating rate deposit note that closed on the first day of August. Our activity in this market has continued to lead to tighter pricing, helping make this funding even more attractive to EQB Inc.
Reaching $5.9 billion, up 9% quarter-over-quarter and 47% from last year.
Eubanks demand, deposit growth has been driven by customers to using eqs. Notice savings account and new and current customers bringing their direct deposits to EQ Bank.
These demand deposits are more flexible for EQB and are more cost-effective relative to other deposits.
With the pricing being continuously optimized to balance, long-term customer and deposit growth, and near-term margin contribution.
In the quarter, we are also very active in wholesale funding channels, an important part of our funding diversification strategy.
And in Q3, we completed our latest benchmark covered bond issuance, raising €500 million. In May, we completed a 3-year, €350 million deposit note issuance. Subsequent to quarter end, we also issued a $300 million floating rate deposit note that closed on the first day of August.
Our activity in this market has continued to lead to tighter pricing, helping make this funding even more attractive to EQB.
Annalisa Sainani: I'll finish on capital. The bank is supported by a strong capital position with total capital of 15.7% and CET1 of 13.3%, exceeding the bank's targets and well exceeding regulatory minimums. EQB Inc.'s capital allocation approach continues to prioritize reinvestment in organic growth, maintaining capital flexibility in order to pursue potential strategic inorganic growth opportunities and steadily increasing dividends. EQB's Board of Directors declared a dividend of $0.55 per common share payable on September 30, representing a 17% increase year-over-year. Finally, I'll remind you that as part of our capital allocation framework, we will opportunistically use normal course issuer bid, which was renewed and expanded in January. Share buybacks, while subject to market conditions, are another lever we can pull to maximize long-term value for shareholders. In summary, we move forward with strong capital levels that support our customers, our challengers, and the next phase of our growth agenda.
I'll finish on Capitol.
The bank is supported by a strong capital position, with total capital of 15.7% and CET1 of 13.3%, both exceeding the bank's targets and well exceeding regulatory minimums.
EQB's capital allocation approach continues to prioritize reinvestment in organic growth.
Maintaining capital flexibility in order to pursue potential strategic inorganic growth opportunities and steadily increase dividends.
ETB, the board of directors, declared a dividend of $0.55 per common share, payable on September 30th.
Representing a 17% increase year-over-year?
As part of our capital allocation framework, we will opportunity list. Statistically, we use normal course issuer bids, which were renewed and expanded in January.
Share buybacks, while subject to market conditions, are another lever we can pull to maximize long-term value for shareholders.
Annalisa Sainani: I'll now pass to Chadwick to offer his closing comments.
Chadwick Westlake: Good morning, everyone. Thanks, David. Thank you, Vin, for the warm welcome. Special thanks to my colleague, Marlene. I'm greatly looking forward to partnering with her as our Chief Risk Officer. It's such a privilege to start this week as the CEO of EQB Inc. This is Canada's Challenger Bank, and we are dedicated to helping build a better country, bringing real change to banking, and giving Canadians the tools to maximize their financial potential. This has been true throughout our more than 50-year history and has crystallized over the past two decades under the leadership of Andrew Moor. I am both honored and energized to lead this incredible company now for our significant growth ahead. I've been on the job for just a couple of days, but I do want to share a few comments. First, on people.
In summary, we move forward with strong capital levels that support our customers, our challengers, and the next phase of our growth agenda. And I'll now pass to Chadwick to offer his closing comments.
Good morning, everyone. Thanks, David. Thank you, Vin, for the warm welcome. A special thanks to my colleague Marlene; I'm greatly looking forward to partnering with her as our Chief Risk Officer.
It's such a privilege to start this week as the CEO of EQB.
This is Canada's challenger bank, and we are dedicated to helping build a better country by bringing real change to banking and giving Canadians the tools to maximize their financial potential.
This has been true throughout our more than 50 years of history and is crystallized over the past 2 decades under the leadership of Andrew Moor.
I am both honored and energized to lead this incredible company now for our significant growth ahead.
I've been on the job for just a couple of days, but I do want to share a few comments.
Chadwick Westlake: As announced yesterday, I'm very excited to welcome our new CFO, who is here with us. Annalisa is a remarkable talent in finance. Moving into this vital role, she brings her impressive experience, including her time at RBC as Chief Operating Officer for the CFO Group and VP Finance and Chief Accountant. Annalisa is a true challenger and was also recognized in 2020 as one of Canada's Top 40 Under 40 for her innovation, leadership, and community service. We look forward to how she will shape the evolution of our finance capabilities. David Wilkes has been appointed Chief Strategy and Growth Officer as part of my executive leadership team. This is a critical new role that will enable David to devote his considerable talents and experience to drive our substantial growth agenda. Thank you, David, for managing EQB Inc.'s finance function for the past six months.
First on people.
As announced yesterday, I'm very excited to welcome our new CFO, who is here with us. Annalisa is a remarkable talent in finance.
Moving into this vital role, she brings her impressive experience, including her time at RBC as Chief Operating Officer for the CFO group and VP Finance and Chief Accountant.
Motivation, leadership, and community service. We look forward to how she will shape the evolution of our finance capabilities.
David Wilks has been appointed Chief Strategy and Growth Officer as part of my executive leadership team.
This is a critical new role that will enable David to utilize his considerable talents and experience to drive our substantial growth agenda.
Chadwick Westlake: Also, a warm welcome to our new Head of Investor Relations, Lamar Prasad. Lamar joins us from Coremark Securities, where he served as an Institutional Equity Analyst, covering EQB Inc. among many other leading financial services companies. With his deep knowledge of our business and industry, he will be instrumental in building closer relationships with the investment community and our shareholders. With our deeply experienced team, I am confident in the resilience of Canada's Challenger Bank and how we will ignite and deliver the positive long-term change that hardworking Canadians deserve. I'll also offer a few brief comments on our strategic direction. I am completely focused on returning to growth. With our entrepreneurial nature and capability as a top Schedule I bank in Canada, the outcome of our capital allocation is expected and must be consistent, profitable growth, with ROE remaining a foundational North Star.
Thank you, David, for managing EKB Finance function for the past six months.
Also, a warm welcome to our new Head of Investor Relations, Lamar Pad.
Lamar joins us from CoreMark Securities, where he served as an institutional equity analyst covering EQB among many other leading financial services companies.
With his deep knowledge of our business and industry, he will be instrumental in building closer relationships with the investment community and our shareholders.
With our deeply experienced team, I am confident in the resilience of Canada's challenger bank and how we will ignite and deliver the positive long-term change that hardworking Canadians deserve.
I'll also offer a few brief comments on our strategic direction.
I am completely focused on returning to growth with our entrepreneurial nature and capability as a top schedule on banking in Canada. The outcome of our capital allocation is expected and must be.
Chadwick Westlake: I'll share more precision on our updated strategic objectives and growth outlook for fiscal 2026 as part of our Q4 call in December. I am also pleased to share that we will be announcing an Investor Day for fiscal 2026. We intend to host this at the top of our new EQ Tower downtown Toronto and hope to be hosting this by late spring or early summer. In the meantime, let me be clear about a few key priorities. At EQB, our focus is and will remain here in Canada, where there is still so much to do and so many opportunities to grow. We will not become distracted by other markets. I am deeply proud of our Canadian identity, and we will invest all our time and energy into this extraordinary country.
Consistent, profitable growth with ROE remaining a foundational Northstar.
I'll share more precision on our updated strategic objectives and growth outlook for fiscal 2026 as part of our Q4 call in December.
I am also pleased to share that we will be announcing an investor day for fiscal 2026.
We intend to host this at the top of our new EQ, our downtown Toronto, and hope to be hosting this by late spring or early summer.
In the meantime, let me be clear about a few key priorities.
Chadwick Westlake: What you can expect is more of what has consistently propelled EQB to material growth and leading long-term total shareholder returns, but a refined focus, including three key areas. One, our challenger at scale. We will continue to do what we do best. This includes being exceptional lenders to Canadian families and businesses, owned by our deeply valued brokers and partners, and our top position in the segments where we lend. We intend to pull further ahead in our winning position by investing to strengthen our competitive advantages. Two, challenger to its full growth potential. This will include executing on our diversification and expansion strategies and payments wealth in our digital platform, EQ Bank. Three, challenger to its greatest capabilities and purpose. We will invest in AI enablement to build with scale.
At QB, our focus is and will remain here in Canada, where there is still so much to do and so many opportunities to grow. We will not become distracted by other markets. I am deeply proud of our Canadian identity, and we will invest all our time and energy into this extraordinary country.
What you can expect is more of what has consistently propelled EQB to material growth and leading long-term total shareholder returns. But a refined focus, including three key areas.
1, our Challenger at scale.
We will continue to do what we do best. This includes being exceptional lenders to Canadian families and businesses. Home Buyers are deeply valued, as are Brokers and partners, along with our top position in the segments where we lend. We intend to pull further ahead in our winning position by investing to strengthen our competitive advantages.
2 Challenger to its full growth potential. This will include executing under diversification and expansion strategies and payments wealth. In our digital platform EQ Bank,
At 3:00 PM Challenger to its greatest capabilities and purpose.
Chadwick Westlake: We will continue to champion with our technology and fintech partners and our government and regulators on the importance of greater competition, open banking, and innovation. Importantly, I own this now. I believe a best-in-class efficiency ratio has been a competitive advantage, and I intend to be deliberate in our capital allocation with a sharp focus on returning efficiency towards our traditional, distinct high-performance levels. We will not fall into the trap of trying to be all things to all people, but we will focus on segments where we can win. I look forward to sharing more with our customers, partners, and shareholders soon. I am intently focused on staying true to what makes EQB a force in Canadian banking while unlocking new levels of growth, relevance, and impact for all of its stakeholders. With that, Joanna, can you please begin the Q&A portion of the call?
We will invest in AI enablement to build with scale.
We will continue to champion, with our technology and fintech partners and our government and regulators, the importance of greater competition, open banking, and innovation.
And importantly, I own this. Now,
And I believe a best-in-class efficiency ratio has been a competitive advantage, and I intend to be deliberate in our capital allocation with a sharp focus on returning efficiency towards our traditional distinct high-performance levels.
We will not fall into the trap of trying to be all things to all people, but we will focus on segments where we can win.
I look forward to sharing more with our customers, partners, and shareholders soon. I am intently focused on staying true to what makes EQB a force in Canadian banking, while unlocking new levels of growth, relevance, and impact for all the stakeholders.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. We ask that you please limit yourself to two questions to allow as many voices to be heard as possible. First question comes from John Aiken at Jefferies. Please go ahead.
With that, Joanna, can you please begin the Q&A portion of the call?
Thank you.
Ladies and gentlemen, we will now begin the question-and-answer session.
Should you have a question, please press the star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press the star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys.
We ask that you please limit yourself to two questions to allow as many voices to be heard as possible.
First question comes from John Aken at Jefferies. Please go ahead.
Various Analysts: Good morning, Marlene. In terms of the deterioration we saw in the personal lending portfolio, I was hoping we might dive into a little bit more. You mentioned that it was concentrated in Toronto suburbs, high-value mortgages. What is the outlook in terms of the evolution of this portfolio moving forward? Is this like a one-quarter incidence, or is this something we might actually see lingering on for a couple more quarters?
Good morning Marlene in terms of the deterioration. We saw on the personal lending portfolio. I was hoping we might dive into a little bit more. Um in terms of you know, you mentioned that it was concentrated in uh Toronto suburbs High uh, high value mortgages. Um, what you know, what is the Outlook in terms of the evolution of this this portfolio moving forward is this like a 1 quarter incidence or is this something we might actually see uh lingering on for a couple more quarters.
Marlene Lenarduzzi: I think there's a few things we have to think about in the mortgage portfolio. First off, when we look at our portfolio, we have a couple of things to think about. One is we look at the outlook for our housing prices. We look at the outlook for the macroeconomic environment. What we can tell you is that if I look at the increase in PCL for that residential portfolio, there's a really small number of mortgages who are driving 80% of that PCL. It is sort of very specific pockets and geographies where we saw price declines from their peak of about 25% to 30%. As well as there are some idiosyncratic issues where you may find when you repossess a house, you may find it needs a lot of work.
Mortgage portfolio. So first off, when we look at our portfolio, it, uh,
we have a couple things to think about 1 is we look at the outlook for our housing prices. We look at the in outlook for the macroeconomic environment. But what we can tell you is that if I look at the increase in PCL for the for uh that residential portfolio, there's a really small number of mortgages or driving 80% of that PCL and and it is sort of very specific pockets and geographies where we saw price declines from their Peak uh of about 30 to 25 to 30%.
Marlene Lenarduzzi: I would say that when we look at the outlook, it really depends on a lot of different factors. What I can tell you is we do see some improvement in early-stage delinquencies, and you know that gives us some optimism that that should result in lower PCLs down the road.
As well as there are some idiosyncratic uh, issues where you may find re when you repossess a house, you may find. It needs a lot of work. But I would say that, uh, when we look at the Outlook, really depends on a lot of different factors. But what I can tell you is, we do see some improvement in early stage of delinquencies and, you know, that gives us some optimism that, that that should result in lower pcl's down the road.
Various Analysts: Marlene, just as I'm looking at the gross impaired loans waterfall that you have on slide nine, correct me if I'm wrong, my understanding is that this was loans that were already impaired. Is that correct? If that is, is that the part of the $43 million delta in others?
And Marlene just um, as I'm looking at the gross impaired loans waterfall that you have on on slide 9. UM, my correct me if I'm wrong. My understanding is that this was, uh, loans that were already, uh, impaired. Is that correct? And then if that is, is that the, uh, part of the 43 million dollar deal in others,
Marlene Lenarduzzi: For the commercial portfolio, the increase in impaired loans is related to loans that had already been impaired that we've been managing.
For the commercial portfolio, the increasing and impaired loans are related to loans that had already been impaired, which we've been managing.
Various Analysts: Thank you. I'll recoup.
Thank you. I'll req
Operator: Thank you. The next question comes from Doug Young at Desjardins Capital Markets. Please go ahead.
Thank you. The next question comes from Doug Young at Deja Done Capital Market.
Various Analysts: Sorry. Good morning. I'm just trying to kind of get a sense of there seems to be a discrepancy in the impaired PCL trend for your single-family residential or residential than what we're seeing with the big banks. There's a few things I want to get into, but I get where you operate is different in the big city centers. Maybe it's the more Ontario exposure, exposed to more people that potentially could be impacted from unemployment and tariffs. Is there anything else that really differentiates the book? I'll tell you where I'm going with this, because when I look at your single-family residential, your Stage III loans, the coverage ratio is 4%. When you impair it, you're holding allowances of 4% of the impairment. It seems like you're having challenges with recoverables on the mortgages. When I look at one of the big six banks, I'll pick CIBC.
Yeah, sorry, just, uh, good morning. Um, I'm just trying to kind of get a sense of there. Seems to be a discrepancy in the impaired PCL trends for your single-family residential or resident. What we're seeing with the big banks and...
Is it a few things I want to get into? But and I get, I get where you operate as different, you know, in the big city centers. Um, maybe it's more on Ontario exposure exposed to more people that, you know, potentially could be impacted from an employment and tariffs
But is there anything else that you kind of really differentiate the book? And I'll tell you where I'm going with this because when I look at your single-family residential, your Stage 3 loans, you know, the coverage ratio is 4%. And so when you pair it, you put a holding allowance of 4% of the impairment.
Various Analysts: The coverage ratio on residential for Stage III residential is 22% coverage. I'm trying to get a sense of why there would be such a big difference. I'm hoping you can help me a little bit thinking through that.
And it seems like you're having challenges with recoverables on the mortgages. But when I look at one of the Big 6, male Pixie IBC, the coverage ratio on resale for Stage 3 resale is 22% cover. It's like I'm trying to get a sense of why there would be such a big difference, and hoping you can help me a little bit in thinking through that.
Marlene Lenarduzzi: I can't obviously speak to CIBC's coverage approach, but I would say for us, when we look at our portfolio, we have a great deal of conviction in our process to approach each loan individually and assess them on an individual basis. The provisions are set by our workout teams based on the characteristics of each individual loan that's impaired.
I can't obviously speak to CIBC's coverage approach, but I would say for us, when we look at our portfolio, we have a great deal of conviction in our process to approach each loan individually and assess them on an individual basis. The provisions are set by our workout teams based on the characteristics of each individual loan that is impaired.
Various Analysts: Okay. It just seems like it's a big discrepancy, but maybe I can follow up and talk a little bit more through that. I guess maybe towards what John is kind of indicating, like I guess the sense and question I'm getting there, are we done with this erosion in single-family residential? Obviously, no one's got a crystal ball as where we sit today. It feels like early-stage delinquencies are kind of settling back a little bit. Are you feeling more comfortable that you're kind of closer to the peak of this kind of erosion? Obviously, depending upon many things, it feels like you are, but I don't want to put words in your mouth. I'm just hoping to get a little bit of color on that.
It just seems like it's a big discrepancy, but maybe I can follow up and talk a little bit more through that.
Um and I guess maybe towards what John is kind of indicating and like I guess the sense in question I'm getting is are we done with this erosion and single family residential? And I think it's obviously no 1's got a crystal ball is where we sit today. It feels like you know early stage delinquencies is kind of settling back a little bit. Um, are you feeling more comfortable that you're kind of closer to the peak of this kind of erosion? Uh, obviously depending upon many things but it it feels like you are but I don't want to put words in your mouth.
I just hope to get a little bit of yellow on that.
Marlene Lenarduzzi: As you know, we're in a period of unprecedented uncertainty, which makes forecasting and timing of recovery difficult. We have increased our Stage I and II provisions by $10 million, and this is really to account for further deterioration that may come in the macroeconomic outlook. It's also observed by Moody's in their forecast as well. On the cautiously optimistic side, as I point to those early-stage delinquencies coming down, it is a bit of a bright light. However, we really want to see more stable macroeconomic conditions before we can really get confident that we will see around the timing of when the recovery will happen.
Well, you know, as you know, we're in a period of unprecedented uncertainty, which makes forecasting and timing of recovery difficult. Um, we have increased our Stage 1 and 2 provisions by $10 million, and this is really to account for further deterioration that may come in the macroeconomic outlook. And it's also observed by Moody's in their forecasts as well.
Icy conditions, uh, before we can really get confident that we will see, you know, around the timing of when the recovery will happen.
Various Analysts: Okay, I'll leave it there. Thanks.
Okay, I'll leave it there. Thanks.
Operator: Thank you. The next question comes from Paul Holden at CIBC. Go ahead.
Thank you. The next question comes from Paul Holden at CIBC. Let's go ahead.
Paul Holden: Thank you. Good morning. Thanks for giving the ROE expectation for the full year. I ran some quick math on that, and it implies that Q4 earnings will be roughly similar to Q3. Is that math in the right ballpark?
Thank you. Good morning. Um, thanks for giving the ROE expectation for the full year. I ran some quick math on that, and it implies that Q4 earnings will be roughly similar to Q3. Is that math in the right ballpark?
Various Analysts: Thanks, Paul. I think, David, you want to take that?
Annalisa Sainani: Yeah, thanks, Paul. When you think about the major drivers across revenue and expenses, we expect similar performance in Q4 where there can be some uncertainty. Obviously, as the last conversation we're having with Marlene is just on the provision expectation. That'll be the driver of any of the range and outcomes really in the next quarter.
Paul Holden: Got it. Okay. Second question, obviously, it was an 11.5% ROE expectation for this year, well below prior objective. I guess really two questions, but getting at the same point. Should we expect any change in the ROE objective of 15% to 17% for EQB? It's been longstanding, and I would assume it probably shouldn't need to change. More importantly, kind of maybe quickly, and I think it's a question for Chadwick, is like what's the path to getting back there? Again, without taking too much away from the Investor Day, but just, you know, high level, like what do you think are the key ingredients in getting back to the old ROE objective?
Thanks, Paul. Yeah, I think, uh, David, you want to take that? Yeah, thanks, Paul. Yeah, um, when you think about the major drivers across revenue and expenses, we expect similar performance in Q3 and Q4. Where there can be some uncertainty, obviously, is the last conversation we're having with Marlene; it’s just on the provision expectations. So, um, that'll be the driver of any of the range and outcomes really in the next quarter.
Got it. Um, okay. And then, second question, um, obviously it was 115. Are we expecting for this year well below prior objective? So,
I guess really 2 questions but but but getting on the same point, should we expect any change in the? Are we objective of 15 to 715% for eqb? It's being long-standing and I would assume it probably shouldn't need to change and more importantly kind of maybe quickly and I think it's a question for Chadwick is like what's the path to getting back there again without taking too much away from the investor day? But just you know high level like what what do you think are the key the key ingredients. Um and getting back to the uh the old. Are we objective?
Chadwick Westlake: Yeah, thanks, Paul. I'll share more on 2026, specifically in December. You're right, in an Investor Day, we'll share more about our three to five-year vision. Early days in strategic focus. I would say the ROE that has traditionally been an advantage in North Star will continue to be an advantage in North Star for us in how we're allocating our capital. We're first going to continue to allocate our capital, importantly, into our growth businesses. We're going to focus on returning our efficiency to our traditional best-in-class levels, which are a couple of the big components. I do think we have, at this moment, as we shared, conviction in the medium-term targets that we had. We will come back to that more in December.
Chadwick Westlake: It is, to my point, to be clear, that traditional efficiency levels need to be delivered and reigniting the growth in our core businesses where we'll win.
Paul Holden: Okay, got it. Thank you.
Yeah, thanks Paul. Uh, I'll share more on 2026 specifically in December and you're right in in investor day. We'll share more about our our 3 to 5 year Vision early days in strategic Focus. Uh, but I would say the Roe that is traditionally been an advantage in. Northstar, we'll continue to be uh, an advantage in Northstar force and how we're allocating our Capital. Uh, and we're first going to continue to allocate our Capital importantly into our growth businesses. We're going to focus focus on returning, our efficiency, to our traditional best-in-class levels, uh, or a couple of the big components. Um, but I do think we have at this moment as we shared conviction in the medium-term targets that we had, uh, but we will come back to that more in December, uh, but it is like to my to my point to be to be clear. Uh traditional efficiency levels need to be delivered. Uh, and reigniting the growth in our core businesses where we'll win
Okay, got it. Thank you.
Operator: Thank you. The next question comes from Gabriel Dechaine at National Bank. Please go ahead.
Thank you. The next question comes.
Paul Holden: Good morning. First question, I'm going to go back to this uninsured mortgage where we're seeing the residential mortgage, that is, the increase in provisions for a couple of quarters now. From the sounds of it, we could be, there could be more quarters like this ahead, hopefully getting better as the early-stage delinquency has improved, as rates are cut. Nonetheless, we could see a bit more. I was just wondering about if you can identify certain geographic exposures and certain vintages or something like that, why could you not justify booking perhaps a large performing provision? Because maybe I don't know if it's solely contingent on borrower risk, but asset risk is also different.
Uh, good morning. Uh
First question, I'm going to go back to this, uh, uninsured mortgage where we're seeing the, um, uh, Residential Mortgage. That is, uh, the increase in provisions for, you know, a couple of quarters now, uh, from the sounds of it. We could be, you know, there could be more quarters, uh, like this ahead, but, uh, hopefully, getting better. Is the delinquency, early stage delinquency, is improved, is rates are cut, but, you know, nonetheless, we could see a bit more. I was just wondering about, you know, if you can identify, you know, certain, you know, geographic exposures and certain loan vintages, or something like that, why, you know, could you not justify, you know, booking perhaps a large performing provision because, you know, the, uh, maybe, I don't know if it's solely contingent on borrower risk, but asset risk is also different.
Marlene Lenarduzzi: Yeah, thanks for your question. I would say a few things there. One is, you know, we do have, there is a great deal of uncertainty, as I've said, right? Unemployment rate and interest rates are elevated on a relative basis. Housing sales are starting to show signs of weaknesses, which has contributed in the past to increased mortgage delinquency rate, particularly in the GTA region. We may see that continue. I would say that from a geography perspective, there were pockets of geography, and I'd say Toronto suburbs, for example, there were some pockets where we did see prices drop, you know, that 25% to 30%. We are well aware of those pockets and are monitoring them, and we do have appropriate levels of provisions to account for that.
Yeah, thanks for your question. Um, I would say if you think their 1 is.
You know, we do have there is a great deal of uncertainty as I've said. Right. Unemployment rate in interest rates are elevated on elevated on a relative basis. Housing, sales are starting to show signs of weaknesses, um, which you know, has contributed in the past through increased mortgage and Linux rate, particularly in the GTA region. And, um, and we may see that continue. I would say that from a geography perspective, there were pockets of geography and its Toronto. Suburbs. For example, there were some Pockets where we did see prices drop, you know, that 25 to 30%. We are well aware of those pockets in our monitoring them and we do have appropriate levels of Provisions to account for that.
Paul Holden: Okay, so no, like an outsized, heavier weighting to really downside scenario that's not in the cards?
Okay, so
No, then like, uh, an outsized, uh, heavier weighting to a really downside scenario, that's not in the cards.
Marlene Lenarduzzi: The downside scenarios are built into what we get from Moody's Analytics. You can see that their scenario outlook versus last quarter is much more severe. Plus, we do have specific overlays within our provision process on performing loans for those higher risk segments.
Paul Holden: Okay. On the revenue side, I guess some of the deposit cost trends were working against you, but you have adjusted your pricing, I believe, on the high-interest savings account. That should help. Looking forward, if we get some rate cuts whenever that happens later this year, would you be thinking about moving more in lockstep with whatever the Bank of Canada does as opposed to lagging it for competitive reasons?
Are built into what we get from Moody's, Analytics. You can see that there's scenario Outlook uh, versus last quarter is much more severe. Plus we do have specific, oh overlays uh, within our provisioning process on performing loans for those higher risk segments, okay? Uh, then on the, uh, moving on, the the revenue side I guess the, um, you know, some of the, the, the deposit, uh, uh, cost Trends were working against you but you have, uh, adjusted your pricing. I believe, on the high interest savings account. Uh, um,
That should help, uh, looking for though if we get some, uh, rate cuts. Uh, whenever that happens later this year, would you be thinking about moving more in lockstep with, uh, whatever the Bank of Canada does as opposed to, you know, lagging it for competitive reasons.
Annalisa Sainani: Thanks, Gabe. I think it's more likely we would do that. We actively manage this on an ongoing basis. As you'll have seen yesterday, I think we lowered rates on some of our products by 20 bps. When you think about rates declining, the other factor you want to consider is the benefit we're going to receive from the commercial floors that are already in the money. Those are sort of tagged effects. We have $3 billion in commercial loans that will contribute more to NII if Bank of Canada moves. I think of that as the bigger move. On the deposit side, yes, there's a good chance we would move more in lockstep.
Thanks, Gabe. I think it's more likely we would do that. We will We actively manage this on an ongoing basis. Like, as you'll, you'll have seen yesterday, I think we, we lower bit, um, rates on some of our products, by 20 basis points. I think, when you think about rates declining the other Factor you want to consider is, uh, the benefit. We're going to receive from the commercial floors that are already in the money. So those those are sort of tagged effects. Uh, we have 3 billion dollars in commercial loans,
Paul Holden: Okay, great. I'll just throw in another one. You've changed your full-year guidance. I get that. We can work out the math of what that means for Q4 earnings per share. The range is the toggle or the swing factor, really the provision number, because revenues may be modestly better if the margin picks up and expenses do what they do. Really, the main swing factor is going to be PCL.
That'll contribute more to knee if the Bank of Canada moves. Um, so I think of that as the bigger move, but on the deposit side? Yes, there's a good chance we would move more in lockstep.
Okay, great. And then I'll, I'll just throw another 1. You did you changed uh, your your full year guidance. I get that. Um, and we can, you know, work out the math of what that means for Q4 earnings per share. There's a range uh is the you know, the toggle or the swing Factor really the provision number. Uh cuz you know, we'll be revenue is maybe modestly better if the margin picks up and then uh, expenses do what they do. But really the main swing factor is going to be uh uh PCL.
Annalisa Sainani: That's what I mentioned earlier. I think PCL would be the bigger uncertainty tied to Q4.
Yeah, yeah, yeah. Uh, but that's what I...
Paul Holden: Got it. I was probably typing at the time. All right. Enjoy the rest of your summer and welcome back, Chadwick.
Yeah, I mentioned earlier. I think PCL would be the bigger uncertainty tied to Q4.
Got it. I was probably typing at the time.
All right.
Enjoy the rest of your summer and welcome back, Chadwick.
Chadwick Westlake: Thank you, Gabe. Really appreciate it.
Thank you, Gabe. I really appreciate it.
Operator: Thank you. The next question comes from Etienne Ricard at BMO Capital Markets. Please go ahead.
Thank you. The next question comes from Ricardo Markets. Please go ahead.
Various Analysts: Thank you, and good morning. I want to follow up on one of the earlier questions on credit quality and the divergence we're seeing for the impaired loans relative to some of the other banks, especially for single-family mortgages. I understand your target markets tend to be a bit different with exposure to the self-employed as well as the new Canadians. Do you think these demographics are experiencing a tougher macro backdrop? If so, why is that the case?
Thank you, and good morning. I want to follow up on one of the earlier questions on credit quality and the divergence we're seeing for the impaired loans relative to some of the other banks, especially.
Uh, for single-family mortgages. So, I understand your target markets tend to be.
Uh, a bit different with, um, exposure to the self-employed.
As well as the, uh, the new Canadians.
Do you think these demographics?
Are you experiencing a tougher macro backdrop? And if so, why is that the case?
Marlene Lenarduzzi: Thanks for your question. When I think about this segment of our population, it's true, 70% of our customers are self-employed and new Canadians are an important part of our customer base. That segment seems to be, when we look at how these segments perform historically, very resilient. This is a very resilient segment. These are people who are resourceful, and particularly small business owners are able to really hustle to find ways to keep up with their payments. We have a well-diversified portfolio when we think about the range of products that we offer. As well, when I think about this portfolio and the strength of our loan to values, that gives us comfort as we move forward. We've also stress-tested our portfolio, and I would suggest that through that stress testing, it gives us confidence in our ability to manage this through cycle.
Thanks for your question. When I think about this segment of our population, it's true that 70% of our customers are self-employed, and new Canadians are an important part of our customer base.
That uh, that segment seems to be when we look at how these segments perform historically, these are a very resilient, this is a very resilient segment. These are people who are resourceful and uh, particularly small business owners are able to, you know, really hustle to find, uh, ways to keep up with their payments. Um, we have
A, a well Diversified portfolio when we think about, uh, the range of of products that we offer. And, um, and as well, when I think about this portfolio and the, the strength of our loan to values, uh, that gives us comfort as we move forward. We've also stress tested our portfolio and, uh, I would suggest that, you know, through that stress testing, it gives us confidence in our ability to manage this through cycle.
Various Analysts: I guess what you're saying is the relative divergence in the impaired loans is more of a geographic allocation.
So, so, so I guess what you’re saying is, um, the relative divergence in the impaired loans is more of a geographic allocation.
Marlene Lenarduzzi: It could be if we have probably a higher concentration in Ontario than some of the peers.
Yeah, it could be. It could be if we have probably a higher concentration in Ontario than some of the peers.
Various Analysts: Okay. Chadwick, I've heard the word efficiency multiple times in your comments. What is the path looking like to get back closer to the historical levels? Is a potential efficiency improvement going to be driven by growing revenues or maybe also relooking at the expense base?
Okay.
And, uh, Chadwick, uh, I've heard the word "efficiency" uh, multiple times in your comments. Um,
Um, is a potential efficiency improvement going to be driven by growing revenues or maybe, uh, also relooking at the expense base?
Chadwick Westlake: Thanks. Thanks, Etienne. I believe a competitive advantage always has been and will be a best-in-class efficiency ratio for Canada's Challenger Bank and our digital platform and the markets where we win. As I said, I'll own this now. We intend to return to that level of performance through both, as you indicated, revenue work and reigniting that revenue work through the three strategic categories that I called out in terms of challenger at scale, challenger to its full growth potential. There are several options on the table, I think, for revenue and the cost side. There will be a combination, I think, as we get there over coming quarters. I'll share more about that in December and at the Investor Day. That is an important North Star under and really secondary and foundational to ROE.
Thanks, thanks. Well, yeah, I believe a competitive advantage always has been and will be, uh, best-in-class efficiency ratio for Canada's Challenger bank and our digital platform in the markets where we win. Uh, so as I said, I'll own this now. Uh, and we intend to return to that level of performance through both, as you indicated, revenue work and reigniting that revenue work through the three strategies that I called out. In terms of Challenger at scale, Challenger to its full growth potential. And, um, there are several options on the table, I think four revenue and the cost side. Uh, so there will be a combination. I think, as we get there, um, over the coming quarters, and I'll share more about that in December and at the Investor Day. But that is an important North Star. Um,
under, you know, and really secondary and foundational to Roe.
Various Analysts: Thank you very much.
Thank you very much.
Operator: Thank you. The next question comes from Graham Ryding at TD Securities. Please go ahead.
Thank you. The next question.
Comes from Graham writing at.
Securities. Please go ahead.
Various Analysts: Maybe I could just jump into that sort of 2022 cohort where on the single-family residential side, where it seems like prices are elevated and it's driving some losses. Can you quantify what the particular size of the book, either in or out of the GTA or that 2022 cohort, what that represents as a % of your single-family residential book? That would be my first question. The follow-on would just be, is it fair to say that the price declines that we've seen from the 2023 and 2024 cohorts are less pronounced and you feel less exposed from a potential credit loss perspective from those vintages?
Maybe I could just, um, jump into that sort of 2022 cohort where, uh, on the single family residential side, where it seems like prices are elevated. It's driving some, some losses can you. Can you quantify what? The, you know, the, the particular size of the book either in around the GTA or that 2022 cohort. What that represents as a percentage of your single family residential book,
That would be my first question. And the following would just be: is it fair to say that, you know, the price declines that we've seen from the 2023 and 2024 cohorts are less pronounced, and you feel less exposed from a potential credit loss perspective? From those vantages.
Marlene Lenarduzzi: Yeah, thanks. We don't disclose specifically the size of that 2020 or any kind of subsegment or vintage in our portfolio. What I can tell you is that when we look at our approach to lending, I do feel more that there's less movement in those more recent vintages. When I look at the 2022 vintage, on average, it's still supported by a relatively strong loan to values on an HPI-adjusted loan to value basis. That gives us confidence in what could come out of that moving forward.
Uh, there are any kind of sub segments or vintage in our portfolio but what I can tell you is that we look at our approach to lending. I do feel more that the that there's less uh movement and those more recent vintages as well. And I look at the 2022 vintage on average, it's still supported by a relatively strong loan to values on an H2 HPI, adjusted loan to value basis. So that gives us confidence in. You know, what could come out of that moving forward
Various Analysts: Okay. Just on the capital and the buyback side, given the macro backdrop and the lower loan growth that you're seeing currently, and your consideration to share price, is it fair to say that your appetite for buybacks is reasonable currently?
Okay. Um, and then, uh, just on the capital on the buyback side, um, just giving the macro backdrop and the lower loan growth that you're seeing currently. Um, and then your consideration to share price; is it fair to say that your appetite for buybacks...
Um is um reasonable.
Uh, currently.
Chadwick Westlake: Thanks, Graham. I'll reinforce our capital allocation strategy. First, we obviously have a great capital position, intended to maintain one. We'll continue to invest first in the business. We have a consistent dividend strategy. We'll always be looking at inorganic opportunities. In general, our belief is we trade well below our intrinsic value, and we'll continue to allocate capital according to that filter. There is an NCAB for a reason, but the capital allocation filter really goes in that sequence.
Thanks, thanks Graeme. Uh, I'll reinforce our Capital allocation strategy. So first, we're we we have obviously have a great Capital position intended to maintain 1. We'll continue to invest for in the business. We have a the consistent dividend strategy. Uh, we'll always be looking at inorganic opportunities, uh, but in general, I believe is we trade well below our intrinsic value, uh, and, um, and we'll continue to allocate Capital according to that filter. So, there is an ncib for a reason. Uh, but the capital allocation filter really goes in that sequence.
Various Analysts: Understood. Thank you.
Understood, thank you.
Operator: Thank you. The next question comes from Mike Rozbenovic at Scotiabank. Please go ahead.
Thank you. The next question comes from Mike with Scotia Bank. Please go ahead.
Various Analysts: Hey, good morning. A couple of questions, hopefully quick ones, but I wanted to start with the gain on sale and income from retained interest line. Obviously, this has been a very, very important driver of your revenue diversification. It's been growing very, very strongly. Can you talk a little bit about the components here? There's the volume side where I do believe that you would look to use your full allocation with this TV program. In fact, when you book gains, I'm guessing the duration matters too. With a flat yield curve, I would imagine your borrowers would prefer the 10-year over the 5-year. Now you've got some steepness in the yield curve. Is there a dynamic where this line has downside risk? I'm not trying to pin you on any sort of guidance, but $26.5 million is a record number.
Various Analysts: I'm just trying to better understand if this is a line that could legitimately go beyond $26.5 million as a run rate, or is it something that could actually gravitate down to the $20 million range? If you had to sort of look at high level, where do you see this trending over the course of the, say, six to eight quarters? Thanks, Mike. Good to hear from you. David, do you want to take that question?
Hey, good morning, a couple questions, hopefully quick ones but I wanted to start with the gain on sale and income from retained interest line. Obviously, this has been a very, very important driver of your Revenue diversification. It's been growing very, very strongly C. Can you talk a little bit about the components here? Um, so there's the volume side where I, I do believe that you would look to use your full allocation, uh, with the TV program and effect. Like like, when you book gains, I'm guessing the duration matters, too. And with a flat yield curve. I would imagine your your borrowers would prefer the 10 year over the 5 year. Now, you got some steepness in the yield curve. Uh, is there a dynamic where this line has downside risk? And I'm not trying to ping you on any sort of guidance, but 26 and a half million is a record number. I'm just trying to better understand if this is a line that could legitimately go beyond 26 and a half million as a run rate, or is it something that could actually gravitate down to the 20 million range? So if you had to sort of look at high level, where
Where do you see this trending over the course of, say, 6 to 8 quarters?
Paul Holden: Yeah, thanks, Mike. You pointed out there are two drivers in that gain on sale and return. Interest.
David Wilkes: The retained interest portion is tied to the portfolio that's already here, and that'll continue. It accounts for probably more than half of that line. As you said, the gains on the actual securitization activity depend on the origination volume and our ability to find funding for both directly, as you said, into the CMB programs or other alternatives. We see this quarter, similar to this quarter last year, as a strong performance in that line. We see the retained interest continue to grow as the loan under management grow in that piece. As you said, the gains on securitization a little bit depend on customer appetite across the five-year and ten-year, but continued activity in that market last quarter, and we're seeing that trend continue in the next quarter.
Yeah you pointed out there, there are 2 drivers in a gain on sale and retained interest line. The retained interest portion is tied to the portfolio, that's already here. Uh and so that'll that'll continue it accounts for probably more than half of that line. And then, as you said the, the the gains on the actual securitization activity depend on the origination volume and our ability to, uh, find funding for both directly, as you said into the CMD programs or other Alternatives. Uh, so we, we see this quarter similar to this quarter last, uh, year as a strong performance and that line, uh, we see the retained interests continue to grow as the loan under management grow in that piece.
Lamar Prasad: Do you think this is sustainable? In terms of the upside, is there upside or, notwithstanding a change in the CMB support level, the $60 billion that the government currently allocates, would that have to move for this line item to have upside beyond this type of really strong level that you're reporting currently?
And then, as you said the, the gains on securitization a little bit, depends on customer appetite, across the 5 year and 10 year. Uh, but continued activity in that market last quarter. And we we're seeing that Trend continued in the next quarter. So so so do you, do you think this is sustainable and and in terms of The Upside, is there upside or notwithstanding a change in the CMB support level, the 60 billion of the government currently, allocates would that have to move for this line item to have upside Beyond this? This type of, you know, really strong level that that you're reporting currently.
David Wilkes: Yeah, the $60 billion program is definitely a major contributor. It's not our only source of funding for these types of assets. We expect continued strong performance, and likely at those levels with small growth.
Yeah, the $60 billion program is definitely a major contributor; it's not our only source of funding for these types of assets. Uh, but...
Lamar Prasad: Okay, got it. I also wanted to follow up on the expense side. Obviously, the revenue environment seems to be a bit challenged right now, not just for EQB, but for a lot of lenders. In particular, the residential mortgage side really hasn't come back. We really haven't had much of a rebound this spring lending market if you look at dollar volume on the origination side. What I'm wondering is, and maybe this is for Chadwick, as you think about getting back to a growth profile and getting your efficiency ratio back to something that looks better versus the 53% you reported this quarter, how do you sort of think about an environment where maybe the revenue is just not as robust as what might have been expected a few quarters ago?
Just, I expect him to... We expect continued strong performance likely at these levels, with small growth.
Lamar Prasad: Is that a hindrance to getting the efficiency ratio down to where you ideally want it to be? I guess as a follow-up, would EQB ever consider somewhat of a bigger sort of sizable restructuring charge?
Okay, got it, got it. And then, I also wanted to follow up on the expense side, um, obviously, uh, uh, the revenue environment seems to be a bit challenging right now, not just free QB, but, but for a lot of lenders in particular, the Residential Mortgage side really hasn't come back. We really haven't had much of a rebound. You know, this spring lending Market, if you look at Dollar volume on the origination side. So what I'm wondering is is and maybe this is for chai week as you think about, you know, getting back to a growth profile. Um, and getting your efficiency ratio back to something that that looks better, uh, versus the 53, reported this quarter. How how do you sort of think about, you know, an environment where maybe the revenue is just not as robust as as What Might Have Been expected a few quarters ago? I is that, is that a hindrance to getting the efficiency ratio down to where you ideally want it to be? And then I guess as a follow-up would, would eqb ever consider some
Somewhat of a bigger, sort of sizable restructuring charge.
Chadwick Westlake: Thanks, Mike. Two things. I'll share more about our outlook for next year in December, and this will become part of our Investor Day in terms of how we intend to operate our traditional best-in-class levels for efficiency. I agree the revenue headwinds play into the mix, but I'll have a heightened focus as well on how we allocate every dollar, all of our capital, to ensure we're allocating it into our highest sources of growth as I've outlined. That will include for sure a review of how we spend and spend wisely. I've just been back for a couple of days. I need to take some time to go through that with the team, but there will be a heightened focus on that, always knowing first priority is revenue growth. We're going to land back at that efficiency range.
Thanks Mike.
2, things, I'll share more about our outlook for next year, in December. And this will become part of our investor day in terms of how we intend to operate our traditional best-in-class levels for efficiency. I, I agree the heavy winds Revenue, headwinds play into the mix. Uh, but I will have a high and focus as well on how we allocate. Every dollar all of our Capital to ensure we're allocating it into our higher sources of growth as of outlined. Uh, so that will include. Um, for sure, a review of how we spend and spend widely, uh, you know, I've just been back for a couple days. I need to take some time to go through that with the team, but there will be a heightened focus on that. Always knowing first priority is revenue growth. But either way, we're going to land back at that efficiency range.
Lamar Prasad: Okay, so this is more of a longer-term view, but you're not contemplating anything in terms of a more sizable restructuring type scenario? Like, we do see that with some of the larger banks. I'm guessing that's probably not in your DNA. Is that fair?
Okay, so this is one of the longer-term views, but you're not contemplating anything in terms of a more sizable restructuring-type scenario. Like, we do see that with some of the larger banks. I'm guessing that's probably not in your DNA. Is that fair?
Chadwick Westlake: I'd say I just started as the CEO. It is a new era. We have our traditional strengths that I expect to continue, but all options are on the table as we look to deliver our strategic agenda, Mike. We'll be looking at how do we accelerate revenue and how do we ensure we have economies of scale and are spending wisely. That might include reallocation of resources and dollars, and that might include also slowing that level of expense increase. I do think there's work to do on both sides, and I'm very focused on that together with the leadership team.
I'd say I just started as a CEO. It is a new era. We will we have our traditional strengths that I expect to continue but I uh all options are on the table as we look to deliver our strategic agenda Mike. So we'll be looking at how do we accelerate revenue and how do we ensure we have economies of scale and our spending wisely that might include reallocation of resources and dollars and that might include also uh slowing the that that level of
Of expense increase, I do. I do think there's work to do on both sides, and I'm very focused on that together with the leadership team.
Lamar Prasad: Got it. Okay, thank you. Thanks for the insights.
Chadwick Westlake: Thank you, Mike.
Got it. Okay. Uh, thank you. Uh, thanks for the insights.
Thank you, Mike.
Joanna: Thank you. The next question comes from Stephen Boland at Raymond James. Please go ahead.
Thank you. The next question comes from Stephen Bolan at Raymond James. Please go ahead.
Stephen Boland: Thanks. A lot has been covered, but I want to go to that slide on your NIM. You kind of said Q4 would probably be in terms of profit similar to Q3. You only need like a 1.95% NIM in Q4 to get to that 2% average. I'm going to base that. I'm curious about the reasons for the NIM decline. I understand increase in liquidity portfolio, but when you mentioned that the attrition of higher margin loans where you had the floors have rolled off and the deposits, certain deposits that are coming in are obviously more expensive, it's one quarter. I'm really struggling why, even if Q2 was kind of a one-time, there were some one-time items in there that you're not above 2% in the quarter.
Stephen Boland: How does one quarter of movement in the portfolio and maturities and repricing of loans impact you that much, I guess, is the question.
Liquidity portfolio but when you when you mentioned that the attrition of higher margin loans, where you had the floors have rolled off and the deposits, um certain deposits that are coming in are are obviously more expensive but it's it's 1 quarter. So I I'm I'm really struggling why, you know, even if 22 was, you know, kind of a 1 time, there were some 1 time items in there that you're not above 2, in, in the quarter. How does it like 1 quarter of movement in the portfolio and, and maturities and repricing of loans? You know, impact you that much I guess is the question.
Chadwick Westlake: Got it. Thanks, Stephen. David, do you want to resume the NIM?
All right, thanks. Stephen David. Do you want to present the sum of the...
David Wilkes: Yeah, thanks for the question. As we think of Q4 and the underlying trends that I mentioned, both on the commercial mortgages and on EQ Bank deposits, we do have the lever on the EQ Bank deposit side. You mentioned more expensive deposits, but these deposits are a better cost of funds. We do have that lever there. We wouldn't expect the liquidity portfolio to be higher quarter over quarter as our funding programs will show slightly less activity potentially between the two quarters. The one place that you mentioned is the commercial loan maturities. We will have some more maturities on the uninsured portfolio. Some of them will have floors. One of the countervailing effects there will be the benefit of the floor potentially expanding with Bank of Canada moves.
Yeah, it's a thanks for the question. Um,
Like, as we think of Q4,
Uh, and the underlying trends that I mentioned both on the commercial mortgages and on EQ Bank deposits, like we do have the lever on the EQ Bank deposit side.
Um, you mentioned more expensive deposits. But these deposits are a better, uh, a better cost of funds. So we do have that lever there. We wouldn't expect the liquidity portfolio to be higher quarter over quarter, as our funding programs will show our slightly less activity potentially between the two quarters.
And then that the one place of them will have floors and one of the countervailing effects. There will be the benefit of the floor potentially expanding with Bank of Canada moves.
Stephen Boland: Okay. Marlene, I don't want to hammer this to death, but we've seen some stabilization in single family. I understand you're talking about vintages that were 2020, you know, three-year mortgages or five-year mortgages, like underwritten in 2020 or 2022. You traditionally always, your LTVs have always been around the 70% mark. I don't think I've seen anything that shows 30% decline in housings, even in Toronto. I'm just curious, are these houses really beat up, like that you've gone, you've eaten into that LTV? I don't think I've ever seen that with EQB before that that was a concern.
Okay. And, and
You know, we've seen some stabilization in single family and and and granted. I understand you're talking about vintages that were 20, you know, 3 year mortgages or 5 year mortgages like underwritten you know in 2020 or 2022. Um but like you traditionally always your ltbs. Have always been around the 70% Mark. So
You know, I don't think I I've seen anything that, that shows 30% decline in in housings, so, you know, even in Toronto, so I'm I'm I'm just curious. Like, I mean, are these houses really beat up like that, like that, that you've gone, you've eaten into that LTV. Um, I don't think I've ever seen that with aqua before that, that was a concern.
Vincenza Serra: Yeah, there have been pockets, very specific pockets. As I said, it's about 50 loans. It's a small portion of loans, about 50 loans that are generating 80% of the decline. It is very targeted pockets where these are larger loans. There are larger loans that did see price declines in some areas of 25% to 30% since their peak in 2022. For that 2022 vintage, just as a reminder, our mortgage terms tend to be very short. That vintage would have renewed, most of it's renewed two times already. The first time they would have renewed would have been at the higher interest rate, and then they've since re-renewed at lower interest rates. That is also helping to provide some relief in terms of their carrying costs and gives us more confidence moving forward as a part of that green shoe.
Yeah, there have been Pockets very specific pockets. As I said, it's about 50 loans. It's it's a small portion of loans about 50 loans that are generating 80% of the decline. So it's very targeted Pockets where these are larger loans, um and uh they're larger loans that did see, price declines, in some areas of of 25 to 30% since their peak in 2022.
Vincenza Serra: However, we are still seeing some uncertainty in the market.
And you know for that 22 and 2 vintage just as a reminder, our mortgage uh terms tend to be very short. So those that vintage would have renewed most of its renewed 2 times already. So the first time they would have renewed would have been at the higher interest rate and then they've since re renewed at lower interest rates. So again, that's also helping to provide some relief in terms of their carrying costs and gives us more more confidence. Moving forward as a, you know, part of that green shoe. But however, you know, we are still seeing some uncertainty in the market.
Stephen Boland: Okay, so these mortgages have already been renewed. I thought it was a three-year or five-year duration, but you.
Vincenza Serra: No, ours are largely like two years, one to two years typically.
Okay, so these mortgages have already been renewed. I thought it was a 3 year or 5 year duration but you you know, ours are largely like 2 years 1 to 2 years and
That's typically.
Stephen Boland: Okay, thanks very much.
Vincenza Serra: You're welcome.
Okay, thanks very much.
Chadwick Westlake: Thanks, Stephen.
You're welcome. Thanks Stephen.
Joanna: Thank you. The next question comes from Darko Mihelic at RBC Capital Markets. Please go ahead.
Thank you. The next question comes from Darko Mahalik at RBC Capital Markets. Please go ahead.
Lamar Prasad: Hi, thank you. Covered a lot of ground. I'll be very quick. I also wanted to ask about the margin. I get the Q4 view, so I'm happy with that. I guess where I'm going or what I'm thinking about is longer term into 2026. One of the things that I'm seeing with the larger banks is a bit of a shift, right, in the deposit mix. We're actually getting term declining, demand savings balances rising, and that's been very beneficial for larger banks. I don't get the sense that that can happen here. I see actually that your term deposits, which are brokered, are growing and probably necessary given the growth rate that you have with loans.
Hi. Thank you for covering a lot of ground. That'll be very quick. I also wanted to ask about the margin. I get the Q4.
Um, view, so I'm happy with that. I guess where I'm going or what I'm thinking about is longer term.
In the 26th and 1.
Lamar Prasad: I wonder if you could provide some insight into how that term book on the deposit side is maturing and rolling off and on, and is there any possible tailwind coming from that or not. That would be helpful just so I can frame and think about some of the drivers for your NIM into 2026 and 2027.
Off. And on. And is there any possible tailwind coming from that or not? Um, that would be helpful just so I can frame and think about some of the drivers for your NIM into 2026 and 2027.
David Wilkes: Sure, thanks, Darko. I'd split that into two pieces. You mentioned the brokered term deposits. We see that as our marginal cost of funds. You'll see growth there, our marginal funding source. You'll see growth there as the portfolio grows, where you'll really see that behavior more apparent is in EQ Bank. You can see it in the growth in the demand deposits on EQ Bank and the term in EQ Bank coming down. We're seeing that behavior too, where customers that had purchased a GIC with us last year at this time at 5% are now rolling into our notice savings account product or our HESAs. Both of those, we manage to, while still giving great value to customers, that broader margin. I think you'll see that, and that's where we can actively manage to go forward in the EQ Bank side.
Sure, thanks, DCO. I'd split that into two pieces. So, you mentioned the broker term deposits. We see that as our marginal cost of funds, so you'll see growth there, or as a marginal funding source, so you'll see growth there.
Um, so as, as the portfolio Grows Where, where you'll really see that more, that behavior more, uh, apparent as an EQ bank. And so you can see it in the growth, in the demand, deposits on your cue bank, and the term and EQ Bank coming down. So we're seeing that behavior too. Where customers that had
Um, those who purchased a GIC with us last year, at this time, at 5%, are now rolling into our notice savings account product or our HISA, and both of those...
We managed to, uh, a while still giving great value to customers a broader margin. And so I think you'll see that, and that's where we can actively manage going forward and the EQ Bank side.
Lamar Prasad: Would I be correct in presuming that as we roll forward, unless we get rate cuts, you would still get some improvement in margin taken all in on your term book, or am I wrong in that?
And so would I be correct in presuming that?
As we roll forward, unless we get rate cuts.
That you would still get some improvement in margin. Um, taken all in on your term book, or am I wrong in that?
David Wilkes: Yeah, the way I think about it is the split between EQ Bank and again, the rest of the brokered markets. EQ Bank, as it shifts a little bit more to demand each quarter, and so it's more, our demand deposits are up 47% year over year. That's where we get more margin in the deposit book. The rest of the lending portfolio is priced relative to that brokered deposit. We don't see expansion there. That's really just almost our FTP type number.
Lamar Prasad: Okay. The cut in rates at EQ Bank is not expected to have an impact on your growth rate of those deposits?
Yeah, the way I think about it is this the split between EQ bank and again, the rest of the brokered markets, E2 Bank as it, it shifts a little bit more to demand each quarter and so it's it's more. It's for our demand, deposits are up, 47% year-over-year. That's where we get more margin in the in the deposit book. The rest of the lending portfolio is priced relative to that broker. Um, that broker deposit so we don't see like expansion in there. That's really just almost our FTP type number.
Okay. And so the cut and rates at EQ Bank are not expected to have an impact on your growth rate of those deposits.
David Wilkes: No, we think the value prop right now on those is very compelling in the market.
Lamar Prasad: It still is. Okay, thank you very much. It's helpful.
No, we think the value proposition right now on those is very compelling in the market.
Still is. Okay, thank you very much. It's helpful.
David Wilkes: Thanks, Darko.
Lamar Prasad: Thanks, Darko.
Next Circle.
Joanna: Thank you, Mr. Westlake. There are no further questions. Back to you for closing comments.
Thank you, Mr. Westlake. There are no...
Lamar Prasad: All right. Thank you. Thanks again for joining us, everyone, today. For some of our listeners, Annalisa, Lamar, David, and I will be at the Scotia Financials Conference on September 3 and the CIBC Financials Conference in Montreal on September 25. To everyone, I look forward to sharing more in December. Have a great day.
All right, thank you. Uh, thanks again for joining us today and for some of our listeners. Annalisa Lamar, David, and I will be at the Scotia Financials Conference on September 3rd and the CIBC Financials Conference in Montreal on September 25th.
To everyone, I look forward to sharing more in December. Have a great day.
Joanna: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.
Ladies and gentlemen.
Thank you. Please disconnect your lines.