Q3 2026 EQB Inc Earnings Call

August 27, 2026

Speaker #1: Welcome to EQB's earnings call for the third quarter of 2026. Please note that this call is being recorded on Thursday, August 27, 2026. It is now my pleasure to turn the call over to Lamar Prasad, Senior Vice President of Investor Relations. Please go ahead.

Operator: Welcome to EQB's earnings call for Q3 2026. Note that this call is being recorded on Thursday, 27 August 2026. It is now my pleasure to turn the call over to Lemar Persaud, Senior Vice President, Investor Relations. Please go ahead.

Speaker #2: Thank you, Sylvie, and good morning, everyone. Your hosts for today's Q3 results call are Chadwick Westlake, President and CEO; Annalisa Sonani, CFO; and Puneesh Arora, CRO.

Lemar Persaud: Thank you, Sylvie, and good morning, everyone. Your hosts for today's Q3 results call are Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Puneesh Arora, CRO. Also present for the Q&A session is Darren Lorimer, EVP Commercial Banking, and Daniel Rethazy, EVP Personal Banking. After prepared remarks, we will open the lines for questions from our pre-qualified analysts. We encourage you to also log in to our webcast and view our quarterly presentation, which will be referenced during the prepared remarks. On slide 2 of our presentation, you will find EQB's caution regarding forward-looking statements, which involves assumptions that have inherent risks and uncertainties. Actual results may differ materially. I would remind listeners that all figures referenced today are on an adjusted basis, where applicable, unless otherwise noted. With that, I will now turn the call over to Chadwick.

Speaker #2: Also present for the Q&A session are Darren Lorimer, EVP, Commercial Banking; and Daniel Retazi, EVP, Personal Banking. After the prepared remarks, we will open the lines for questions from our pre-qualified analysts.

Speaker #2: We encourage you to also log into our webcast and view our quarterly presentation, which will be referenced during the prepared remarks. On slide 2 of our presentation, you will find EQB's caution regarding forward-looking statements, which involves assumptions that have inherent risks and uncertainties.

Speaker #2: Actual results may differ materially. I would remind listeners that all figures referenced today are on an adjusted basis where applicable, unless otherwise noted. With that, I will now turn the call over to Chadwick.

Speaker #3: Thanks, Lamar, and good morning. The third quarter marked a historic inflection point for EQB. It is worth taking a moment to acknowledge what it took to get here.

Chadwick Westlake: Thanks, Lemar, and good morning. Q3 marked a historic inflection point for EQB. It is worth taking a moment to acknowledge what it took to get here. The complexity, the pace of change, and the sheer amount of effort to decisively close our PC Financial transaction. Hundreds of people across EQB and PC Financial spent months planning, testing, and preparing to make a very complex integration feel seamless from day one. Through it all, we remained focused on our customers, supported one another, and delivered an extraordinary outcome. We're a very different challenger now, with a new level of relevance, reach, and choice for millions of everyday Canadians. What excites me most is that we're only beginning to unlock the opportunity ahead. At the same time, the quarter behind us is not a clean reflection of the earnings power of the combined franchise.

Speaker #3: The complexity, the pace of change, and the sheer amount of effort to decisively close our PC Financial transaction—hundreds of people across EQB and PC Financial spent months planning, testing, and preparing to make a very complex integration feel seamless from day one.

Speaker #3: Through it all, we remained focused on our customers, supported one another, and delivered an extraordinary outcome. We're a very different challenger now, with a new level of relevance, reach, and choice for millions of everyday Canadians.

Speaker #3: What excites me most is that we are only beginning to unlock the opportunity ahead. At the same time, the quarter behind us is not a clean reflection of the earnings power of the combined franchise.

Speaker #3: We reported only one month of PC financial results in a seasonally dynamic cards business, alongside the accounting and capital impacts associated with the transaction.

Chadwick Westlake: We reported only one month of PC Financial results in a seasonally dynamic cards business, alongside the accounting and capital impacts associated with the transaction. Even in that context, PC Financial contributed approximately CAD 10 million of earnings, excluding the favorable impacts of purchase price accounting, reinforcing our confidence in the long-term value. Early days, the integration is at, and in some cases, ahead of expectations. Against our CAD 30 million cost synergy target, we achieved 50% on an annualized basis in the first month, plus organic growth month-over-month across our new product shelf. The composition of our earnings is very different now. On a pro forma basis, PC Financial would have approximately doubled revenue, excluding loyalty point costs, and nearly tripled non-interest revenue, significantly increasing the proportion of recurring fee-based earnings within the franchise.

Speaker #3: Even in that context, PC Financial contributed approximately $10 million of earnings, excluding the favorable impacts of purchase price accounting. This reinforces our confidence in the long-term value.

Speaker #3: In the early days, the integration is at, and in some cases ahead of, expectations. Against our $30 million cost synergy target, we achieved 50% on an annualized basis in the first month, plus organic growth month over month across our new product shelf.

Speaker #3: The composition of our earnings is very different now. On a pro forma basis, PC Financial would have approximately doubled revenue, excluding loyalty point costs, and nearly tripled non-interest revenue, significantly increasing the proportion of recurring fee-based earnings within the franchise.

Speaker #3: We've also started to go to market with real ambition for our EQ Bank brand as part of the early integration, and with our game-changing PC Optimum and Loblaw partnership.

Chadwick Westlake: We have also started to go to market with real ambition for our EQ Bank brand as part of the early integration and with our game-changing PC Optimum and Loblaw partnership. For example, a few weeks ago, we announced The Grand Scan Contest, the largest PC Optimum points giveaway in history, with 25 million points for a single winner. As part of this, we introduced multiple EQ Bank pop-up stores inside Loblaws in three major cities across Canada. Most banks compete for a customer with a one-time offer and an appointment. We are now meeting 14 to 15 million Canadians where they are every week, in the grocery aisle or running errands and filling up their cars with brands they trust. This gives us a unique opportunity to build tremendous awareness, engagement, and ultimately customer relationships at a scale very few banks can match.

Speaker #3: For example, a few weeks ago, we announced the Grand Scan contest—the largest PC Optimum points giveaway in history—with 25 million points for a single winner.

Speaker #3: As part of this, we introduced multiple EQ Bank pop-up stores inside Loblaws in three major cities across Canada. Most banks compete for a customer with a one-time offer and an appointment.

Speaker #3: We're now meeting 14 to 15 million Canadians where they are every week—in the grocery aisle, while running errands, and when filling up their cars with brands they trust.

Speaker #3: This gives us a unique opportunity to build tremendous awareness, engagement, and ultimately, customer relationships at a scale very few banks can match. Our purpose is to help Canadians get ahead every day.

Chadwick Westlake: Our purpose is to help Canadians get ahead every day. Today, we have the reach, capabilities, and scale to do that in entirely new ways. Now, before moving to some points on the quarter, a few comments on talent. We welcomed over 300 new PC Financial colleagues, and the transition was seamless from day one. These new colleagues include our Chief Risk Officer, Puneesh, who you will hear from shortly. Since joining as part of the PC Financial, he has spent considerable time evaluating our risk capabilities and making enhancements. He is part of a broader strengthening of our team, as we also welcome Michaela Garfield as Senior Vice President, Customer Growth, Experience and Strategy, and Ian Hanning as Senior Vice President, Credit Cards, Insurance, and Operations. On the technology side, we also welcome Basil Eltom, Chief Technology Officer for our digital business.

Speaker #3: Today, we have the reach, capabilities, and scale to do that in entirely new ways. Now, before moving to some points on the quarter, a few comments on talent.

Speaker #3: We welcomed over 300 new PC Financial colleagues, and the transition was seamless from day one. These new colleagues include our Chief Risk Officer, Puneesh, who you'll hear from shortly. Since joining as part of PC Financial, he has spent considerable time evaluating our risk capabilities and making enhancements.

Speaker #3: He is part of a broader strengthening of our team, as we also welcomed Mikhail Garfield, Senior Vice President, Customer Growth Experience and Strategy, and Ian Henning, Senior Vice President, Credit Cards, Insurance, and Operations.

Speaker #3: On the technology side, we also welcomed Basil Eltom, Chief Technology Officer for our digital business. I want to again thank Marlene Lenarduzzi for her years of service as CRO.

Chadwick Westlake: I want to again thank Marlene Lenarduzzi for her years of service as CRO. We are pleased to continue benefiting from her experience and counsel in her role as Special Advisor. Shifting to three areas I will speak to before Anilisa shares more on results. One, context for the quarter, two, our core businesses, and three, outlook. Despite being a complex and noisy quarter, as anticipated, there were several clear, encouraging outcomes. ROE and return on tangible common equity, or ROTCE, both improved sequentially and year-over-year. With the closing of PC Financial, we recognized significant goodwill and intangibles reflecting the value of the acquired franchise and an increase in EQB share price at closing. ROE will continue to show you the full capital we deployed, while ROTCE excludes goodwill and other intangible assets. We believe it offers a cleaner view of operating performance with the deal closed.

Speaker #3: We are pleased to continue benefiting from her experience in counsel and her role as Special Advisor. Shifting to three areas, I'll speak to those before Annalisa shares more on results.

Speaker #3: One, context for the quarter. Two, our core businesses. And three, outlook. Despite being a complex and noisy quarter, as anticipated, there were several clear and encouraging outcomes.

Speaker #3: ROE and return on tangible common equity, or ROTCE, both improved sequentially and year over year. With the closing of PC Financial, we recognize significant goodwill and intangibles, reflecting the value of the acquired franchise in an increase in EQB share price at closing.

Speaker #3: ROE will continue to show you the full capital we deployed, while ROTCE excludes goodwill and other intangible assets. We believe it offers a clearer view of operating performance with the deal closed.

Speaker #3: For the first time, we generated over $1 billion of revenue through the first nine months of a fiscal year. With just one month of PC results, net interest margin rose to 2.41%, reflecting the evolution of our business mix and earnings profile.

Chadwick Westlake: For the first time, we generated over CAD 1 billion of revenue through the first 9 months into a fiscal year. With just one month of PC results, net interest margin rose to 2.41%, reflecting the evolution of our business mix and earnings profile. We exited the quarter with a much more diversified balance sheet and revenue mix, plus our highest ever level of direct retail deposits. We have an efficient operating model with opportunities for continued improvement in our cost base. Taken together, these results point to a stronger, more resilient franchise with growing earnings power. The primary headwind in the Q3 was a higher level of performing and impaired credit provisions. We proactively updated our provisions following a comprehensive review of our portfolio and the evolution of economic indicators alongside our assessment of the operating environment and ongoing uncertainty, which Puneesh will discuss.

Speaker #3: We exited the quarter with a much more diversified balance sheet and revenue mix, plus our highest-ever level of direct retail deposits. We have an efficient operating model, with opportunities for continued improvement in our cost base.

Speaker #3: Taken together, these results point to a stronger, more resilient franchise with growing earnings power. The primary headwind in the third quarter was a higher level of performing and impaired credit provisions.

Speaker #3: We proactively updated our provisions following a comprehensive review of our portfolio and the evolution of economic indicators, alongside our assessment of the operating environment and ongoing uncertainty, which Puneesh will discuss.

Speaker #3: Early-stage delinquency trends across the portfolio are stable to improving, and we believe we are positioned to perform well across a range of economic outcomes.

Chadwick Westlake: Early-stage delinquency trends across the portfolio are stable to improving, and we believe we are positioned to perform well across a range of economic outcomes. Turning to the core business, this is a very different company than it was a year ago. We said we would restore efficiency as a competitive advantage, and that work is showing up in our results. We are making clear choices about where to invest capital, focusing on businesses where we see sustainable and attractive returns, and just as importantly, stepping back where we do not. With new energy and focus in Personal Banking under Daniel's leadership, we gained meaningful market share in single-family uninsured originations and continue to drive strong growth in reverse mortgages. We are leaning into our competitive advantages, sharpening our execution, and winning in areas we choose to compete.

Speaker #3: Turning to the core business, this is a very different company than it was a year ago. We said we would restore efficiency as a competitive advantage, and that work is showing up in our results.

Speaker #3: We are making clear choices about where to invest capital, focusing on businesses where we see sustainable and attractive returns, and, just as importantly, stepping back where we do not.

Speaker #3: With new energy and focus, and personal banking under Daniel's leadership, we gained meaningful market share in single-family uninsured originations and continue to drive strong growth in reverse mortgages.

Speaker #3: We are leaning into our competitive advantages, sharpening our execution, and winning in areas we choose to compete. I expect that momentum will increasingly translate into stronger net asset growth in the quarters ahead.

Chadwick Westlake: I expect that momentum will increasingly translate into stronger net asset growth in the quarters ahead. While market share gains are encouraging, the housing market in general remains subdued with limited industry-wide growth. That said, taking share matters. We are seeing stronger application volumes, deepening broker relationships, and improving underwriting efficiency. As market activity returns, we will be well-positioned to convert that momentum into earnings growth. Our largest revenue-generating business is now credit card interest and fee income from the tens of billions in annual spend across our suite of PC Mastercards. In the first month following close, credit card applications increased 3% month-over-month, with initial cross-selling to existing EQ Bank customers. It was also a record month for new PC Insurance policies, reaching 93,000 in force. These indicators point to strong customer engagement and are an encouraging start. Commercial Banking continues to perform well under Darren's leadership.

Speaker #3: While market share gains are encouraging, the housing market in general remains subdued, with limited industry-wide growth. That said, taking share matters. We are seeing stronger application volumes, deepening broker relationships, and improving underwriting efficiency.

Speaker #3: As market activity returns, we will be well-positioned to convert that momentum into earnings growth. Our largest revenue-generating business is now credit card interest and fee income, from the tens of billions in annual spend across our suite of PC Mastercards.

Speaker #3: In the first month following close, credit card applications increased 3% month over month, with initial cross-selling to existing EQ Bank customers. It was also a record month for new PC insurance policies, reaching $93,000 in force.

Speaker #3: These indicators point to strong customer engagement and are an encouraging start. Commercial Banking continues to perform well under Darren's leadership. Importantly, our insured multi-unit residential business—which finances exactly what Canada needs more of: purpose-built rental housing supply—is also performing well.

Chadwick Westlake: Importantly, our insured multi-unit residential business, which finances exactly what Canada needs more of: purpose-built rental housing supply. Uninsured commercial real estate remains the more challenging part of the market, and our approach has been consistent. Fewer, better opportunities with strong risk-adjusted yields and close attention to credit quality. Being cloud-native and API first was a deliberate choice years ago, and it is paying off now. It is why we can integrate a business like PC Financial at this pace, why we can scale without adding cost at the same rate, and why our investments in technology and AI translate into efficiency rather than added overhead. This creates a structural advantage over institutions many times our size, and we intend to keep pressing it. That brings me to outlook.

Speaker #3: Uninsured commercial real estate remains the more challenging part of the market, and our approach has been consistent: fewer, better opportunities with strong risk-adjusted yields and close attention to credit quality.

Speaker #3: Being cloud-native and API-first was a deliberate choice years ago, and it's paying off now. It's why we can integrate a business like PC Financial at this pace, why we can scale without adding costs at the same rate, and why our investments in technology and AI translate into efficiency rather than added overhead.

Speaker #3: This creates a structural advantage over institutions many times our size, and we intend to keep pressing it. That brings me to outlook. We have one quarter left in fiscal 2026, and we look forward to sharing our fiscal 2027 and refreshed medium-term outlook at our Investor Day on December 7th, which is set to be an immersive and highly engaging morning for attendees here in the EQ Bank Tower.

Chadwick Westlake: We have one quarter left in fiscal 2026, and we look forward to sharing our fiscal 2027 and refreshed medium-term outlook at our Investor Day on 7 December, which is set to be an immersive and highly engaging morning for attendees here in the EQ Bank Tower. In Q4, investors will see the first full quarter contribution of PC Financial, a further increase in weighted average shares outstanding, and still only a portion of the synergies we expect to realize. We have all experienced sentiment in past days, weeks, and months about the magnitude of geopolitical and macro uncertainty and the potential impact to Canadian employment and the economy broadly. We do believe Canadian households are proving resilient, and our balance sheet shows that. We do focus on everyday Canadians and small business owners that are impacted.

Speaker #3: In Q4, investors will see their first full quarter contribution of PC Financial, a further increase in weighted average shares outstanding, and still only a portion of the synergies we expect to realize.

Speaker #3: We have all experienced sentiment in past days, weeks, and months about the magnitude of geopolitical and macro uncertainty, and the potential impact to Canadian employment and the economy broadly.

Speaker #3: We do believe Canadian households are proving resilient, and our balance sheet shows that. But we do focus on everyday Canadians and small business owners that are impacted.

Speaker #3: Our purpose is to be there to help them get ahead every day, and this volatility and uncertainty could continue for an extended period of time.

Chadwick Westlake: Our purpose is to be there to help them get ahead every day, and this volatility and uncertainty could continue for an extended period of time. Taking those factors into account, we expect fiscal 2026 ROE will improve further from our Q3 level, including ROTCE in the 12% range as we make strides toward our medium-term ranges. We built proactive provisioning in Q3 in readiness for this type of environment, and the ongoing trade uncertainty could still add more sensitivity to these ranges. On capital allocation, our focus is reinvestment in the business while maintaining the flexibility that has long been one of EQB's strategic advantages. Our top priority is a successful integration and progress to our ROE objectives. We will remain opportunistic across share repurchases with capacity under our existing NCIB, dividend growth, and selective inorganic opportunities.

Speaker #3: But taking those factors into account, we expect fiscal 2026 ROE will improve further from our Q3 level, including ROTCE in the 12% range, as we make strides toward our medium-term ranges.

Speaker #3: We built proactive provisioning in Q3 and readiness for this type of environment, and the ongoing trade uncertainty could still add more sensitivity to these ranges.

Speaker #3: On capital allocation, our focus is reinvestment in the business while maintaining the flexibility that has long been one of EQB's strategic advantages. Our top priority is a successful integration and progress toward our ROE objectives.

Speaker #3: We will remain opportunistic across share repurchases, with capacity under our existing NCIB, dividend growth, and selective inorganic opportunities. There is significant but exciting integration work ahead of us, and we are only at the beginning of what is possible.

Chadwick Westlake: There is significant but exciting integration work ahead of us, and we are only at the beginning of what is possible. We have a clear strategy, strong momentum, and a unique opportunity to help millions more Canadians get ahead. This week marks my first year as CEO, and I have never been more optimistic about the future of EQB. Now over to Anilisa.

Speaker #3: We have a clear strategy, strong momentum, and a unique opportunity to help millions more Canadians get ahead. This week marks my first year as CEO, and I have never been more optimistic about the future of EQB.

Speaker #3: Now over to Annelise.

Speaker #2: Thanks, Chadwick, and good morning, everyone. As a reminder, my comments will be on an adjusted basis, and you can find a summary of these adjustments on slide 25 of today's presentation.

Anilisa Sainani: Thanks, Chadwick, and good morning, everyone. As a reminder, my comments will be on an adjusted basis, and you can find a summary of these adjustments on slide 25 of today's presentation. Adjusted results exclude the CAD 219 million day one provision on performing acquired credit card receivables and other acquisition-related items. Starting on slide 7. As Chadwick mentioned, Q3 marks the beginning of a significant shift in EQB's earning profile and the immediate shift in our revenue mix and balance sheet. As this is our first quarter reporting as a combined business, we have provided additional detail on the acquisition and related accounting impacts on slide 23 of today's earnings presentation. Slide 24 also highlights key accounting considerations related to the acquisition and how the impacts are expected to flow through reported and adjusted earnings going forward. With that context, I will turn to this quarter's financial performance.

Speaker #2: Adjusted results exclude the $219 million day-one provision on performing acquired credit card receivables and other acquisition-related items. Starting on slide 7, as Chadwick mentioned, Q3 marks the beginning of a significant shift in EQB's earnings profile and an immediate shift in our revenue mix and balance sheet.

Speaker #2: As this is our first quarter reporting as a combined business, we have provided additional detail on the acquisition and related accounting impacts on slide 23 of today's earnings presentation.

Speaker #2: Slide 24 also highlights key accounting considerations related to the acquisition, and how the impacts are expected to flow through reported and adjusted earnings going forward.

Speaker #2: With that context, I'll turn to this quarter's financial performance. Sequentially, diluted EPS was up 4% to $2.12, and ROE increased to 10.3%. The positive impacts of the acquisition and continued expense discipline more than offset a continued tough operating environment that resulted in higher PCLs and slower revenue growth.

Anilisa Sainani: Sequentially, diluted EPS was up 4% to CAD 2.12, and ROE increased to 10.3%. The positive impacts of the acquisition and continued expense discipline more than offset a continued tough operating environment that resulted in higher PCLs and slower revenue growth, overall delivering returns on a significantly larger equity base following the acquisition. ROTCE, which excludes the approximately CAD 580 million of goodwill and intangibles recognized on 1 July, increased 40 basis points to 11.1%. Turning to the balance sheet on slide 8. Loans under management, or LUM, are a key performance metric as they include our market-leading position in insured multi-unit residential mortgages. LUM increased 12% year over year and 7% sequentially to CAD 82.5 billion. Sequential growth was primarily driven by the acquisition of the acquired PC Financial cards.

Speaker #2: Overall, delivering returns on a significantly larger equity base following the acquisition. ROTCE, which excludes the approximately $580 million of goodwill and intangibles recognized on July 1st, increased 40 basis points to 11.1%.

Speaker #2: Turning to the balance sheet on slide 8, loans under management, or LUM, are a key performance metric, as they include our market-leading position in insured multi-unit residential mortgages.

Speaker #2: LUM increased 12% year-over-year and 7% sequentially to $82.5 billion. Sequential growth was primarily driven by the acquisition of the PC Financial cards. Excluding the acquired cards, LUM increased 1% sequentially, driven by continued strength in our insured multi-unit residential, decumulation, and uninsured single-family residential portfolios.

Anilisa Sainani: Excluding the acquired cards, LUM increased 1% sequentially, driven by continued strength in our insured multi-unit residential, decumulation and uninsured single-family residential portfolios. We achieved this growth despite softer market conditions, reflecting the benefits of our ongoing strategy to optimize our portfolio mix and redeploy capital away from lower return businesses, including certain pockets of insured single-family residential and long-haul and subprime leases in our equipment financing portfolios. Conventional loans, which exclude the insured single-family and multi-unit residential portfolios, are the primary contributor of net interest income. Conventional loans increased 16% year over year and 14% sequentially, reflecting the addition of the cards to the EQB product shelf and continued growth across most remaining portfolios. Looking ahead, the addition of PC Financial broadens the drivers of growth across the franchise.

Speaker #2: We achieved this growth despite softer market conditions, reflecting the benefits of our ongoing strategy to optimize our portfolio mix and redeploy capital away from lower-return businesses, including certain pockets of insured single-family residential, as well as long-haul and subprime leases in our equipment financing portfolios.

Speaker #2: Conventional loans, which exclude the insured single-family and multi-unit residential portfolios, are the primary contributor of net interest income. Conventional loans increased 16% year-over-year and 14% sequentially, reflecting the addition of the cards to the EQB product shelf and continued growth across most remaining portfolios.

Speaker #2: Looking ahead, the addition of PC Financial broadens the drivers of growth across the franchise. While lending remains an important growth engine, we now benefit from the addition of a scaled, loyalty-linked cards business and a significantly larger customer base, reducing our dependence on housing-related activity.

Anilisa Sainani: While lending remains an important growth engine, we now benefit from the addition of a scaled loyalty-linked cards business and a significantly larger customer base, reducing our dependence on housing-related activity. We are on track to achieve our 2026 LUM growth outlook of high single digit to low double-digit growth and now expect to land in the upper end of the range as a combined franchise. Turning to deposits. Total deposits were up 3% year over year and 2% sequentially, driven by growth in retail banking deposits following the closing of PC Financial, partly offset by the impacts of a covered bond maturity and seasonality in credit union balances. We continue to access a diversified mix of funding sources. This provides important flexibility and enables us to actively manage and optimize our cost of funding while maintaining pricing discipline in a competitive environment.

Speaker #2: We are on track to achieve our 2026 LUM growth outlook of high single-digit to low double-digit growth, and now expect to land at the upper end of the range as a combined franchise.

Speaker #2: Now, turning to deposits. Total deposits were up 3% year-over-year and 2% sequentially, driven by growth in retail banking deposits following the closing of PC Financial, partly offset by the impacts of a covered bond maturity and seasonality in credit union balances.

Speaker #2: We continue to access a diversified mix of funding sources. This provides important flexibility and enables us to actively manage and optimize our cost of funding, while maintaining pricing discipline in a competitive environment.

Speaker #2: We also continue to improve the proportion of lower-cost funding, supporting margin resilience in a difficult and highly competitive environment. Retail deposits now represent 29% of total funding, up more than 2 percentage points from a year ago.

Anilisa Sainani: We also continue to improve the proportion of lower-cost funding, supporting margin resilience in a difficult and highly competitive environment. Retail deposits now represent 29% of total funding, up more than two percentage points from a year ago. As we deepen customer relationships across our larger franchise, we expect further growth in lower cost deposits and a continued strengthening of our funding profile. Turning to NII on slide 9. Net interest income was CAD 319 million, up 22% both year over year and quarter over quarter. NIM increased 33 basis points, reflecting a structural shift in our product mix and margin profile following the addition of the acquired credit card portfolio. Margins and other personal and commercial portfolios were stable on a normalized days basis as compared to last quarter, reflecting disciplined pricing and proactive margin management.

Speaker #2: As we deepen customer relationships across our larger franchise, we expect further growth in lower-cost deposits and a continued strengthening of our funding profile. Turning to NII on slide 9, net interest income was $319 million, up 22% both year-over-year and quarter-over-quarter.

Speaker #2: NIM increased 33 basis points, reflecting a structural shift in our product mix and margin profile following the addition of the acquired credit card portfolio.

Speaker #2: Margins and other personal and commercial portfolios were stable on a normalized-days basis as compared to last quarter, reflecting disciplined pricing and proactive margin management.

Speaker #2: Looking ahead, we expect margin performance to improve next quarter, reflecting a full quarter's contribution from PC Financial. Turning to slide 10, non-interest revenue of $73.9 million increased 55% year-over-year and 77% sequentially. The addition of PC Financial represents a significant diversification of our revenue streams and introduces a larger source of recurring fee-based income through interchange, card fees, and insurance-related revenue.

Anilisa Sainani: Looking ahead, we expect margin performance to improve next quarter, reflecting a full quarter's contribution from PC Financial. Turning to slide 10, non-interest revenue of CAD 73.9 million increased 55% year over year and 77% sequentially. The addition of PC Financial represents a significant diversification of our revenue streams and introduces a larger source of recurring fee-based income through interchange, card fees, and insurance-related revenue. These benefits were partially offset by lower securitization income, where we saw activity moderating and tighter spreads driven by sluggish economic and interest rate environments. Turning next on slide 11, adjusted non-interest expenses increased 19% year over year and 32% sequentially.

Speaker #2: These benefits were partially offset by lower securitization income, where we saw activity moderating and tighter spreads driven by sluggish economic and interest-rate environments. Turning to NIX on slide 11, adjusted non-interest expenses increased 19% year-over-year and 32% sequentially. Year-over-year results reflected the addition of PC Financial, partially offset by the benefits of the strategic restructuring program completed last October, where we are tracking to exceed our pre-tax expense savings target of $45 million, while continuing to invest thoughtfully in growth and strategic priorities.

Anilisa Sainani: Year over year results reflected the addition of PC Financial, partially offset by the benefits of the strategic restructuring program completed last October, where we are tracking to exceed our pre-tax expense savings target of CAD 45 million, while continuing to invest thoughtfully in growth and strategic priorities. Sequentially, results reflected the addition of PC Financial and higher initiative spending while expense discipline remained strong. Recall that Q2 also benefited from a few favorable items, including a capital tax benefit. Efficiency remains strong at 50.1%, and we are on track to achieve our low 50s target for fiscal 2026, despite loyalty links cards portfolios carrying a higher relative expense profile. Our focus remains on managing the combined organization thoughtfully while continuing to invest in customer growth and the capabilities required to support a business of greater scale. As Chadwick mentioned, we have strong initial momentum capturing integration cost synergies already.

Speaker #2: Sequentially, results reflected the addition of PC Financial and higher initiative spending, while expense discipline remained strong. Recall that Q2 also benefited from a few favorable items, including a capital tax benefit.

Speaker #2: Efficiency remained strong at 50.1%, and we are on track to achieve our low-50s target for fiscal 2026, despite loyalty-linked card portfolios carrying a higher relative expense profile.

Speaker #2: Our focus remains on managing the combined organization thoughtfully, while continuing to invest in customer growth and the capabilities required to support a business of greater scale.

Speaker #2: As Chadwick mentioned, we have strong initial momentum capturing integration cost synergies already. And finally, turning to capital on slide 12, the bank CET1 ratio remains strong at 13.4%, as compared to 13.6% last quarter, reflecting the impact of RWA growth, primarily driven by the acquisition, and mostly offset by the issuance of common shares and modest capital consumption associated with the quarter's reported results.

Anilisa Sainani: Finally, turning to capital on slide 12, the bank's CET1 ratio remains strong at 13.4% as compared to 13.6% last quarter, reflecting the impact of RWA growth, primarily driven by the acquisition, and mostly offset by the issuance of common shares and modest capital consumption associated with the quarter's reported results. Our total capital ratio is strong and remains well above our target and regulatory minimums. We also increased the dividend to CAD 0.63 per share this morning, up 3% quarter over quarter and 15% year over year, continuing our track record of returning capital to shareholders. I'll now turn the call over to Puneesh to take us through risk. Welcome, Puneesh.

Speaker #2: Our total capital ratio is strong and remains well above our target and regulatory minimums. We also increased the dividend to $0.63 per share this morning, up 3% quarter-over-quarter and 15% year-over-year, continuing our track record of returning capital to shareholders.

Speaker #2: I'll now turn the call over to Panish to take us through risks. Welcome, Panish.

Speaker #3: Thank you, Analisa and Chadwick, for the kind introduction. It is a privilege to serve as the CRO of EQB Inc. I'll start with slide 14.

Puneesh Arora: Thank you, Anilisa and Chadwick, for the kind introduction. It is privilege to serve as the CRO of EQB Inc. I'll start with slide 14. The closing of PC Financial acquisition meaningfully changes the composition of our lending portfolio. It also resulted in several acquisition-related credit impacts that are important to distinguish from the credit underlying performance. As Anilisa mentioned, we recorded day-one performing provisions of CAD 219 million against the card portfolio. It is one-time acquisition-related provision and does not reflect credit deterioration since closing. Drawing on my experience managing PC Financial's risk group, I would highlight a key following points about the portfolio. PC Financial's credit card portfolio is seventh largest by purchase volume, which drives fee-based interchange revenue, and eighth largest by outstanding balances. It is top-in-wallet card for 42% of our customers, driving strong engagement and loyalty.

Speaker #3: The closing of the PC Financial acquisition meaningfully changes the composition of our lending portfolio. It also resulted in several acquisition-related credit impacts that are important to distinguish from the underlying credit performance.

Speaker #3: As Analisa mentioned, we recorded day-one performing provisions of $219 million against the card portfolio. It is a one-time acquisition-related provision and does not reflect credit deterioration since closing.

Speaker #3: Drawing on my experience managing PC Financial's risk group, I would highlight the following key points about the portfolio. PC Financial's credit card portfolio is the seventh largest by purchase volume, which drives fee-based interchange revenue, and the eighth largest by outstanding balances.

Speaker #3: It is the top in-wallet card for 42% of our customers, driving strong engagement and loyalty. Approximately 72% of the customers have been with PC Financial for more than five years, underscoring the loyalty and tenure of the customer base.

Puneesh Arora: Approximately 72% of the customers have been with PC Financial for more than five years, underscoring the loyalty and tenure of the customer base. Finally, a significant portion of our purchase volume comes outside Loblaw banners, underscoring the broad utility of the card. Speaking about the credit quality of the portfolio, approximately 70% of the customers are super prime with an average FICO score of 768. The portfolio is well diversified across Canada. Taken together, these metrics reinforce our view that this is resilient, high-quality portfolio with strong through the cycle performance characteristics. We believe the portfolio scale, seasoning, and broad national customer base provides a strong foundation as we integrate cards into our risk management framework.

Speaker #3: Finally, a significant portion of our purchase volume comes from outside Loblaw banners, underscoring the broad utility of the card. Speaking about the credit quality of the portfolio, approximately 70% of the customers are super prime, with an average FICO score of 768.

Speaker #3: The portfolio is well-diversified across Canada taken together. These metrics reinforce our view that this is a resilient, high-quality portfolio with strong through-the-cycle performance characteristics.

Speaker #3: We believe the portfolio scale, seasoning, and broad national customer base provide a strong foundation as we integrate cards into our risk management framework. Performing provisions were $35.2 million, largely driven by the acquired credit card portfolio, which contributed $21 million during July.

Puneesh Arora: Performing provisions were CAD 35.2 million, largely driven by acquired credit card portfolio, which contributed CAD 21 million during July, as well as a material build with the personal residential portfolio in response to the current macroeconomic environment. In an environment characterized by persistent uncertainty, our priorities are unchanged: disciplined lending and rigorous credit oversight. Our asset-backed lending portfolios continue to be focused in urban areas with economic diversity. Our ACL coverage ratio increased to 95 basis points or 50 basis points, excluding the impact of the credit card portfolio, compared to 46 basis points in Q2 and 33 basis points a year ago. Turning to slide 15, impaired PCLs increased 7 basis points sequentially to 42 basis points, reflecting higher provisions across the personal and commercial business, excluding the cards.

Speaker #3: As well as a material build with the personal residential portfolio in response to the current macroeconomic environment. In an environment characterized by persistent uncertainty, our priorities are unchanged: disciplined lending and rigorous credit oversight. Our asset-backed lending portfolios continue to be focused in urban areas with economic diversity.

Speaker #3: Our ACL coverage ratio increased to 95 basis points, or 50 basis points excluding the impact of the credit card portfolio, compared to 46 basis points in Q2 and 33 basis points a year ago.

Speaker #3: Turning to slide 15, impaired PCLs increased 7 basis points sequentially to 42 basis points, reflecting higher provisions across the personal and commercial business, excluding the cards.

Speaker #3: In personal lending, impaired provision increased to $17 million, reflecting continued market softness fueled by uncertainty and extended resolution times. The pressures remained concentrated in select GTA's surrounding suburbs and continued to be primarily associated with vintages linked to peak market values.

Puneesh Arora: In personal lending, impaired provisions increased to CAD 17 million, reflecting continued market softness fueled by uncertainty and extended resolution times. The pressures remain concentrated in select GTAs, surrounding suburbs, and continue to primarily associated with vintages associated with peak market values. Importantly, as noted in prior quarters, we have not observed these pressures spreading to the other regions or vintages. In commercial, impaired provisions increased to CAD 24.9 million. These provisions remain concentrated in small number of previously impaired loans that continue to experience extended resolution times within the subdued commercial real estate market. In equipment financing, provisions increased to CAD 8.4 million, reflecting higher formations during the quarter. While performance in the portfolio was elevated in Q3, we continue to see the benefits of repositioning actions undertaken over the last two years, including reducing our exposure to long-haul trucking and shift to higher quality assets. Turning to slide 16.

Speaker #3: Importantly, as noted in prior quarters, we have not observed these pressures spreading to the other regions or vintages. In Commercial, impaired provisions increased to $24.9 million.

Speaker #3: These provisions remain concentrated in a small number of previously impaired loans that continue to experience extended resolution times within the subdued commercial real estate market.

Puneesh Arora: These provisions remain concentrated in small number of previously impaired loans that continue to experience extended resolution times within the subdued commercial real estate market. In equipment financing, provisions increased to CAD 8.4 million, reflecting higher formations during the quarter. While performance in the portfolio was elevated in Q3, we continue to see the benefits of repositioning actions undertaken over the last two years, including reducing our exposure to long-haul trucking and shift to higher quality assets. Turning to slide 16.

Speaker #3: In equipment financing, provisions increased to $8.4 million, reflecting higher formations during the quarter. While performance in the portfolio was elevated in Q3, we continue to see the benefits of repositioning actions undertaken over the last two years, including reducing our exposure to long-haul trucking and shifting to higher quality assets.

Speaker #3: Turning to slide 16, gross impaired loans increased a modest $38 million, the lowest rate of sequential increase since Q1 2025. The gross impaired loan ratio declined due to growth in the overall loan portfolio, including the addition of the acquired credit card receivables and a slowdown in the pace of new formations.

Puneesh Arora: Gross impaired loans increased a modest CAD 38 million, the lowest rate of sequential since Q1 2025. The gross impaired loan ratio declined due to growth in overall loan portfolio, including the addition of the acquired credit card receivables and slowdown in pace of new formations. Formations were down 16% sequentially, primarily reflecting lower commercial formations, partly offset by modest increase in residential. Residential gains increased 5% quarter over quarter, driven by continued pressure in softer housing market and longer workout times. Gains in commercial lending increased a modest 1% quarter over quarter, driven by new formations, partly offset by resolution and write-off amid a subdued real estate market. As a reminder, approximately 85% of our commercial loan is CMHC insured. We are encouraged by this quarter's modest increase and the last quarter's decline, excluding the large single insured exposure.

Speaker #3: Formations were down 16% sequentially, primarily reflecting lower commercial formations, partly offset by a modest increase in residential. Residential guilds increased 5% quarter-over-quarter, driven by continued pressure in the softer housing market and longer work-out times.

Speaker #3: Guilds in commercial lending increased a modest 1% quarter-over-quarter, driven by new formations partly offset by resolution and write-off amid a subdued real estate market.

Speaker #3: As a reminder, approximately 85% of our commercial loan portfolio is CMHC-insured. We are encouraged by this quarter's modest increase and the last quarter's decline, excluding the large single insured exposure.

Speaker #3: Overall, while credit quality remains uneven, particularly within portions of the residential and commercial real estate markets, we remain comfortable with the quality of our portfolios, the level of reserves we carry, and actions we have taken to proactively position the balance sheet through the cycle.

Puneesh Arora: Overall, while credit quality remains uneven, particularly within the portions of residential and commercial real estate markets, we remain comfortable with the quality of our portfolios, the level of reserves we carry, and actions we have taken to proactively position the balance sheet through the cycle. The addition of PC Financial credit card portfolio further diversifies our credit exposures and earnings profile away from Canadian real estate while continuing to offer attractive risk-adjusted returns. Against a backdrop of elevated macro and geopolitical risk, we continue to expect normalization to be skewed towards 2027, absent a material shift in the outlook. With that, I will turn the call back to Lemar for Q&A portion of the call.

Speaker #3: The addition of the PC Financial credit card portfolio further diversifies our credit exposures and earnings profile away from Canadian real estate, while continuing to offer attractive risk-adjusted returns.

Speaker #3: Against a backdrop of elevated macro and geopolitical risk, we continue to expect normalization to be skewed towards 2027, absent a material shift in the outlook.

Speaker #3: With that, I will turn the call back to Lamar for the Q&A portion of the call.

Speaker #1: Thanks, Pranesh. I would ask that you limit yourself to one or two questions, and then please re-queue so that we can get to everyone.

Lemar Persaud: Thanks, Puneesh. I would ask that you limit yourself to one or two questions, and then please re-queue so that we can get to everyone. With that, operator, can we have the first question from the lines?

Speaker #1: With that, operator, can we have the first question from the lines?

Speaker #4: Thank you, sir. Just a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. And if you wish to withdraw from the process, please press star followed by two.

Operator: Thank you, sir. Just a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. If you wish to withdraw from the process, please press star followed by two. Thank you. Your first question will be from John Aiken at Jefferies.

Speaker #4: Thank you. And your first question will be from John Akin at Jefferies.

Speaker #5: Good morning, Pranesh. Just wanted to clarify your statements on the commercial portfolio. First, commercial X, the equipment financing. You said the increase in the impaired provisions was basically because of the extended resolution portion.

John Aiken: Good morning, Puneesh. Just wanted to clarify your statements on the commercial portfolio. First, commercial ex the equipment financing, you said the increase in the impaired provisions were basically because of the extended resolution portion. Was any of the increase actually related to new formations within the commercial equipment financing portfolio?

Speaker #5: Was any of that, was any of the increase actually related to new formations within the commercial X equipment financing portfolio?

Speaker #3: I would say there were no major formations that came from the portfolio.

Puneesh Arora: I would say it was no major formations came from the portfolio.

Speaker #5: Okay. So then, when I take a look at the fact that the impaired provisions are actually increasing, given the extended resolution period, what can we expect moving forward? Is this going to continue to tick up until these things are resolved, or was there something unusual in the quarter that caused the $2 million increase?

John Aiken: Okay.

Puneesh Arora: Go ahead.

John Aiken: When I take a look at the fact that the impaired provisions are actually increasing given the extended resolution period, what can we expect moving forward in terms of is this going to continue to tick up until these things are resolved, or was there something unusual in the quarter that caused the CAD 2 million increase?

Speaker #3: Yeah, Darren did want to. Yeah, so I was going to add to that. So I think you were talking commercial to real estate impairments—just wanted to be clear.

Darren Lorimer: Yeah. Darren, did want to. Yeah. I was going to add to that. I think you were talking commercial to real estate impairments. Just wanted to be clear.

Puneesh Arora: Yeah. Darren, did want to.

Darren Lorimer: Yeah. I was going to add to that. I think you were talking commercial to real estate impairments. Just wanted to be clear.

Darren Lorimer: Yeah.

John Aiken: Yeah.

Speaker #3: And so the majority of the increase in provisions we took were on a handful of larger commercial loans, where those have been with us for a while—not new formations.

Darren Lorimer: The majority of the increase in provisions we took were on a handful of larger commercial loans, where those have been with us for a while, not new formations. We have seen some softening in distressed asset values in certain locations and certain property types. So that really reflects the increased provisioning. We feel very strongly that they are well-provisioned at this point and do not expect material new provision next quarter, all else equal.

Speaker #3: And we have seen some softening in distressed asset values in certain locations and certain property types. So that really reflects the increased provisioning. We feel very strongly that they're well provisioned at this point.

Speaker #3: And don't expect material new provisions next quarter, all else equal.

Speaker #5: Okay, thank you. I'll re-queue.

John Aiken: Okay. Thank you. I will requeue.

Speaker #4: Next question will be from Gabriel Deschine at National Bank. Please go ahead.

Operator: Next question will be from Gabriel Dechaine at National Bank. Please go ahead.

Speaker #6: Hi, thank you, and good morning. Just, my first question is on the expenses. It's been a good story for the past few quarters, coming in lower than I expected, anyways.

Gabriel Dechaine: Hi. Thank you and good morning. My first question is on the expenses, and it has been a good story for the past few quarters, coming in lower than I expected anyways. I get you are managing the costs against the revenue growth you are seeing, which is reasonable, advisable, all that stuff. Just wondering how that evolves in the coming quarters as the PC Financial integration advances. Any promos, rebranding, things that cost money that might create some noise in the coming quarters, or is that just going to be offset through the synergies?

Speaker #6: I get your managing the costs against the revenue growth you're seeing, which is reasonable, advisable, all that stuff. Just wondering how that evolves in the coming quarters as the PC Financial integration advances any promos, rebranding, things that cost money that might create some noise in the coming quarters or is that just going to be offset through the synergies?

Speaker #3: Thanks, Gabe. Good morning. So, a couple of different dimensions there. One, I'll reiterate what I said: that efficiency will be, and needs to be, a competitive advantage of EQB.

Lemar Persaud: Thanks, Gabe. Good morning. A couple different dimensions there. One, I will reiterate what I said, that efficiency will be and needs to be a competitive advantage of EQB. We will always continue to evaluate this on a continuous improvement process.

Chadwick Westlake: Thanks, Gabe. Good morning. A couple different dimensions there. One, I will reiterate what I said, that efficiency will be and needs to be a competitive advantage of EQB. We will always continue to evaluate this on a continuous improvement process.

Speaker #3: And so we'll always continue to evaluate this as part of a continuous improvement process. There are a few dimensions to that, which the analysis will speak to in a minute.

Chadwick Westlake: There is a few dimensions to that Anilisa will speak to in a minute. I would say, are there costs associated with the integration? Yes. We will certainly have an integration budget, and we will disclose as we spend that. There is investment we will make to converge our brands, to converge the digital platforms, and to ensure we are actually building fulsome customer relationships. That is all part of our business case, and when we really express the accretion that we think we will still generate from this deal. Anilisa, you want to talk about a couple of the cost components to consider and how we are actually going to improve?

Speaker #3: But I would say, are there costs associated with the integration? Yes. We will certainly have an integration budget, and we'll disclose as we spend that.

Speaker #3: But there is investment we'll make to converge our brands, to converge the digital platforms, and to ensure we're actually building fulsome customer relationships.

Speaker #3: So that's all part of our business case, and when we really express the accretion that we think we'll still generate from this deal. But, Analysis, if you want to talk about a couple of the cost components to consider and how we're actually going to improve.

Speaker #2: Yeah, absolutely. Thanks, Gabe, for the question. I mean, our philosophy is that expenses need to move in line with revenues, and so we're targeting overall efficiency ratios, maintaining in that low-50s range.

Anilisa Sainani: Yeah, absolutely. Thanks, Gabe, for the question. Our philosophy is that expenses need to move in line with revenues, and so we are targeting an overall efficiency ratios maintaining in that low 50s range. Of course, loyalty linked credit cards have a higher overall expense base as we do that, but we will be really intentional around where we invest. We see the integration and the acquisition of PC Financial provide significant cross-selling opportunities, and that will take investment together with other areas of growth across the bank and continued innovation and building out capabilities. Overall expenses has been a very positive storyline. We have consistently delivered thoughtful expense management throughout the quarter, and we will continue to do that.

Speaker #2: Of course, loyalty-linked credit cards have a higher overall expense base as we do that. But we will be really intentional around where we invest.

Speaker #2: We see the integration and the acquisition of PC Financial provide significant cross-selling opportunities. That will take investment, together with other areas of growth across the bank, continued innovation, and building out capabilities.

Speaker #2: So overall, expenses have been a very positive storyline. We have consistently delivered thoughtful expense management throughout the quarter and will continue to do that.

Speaker #6: All right. And then as far as the credit performance goes in the mortgage book, maybe let's dissect the impaired PCL. Is that on newly impaired loans, or are we still seeing any, I'll call them, catch-up provisions on previously impaired ones? Because they're spending more time on the market, more maintenance costs, and all that.

Gabriel Dechaine: All right. Then as far as the credit performance goes in the mortgage book, maybe let us dissect the impaired PCL. Is that on newly impaired loans, or are we still seeing any, I will call them catch-up provisions on previously impaired ones because they are spending more time on the market, more maintenance costs and all that? Then, more broadly, are we still seeing the issues in the same regions or cities, whatever? Or is it broadening at all, the areas of softness?

Speaker #6: And then more broadly, are we still seeing the issues in the same regions or cities, or is it broadening at all?

Speaker #6: The areas of.

Chadwick Westlake: Well, I am going to turn to Puneesh Arora again. He shared some of that in his remarks, but I would say, Gabriel Dechaine, as well, we have been preparing for these types of scenarios, right, in our modeling. There is always judgment, there are models. We have been thinking through these types of scenarios, and that is why we mentioned there was more proactive build that we did. That is why you saw the performing build component. Do you want to talk a little bit about the single family from points for Gabe?

Speaker #3: Yeah, yeah, no. Well, I'm going to turn to finish again. You shared some of that in his remarks, but I'd say, Gabriel, as well, we've been preparing for these types of scenarios, right, in our modeling.

Speaker #3: There's always judgment; there's models. We've been thinking through these types of scenarios, and that's why we mentioned there was more proactive build that we did.

Speaker #3: That's why you saw the performing build component. But do you want to talk a little bit about the single families from some points for Gabe?

Speaker #1: Thanks, Chadwick. Our provisions remain concentrated in the shoulder vintages that we've spoken about in the past. These are particularly in the GTA, where property values have fallen and resolution times are taking longer.

Puneesh Arora: Thanks, Chadwick Westlake. Our provisions are remaining concentrated in the shoulder vintages that we have spoken in past. These are particularly in GTA, where property values have fallen and resolution times are taking more. By and large, it is in the same regions, and we have not seen the movement of these to any other regions.

Speaker #1: So by and large, it is in the same regions, and we have not seen the movement of these to any other regions.

Speaker #6: Right. And in the nature of the impaired, are the impaireds we saw this quarter on formations in the quarter, or are they any increases to previously impaired mortgages?

Gabriel Dechaine: Right. The nature of the impaired, are the impaired we saw this quarter on formations in the quarter or are they any increases to previously impaired mortgages?

Speaker #3: It was with both.

Chadwick Westlake: It was with both.

Puneesh Arora: It was with both.

Speaker #6: Both? Okay.

Gabriel Dechaine: Both? Okay.

Speaker #1: Yeah, it's with both.

Puneesh Arora: Yeah, it is with both.

Speaker #6: All right. Thank you.

Gabriel Dechaine: All right. Thank you.

Operator: The next question will be from Fernando Saldanha at TD Securities. Please go ahead.

Speaker #4: Quick question. We'll be hearing from Fernando Torralba at TD Securities. Please go ahead.

Speaker #7: Thank you. I just wanted to start off with PC Financial, and apologies if I missed this earlier, but is there anything you can give us on timing or magnitude of what you expect there in terms of ramping up and growing the retail deposits with the acquired business?

Fernando Saldanha: Thank you. I just wanted to start off with PC Financial, and apologies if I missed this earlier, but anything you can give us on timing or magnitude of what you expect there to ramp up in terms of growing the retail deposits with the acquired business?

Fernando Torrealba: Thank you. I just wanted to start off with PC Financial, and apologies if I missed this earlier, but anything you can give us on timing or magnitude of what you expect there to ramp up in terms of growing the retail deposits with the acquired business?

Speaker #3: Sure. Fernando, good morning. That's a great question. We're excited about quite a lot of growth from this business, and we saw some of that even in the first month, where I mentioned we saw growth in applications and growth right across the product shelf.

Chadwick Westlake: Sure, Fernando, good morning. It is a great question. We are excited about quite a lot of growth from this business, and we saw some of that even in the first month where I mentioned we saw growth in applications, growth right across the product shelf. We have a really concise strategy here, and I think Daniel runs this business now. I think, Daniel, do you want to share some comments on how we are going to grow deposits, but the overall business as well?

Speaker #3: We have a really concise strategy here. I think Daniel runs this business. Daniel, do you want to share some comments on how we're going to grow deposits, and the overall business as well?

Speaker #7: Yeah, thanks for the question, Fernando. I mean, the way we think about growth now as an integrated bank is, we think about growth from a customer perspective.

Daniel Rethazy: Yeah. Thanks for the question, Fernando. The way we think about growth now as an integrated bank is we think about growth from a customer perspective, and that will span across all the different product areas that we now support. Our strategy will be to look within the customer base that we have, look within the PC Optimum customer base, and think about how we can attract multi-product customers new to the bank, and also how we can take our existing customers and move them across products. So if it is card products into deposits and into GICs, and if it is core EQB deposit customers, moving them into the card products.

Speaker #7: And that'll span across all the different product areas that we now support. So our strategy will be to look within the customer base that we have, look within the PC Optimum customer base, and think about how we can attract multi-product customers new to the bank, and also how we can take our existing customers and move them across products.

Speaker #7: So, if it's card products, into deposits and into GICs. And if it's core EQ Bank deposit customers, moving them into the card products. Got it.

Fernando Saldanha: Got it. Thank you. That makes sense. Just to shift over a little bit into residential mortgage credit. One thing that stood out to me is delinquencies have been on a downtrend for the past couple of quarters, so that certainly is a positive, but new formations, they are either stable or up for the residential book. Just wondering why that is the case.

Fernando Torrealba: Got it. Thank you. That makes sense. Just to shift over a little bit into residential mortgage credit. One thing that stood out to me is delinquencies have been on a downtrend for the past couple of quarters, so that certainly is a positive, but new formations, they are either stable or up for the residential book. Just wondering why that is the case.

Speaker #7: Thank you. That makes sense. And then, just to shift over a little bit into residential mortgage credit, one thing is that ultimately delinquencies have been on a downtrend for the past couple of quarters.

Speaker #7: So, that certainly is a positive. But new formations—they are either stable or up for the residential book. Just wondering why that's the case.

Speaker #3: Go ahead, Vinicia.

Puneesh Arora: Go ahead, Binisha.

Chadwick Westlake: Go ahead, Binisha.

Speaker #1: Yeah, we have been looking at the models we have and decided to basically take a holistic approach on these ones. Models are showing both judgment and model-driven numbers.

Puneesh Arora: Yeah. We have looked at the models we have and decided to basically take an holistic approach on these ones. Models are showing both judgment and model-driven numbers, and we have incorporated this in the final provision that we have taken, and we are very comfortable with that number.

Speaker #1: And we have incorporated this in the final provision that we've taken, and we are very comfortable with that number.

Speaker #7: Sure. So, you're saying that the new formations—sorry, I'm not sure that I understood that. You're saying that the new formations reflect greater conservatism on existing loans, or is it that there are new loans that are becoming impaired as time goes by, even though the delinquencies are down?

Fernando Saldanha: Sorry. So you are saying that the new formations. Sorry, I am not sure that I understood that. You are saying that the new formations reflect a greater conservatism on existing loans, or is it that there is new loans that are becoming impaired as time goes by, even though the delinquencies are down?

Fernando Torrealba: Sorry. So you are saying that the new formations. Sorry, I am not sure that I understood that. You are saying that the new formations reflect a greater conservatism on existing loans, or is it that there is new loans that are becoming impaired as time goes by, even though the delinquencies are down?

Speaker #1: Yes, it's on both.

Puneesh Arora: Yes, it is on both.

Speaker #7: Okay, thank you. And then just maybe one last one. I also noticed that LTVs on originations—not the entire loan, but just on originations—they continue to climb.

Fernando Saldanha: Okay. Thank you. Then just maybe one last one. I also noticed that LTVs on originations, not the entire loan, but just on originations, they continue to climb. They are now at 71%. Just wondering how that affects your outlook for credit, because I would imagine if you want to be more conservative, wouldn't that mean that LTVs on newly originated mortgages should be down rather than up? Any color you can offer on that would be helpful. That is only insured mortgages I am referring to.

Fernando Torrealba: Okay. Thank you. Then just maybe one last one. I also noticed that LTVs on originations, not the entire loan, but just on originations, they continue to climb. They are now at 71%. Just wondering how that affects your outlook for credit, because I would imagine if you want to be more conservative, wouldn't that mean that LTVs on newly originated mortgages should be down rather than up? Any color you can offer on that would be helpful. That is only insured mortgages I am referring to.

Speaker #7: They're now at 71%. Just wondering how that affects your outlook for credit, because I would imagine if you want to be more conservative, wouldn't that mean that LTVs on newly originated mortgages should be down rather than up?

Speaker #7: Any color you can offer on that would be helpful. And that's only short mortgages I'm referring to.

Speaker #3: Yeah, it's Daniel here. I guess a couple of things I would say: nothing's changed in terms of our adjudication criteria for new mortgages.

Daniel Rethazy: Yeah, it is Daniel here. I guess a couple of things I would say is nothing has changed in terms of our adjudication criteria for new mortgages. Obviously, on the insured side, you do see higher LTV. That is the nature of the product. So we have reentered into the prime insured space, and so you will see higher LTV in those, but obviously offset by the fact that the clients have default insurance against it. But nothing on the uninsured side that would be outside of our historical approval criteria for new originations.

Speaker #3: I mean, obviously on the insured side, you do see higher LTV—that's the nature of the product. So we have re-entered into the prime insured space.

Speaker #3: And so you will see higher LTV in those, but obviously offset by the fact that the clients have default insurance against it. But nothing on the uninsured side that would be outside of our historical approval criteria for new originations.

Speaker #7: Okay, that's fair. Thank you very much.

Fernando Saldanha: Okay. That is fair. Thank you very much.

Fernando Torrealba: Okay. That is fair. Thank you very much.

Speaker #4: Next question. It's from Paul Holden at CIBC. Please go ahead.

Operator: Next question is from Paul Holden at CIBC. Please go ahead.

Speaker #8: Okay, thank you. So, first question is going back to the single-family residential mortgages. There are a number of questions on credit trends. I think the real question people are trying to get to is, have PCLs peaked here, or is there more to go?

Paul Holden: Okay. Thank you. First question is going back to the single-family residential mortgages, a number of questions on credit trends. I think the real question people are trying to get to is, have impaired PCLs peaked here, or is there more to go? If the answer is they've peaked or reached a plateau, what metrics would you point us to to support that argument?

Speaker #8: And if the answer is they've peaked or reached a plateau, what metrics would you point us to, to support that argument?

Speaker #3: Yeah, I think it's a great question. From my perspective, what we've done is we've looked at the comprehensive nature of our models, and at the quarter end we've included all the judgment and model outputs. Our view is that we are appropriately provided at the end, and we've taken several quarters of data in the lower delinquencies into the equation as well.

Puneesh Arora: Yeah, I think it's a great question. From my perspective, what we've done is we've looked at the comprehensive nature of our models. At the quarter end, we've included all the judgment and model outputs. Our view is that we are appropriately provided at the end, and we've taken several quarters of data and the lower delinquencies in the equation as well.

Speaker #8: Okay, so that answer is you believe they've peaked and you're now adequately provisioned? Okay.

Paul Holden: Okay. So that answer is you believe they've peaked and you're now adequately provisioned. Okay.

Speaker #3: More proactively provisioned for the current environment. I think what we're saying is there's still going to be uncertainty out there, but we've also proactively applied judgment to build the performing provisions given the current environment.

Chadwick Westlake: We're proactively provisioned for the current environment. I think what we're saying is there's still going to be uncertainty out there, but we proactively also apply judgment to build the performing provisions given the current environment. So we are comfortable with our provisioning, but that's an important part of the build that we made. It's that, you look at that 50 versus 30 basis points, right? That's a reflection of the proactive build.

Speaker #3: So we are comfortable with our provisioning, but that's an important part of the build that we made. And it's that you look at that 50 versus 30 basis points, right?

Speaker #3: That's a reflection of the proactive build.

Speaker #8: Understood. Okay, following up on that, is there anything you can point to in terms of the rate of change argument, right?

Paul Holden: Understand. Okay. Following up on that, anything you can point to just in terms of from a rate of change argument? The reason I am going to drill down on this is there is some conflicting type information I see, where you look at the delinquent but not yet impaired rates, and those are improving, and I think improved two quarters in a row. Again, sticking with

Speaker #8: The reason I'm going to drill down on this is that there's some conflicting type information I see, right, when you look at the delinquent but not yet impaired rates.

Speaker #8: And those are improving, and I think improved two quarters in a row. Again, sticking with single-family residential. Yet formations are up, and that's why I just want to drill down onto this.

Chadwick Westlake: Yeah

Paul Holden: single-family residential, yet formations are up. That is why I just want to drill down onto this. What should we be looking to to get confidence again, if we should get confidence, that the situation has stabilized? Or maybe we should take a view that, well, maybe it has not stabilized, maybe there is potential for impaired to continue to go up in the near term.

Speaker #8: What should we be looking to in order to get confidence again—if we should get confidence that the situation has stabilized, or maybe we should take a view that, well, maybe it hasn't stabilized?

Speaker #8: Maybe there is potential for 'impaired' to continue to go up in the near term.

Speaker #3: Yeah. Well, again, that's why we wouldn't say again, Paul, is we proactively built for a higher level of uncertainty. This has not spread past what we've talked about.

Chadwick Westlake: Well, again, what I would say again, Paul, is we proactively built for a higher level of uncertainty. This has not spread past what we talked about. We talked about these particular vintages for a period of time. I agree we have seen some great improving, stable to improving trends. Formations are slowing. That is always going to be one of your key indicators, right? The delinquencies and formations, whether they are slowing. So the days past due is down. That is another metric that we look at regularly, and that is improving as well. So I will keep reiterating. We have been proactive, given the economic environment, to do a further build. But the key indicators around formations, delinquency, days past due, those are all stable to improving. So that should be seen as an encouraging trend.

Speaker #3: We talked about these particular vintages for a period of time. I agree we've seen some great, stable-to-improving trends. Formations are slowing.

Speaker #3: So that's always going to be one of your key indicators, right? The delinquencies and formations—whether they're slowing, so the days past due is down.

Speaker #3: That's another metric that we look at regularly, and that's improving as well. So I'll keep reiterating, we've been proactive given the economic environment to do a further build, but the key indicators around formations, delinquency, days past due — those are all stable to improving.

Speaker #3: So that should be seen as an encouraging trend.

Speaker #8: Okay. Okay. All right, I'll leave that one alone. I want to go earlier in the call, because I do also think it's a really important question.

Paul Holden: Okay. All right. I will leave that one alone. I want to go back to another question that was asked earlier in the call, because I do also think it is a really important question, which is kind of on the timing at which you can actually start to pursue this growth strategy, right? So you kind of provide an overview of what the growth strategy is. But when should we expect this growth strategy to really kind of manifest? Does it take a year of integration before you can really start pushing growth through PC customers and PC cards or cards into existing EQB clients? Or maybe it goes faster than that. I guess that is what we are trying to suss out here. How long does it take before we can start seeing some of those results of the growth strategy?

Speaker #8: Which is kind of on the timing at which you can actually start to pursue this growth strategy, right? So you kind of provided an overview of what the growth strategy is, but when should we expect this growth strategy to really manifest?

Speaker #8: Does it take a year of integration before we can really start pushing growth through PC customers and PC cards, or cards into existing EQB clients, or maybe it goes faster than that?

Speaker #8: I guess that's what we're trying to suss out here. How long does it take before we can start seeing some of those results from the growth strategy?

Speaker #3: Yeah, for sure, Paul. It's an excellent question that we're happy to provide more context on with Daniel, because my short answer is they started day one.

Chadwick Westlake: Yeah, for sure, Paul. It's an excellent question that we're happy to provide more context on with Daniel, because my short answer is they started day one. Day one, we're seeing that. We really want to reinforce the excitement and the momentum that we have day one, and it's going to look a lot different day 100, day 365. There's a lot of excitement to share. Daniel, do you want to give a few components to that?

Speaker #3: Day one, we were seeing that. Now, we really want to reinforce the excitement and the momentum that we have on day one. And it's going to look a lot different on day 100, day 365.

Speaker #3: There's a lot of excitement to share. But Daniel, do you want to give a few components of that excitement?

Daniel Rethazy: Yeah. Thanks, Chadwick. You took my answer. It started day one in July. We went out very quickly after legal day one already to our EQ Bank customers with really attractive offers for the PC Mastercard, and we saw great results. We're going to continue to do this. Obviously, through integration, we're going to start bringing the platforms together, the technology together, the digital experiences together. We have a lot of work to do, of course, on physical branding and how we show up in our 6,000 locations across the country. That doesn't stop us from bringing value to the customers, our combined 4 million customers that we have today, and helping them both understand and be aware of our brands and our products.

Speaker #7: Yeah. Thanks, Chadwick. You took my answer. It started day one in July. So we went out very quickly after legal day one already to our EQ Bank customers with really attractive offers for the PC MasterCard.

Speaker #7: And we saw great results, and we're going to continue to do this. Obviously, through integration, we're going to start bringing the platforms together, the technology together, the digital experiences together.

Speaker #7: We have a lot of work to do, of course, on physical branding and how we show up in our 6,000 locations across the country.

Speaker #7: But that doesn't stop us from bringing value to the customers, or our combined four million customers that we have today, and helping them both understand and be aware of our brands and our products, but also start to take advantage of the great opportunities to do more business with us.

Chadwick Westlake: But also start to take advantage of the great opportunities to do more business with us. We have pop-up locations going up across the country. It's generating a ton of excitement right now. There is a lot going on. What I would look for from us is the continued momentum, both on how we're deepening relationships with our customers and also how we're bringing in new active customers into our bank. That'll be a key thing that we're focused on over the coming months. Yeah. The only part I'd re-underline, Paul, is that you don't have to wait for everything to converge to see that growth. That's what I don't want people to believe. We have a wonderful platform with PC Mastercard, PC Money Account, PC Insurance, the list goes on, and PC Optimum, 18 million members. All this comes together into our new ecosystem.

Daniel Rethazy: But also start to take advantage of the great opportunities to do more business with us. We have pop-up locations going up across the country. It's generating a ton of excitement right now. There is a lot going on. What I would look for from us is the continued momentum, both on how we're deepening relationships with our customers and also how we're bringing in new active customers into our bank. That'll be a key thing that we're focused on over the coming months.

Speaker #7: We have pop-up locations going up across the country. It's generating a ton of excitement right now, so there is a lot going on. The way—what I would look for from us is the continued momentum, both on how we're deepening relationships with our customers and also how we're bringing in new active customers into our bank.

Speaker #7: That'll be a key thing that we're focused on over the coming months.

Speaker #3: Yeah, the only part I'd re-emphasize, Paul, is that you don't have to wait for everything to converge to see that growth. That's what I don't want people to believe.

Chadwick Westlake: Yeah. The only part I'd re-underline, Paul, is that you don't have to wait for everything to converge to see that growth. That's what I don't want people to believe. We have a wonderful platform with PC Mastercard, PC Money Account, PC Insurance, the list goes on, and PC Optimum, 18 million members. All this comes together into our new ecosystem.

Speaker #3: We have a wonderful platform with PC MasterCard, PC Money Accounts, PC Insurance—the list goes on—and PC Optimum's 18 million members. All this comes together into our new ecosystem.

Speaker #3: The growth will simply expand further past that as we converge the platforms. But all the ingredients are there, and the accelerators are already moving.

Chadwick Westlake: The growth will simply expand further past that as we converge the platforms. All the ingredients are there, and the accelerator is already moving.

Speaker #8: Okay, the answer is clear now—and helpful. Thank you.

Paul Holden: Okay. The answer is clear now and helpful. Thank you.

Speaker #1: Next question will be from Darko Mihelic at RBC Capital Markets. Please go ahead.

Operator: Next question will be from Darko Mihelic at RBC Capital Markets. Please go ahead.

Speaker #4: Hi, thank you. Good morning. My question is for Phoenician. Nice to meet you over a conference call; I look forward to meeting you in person.

Darko Mihelic: Hi. Thank you. Good morning. My question is for Puneesh, and nice to meet you over a conference call. Look forward to meeting you in person. But typically it's been my experience that when we do get a new Chief Risk Officer, they typically do a deep dive and a review of the portfolio. I haven't heard you explicitly say you're doing it, but my question is sort of twofold along those lines. First is, are you indeed doing a deep dive on the portfolio? And then secondly, would it be reasonable to conclude that you might be able to finish this deep dive by year-end?

Speaker #4: But typically, it's been my experience that when we do get a new Chief Risk Officer, they typically do a deep dive and a review of the portfolios.

Speaker #4: So, I haven't heard you explicitly say you're doing it, but my question is, are you indeed doing a deep dive on the portfolio?

Speaker #4: And then, secondly, would it be reasonable to conclude that you might be able to finish this deep dive by year-end?

Speaker #3: You mean I would say that I've already done a deep dive. I've spent the first 45 days on the portfolio. We've looked at portfolios from various angles.

Puneesh Arora: I would say that I've already done deep diving. I've spent first 45 days on the portfolio. We've looked at portfolios from various angles. Where are the vulnerabilities? What are the models reflecting? What's happening on resolution times for us? What's happening in the LGD? So during this period, I would say I've taken all these factors into the equation. We have used both, reflected them in the models. And I would say we have also applied judgment, and that's a reason I'm fairly comfortable to highlight that the provisions that we have taken are appropriate. Having said this, there are a couple of other areas that I would spend time in Q4 and reflect. But overall, very comfortable with the number we have booked based on all the enhancements that I've done in my first 45 days.

Speaker #3: Where are the vulnerabilities? What are the models reflecting? What's happening on resolution times for us? What's happening in the LGDs? So, during this period, I would say I've taken all these factors into the equation.

Speaker #3: We have used both and reflected them in the models, and I would say we've also applied judgment. That's the reason I'm fairly comfortable highlighting that the provisions we have taken are appropriate.

Speaker #3: Having said this, there are a couple of other areas that I would spend time on in Q4 and reflect on, but overall, I'm very comfortable with the number we have booked based on all the enhancements that I've made in my first 45 days.

Speaker #4: Okay. And so, it's reasonable—I mean, what portfolios might still be up for a deeper dive, a little bit more of a review? Would I be correct in thinking it might be commercial equipment finance?

Darko Mihelic: Okay. What portfolios might still be up for a deeper dive, a little bit more of a review? Would I be correct in thinking it might be commercial equipment finance and that maybe

Speaker #4: And that may be, given the action you took today or this quarter with respect to mortgage-performing reserves, that that mortgage reserve is sort of a function of the deep dive there.

Puneesh Arora: It-

Darko Mihelic: Maybe given the action you took today or this quarter with respect to mortgage performing reserves, that that mortgage reserve is sort of a function of the deep dive there, and maybe commercial and equipment comes by year-end. Is that a reasonable thought process for me to go through?

Speaker #4: And maybe commercial and equipment comes by year-end. Is that a reasonable thought process for me to go through?

Speaker #3: No, I would say we've looked at—I would say I've looked at commercial, we've looked at equipment finance, and we have looked at SFR.

Puneesh Arora: No, I would say, I've looked at commercial, we've looked at equipment finance, and we have looked at SFR, where I mentioned that things that we will look in Q4 is in our scope and evolving nature of the macro environment and how do we reflect that in the equation. So from a deep dive perspective, we've looked at SFR, we've looked at commercial, we've looked at equipment financing business, and all aspects have been covered in the appropriate provisions that we've taken in the quarter.

Speaker #3: Where I mentioned that things we will look at in Q4 include the scope and evolving nature of the macro environment, and how we reflect that in the equation.

Speaker #3: So from my deep-dive perspective, we've looked at SFR, we've looked at commercial, and we've looked at the equipment financing business. All aspects have been covered in the appropriate provisions that we've taken in the quarter.

Speaker #4: Okay, thank you very much. I appreciate that.

Darko Mihelic: Okay. Thank you very much. Appreciate that.

Speaker #1: Next question will be from Mike Rizvanovich at Scotiabank. Please go ahead.

Operator: Next question will be from Mike Rizvanovic at Scotiabank. Please go ahead.

Speaker #4: Good morning. Chadwick, I just wanted to go back to your comment on, I think what you mentioned was the ROTC potentially moving from 10 to 11.

Mike Rizvanovic: Good morning. Chadwick, I just wanted to go back to your comment on, I think what you mentioned was the ROTCE potentially moving from 10 to 11, and then just by the differential, it sounds like ROE would move from 11 to. ROTCE moving towards 11, which means the ROE would probably move towards something north of 11. But just in the context of that guidance, I know it's just a loose sort of guidance, but are you just building in conservatism there? Because when I think about PCLs potentially normalizing and maybe we finally get some increased activity in the housing market, it's been anemic for so long. It seems like you could just potentially, if those things do happen, just blow right past that number. So I'm just wondering if that's a conservative bent on what you said earlier.

Speaker #4: And then just by the differential, it sounds like ROE would move from 11 to—sorry, ROTC moving towards 11, which means the ROE would probably move towards something north of 11.

Speaker #4: But just in the context of that guidance—I know it's just a loose sort of guidance—but are you just building in conservatism there?

Speaker #4: Because, when I think about PCLs potentially normalizing and maybe we finally get some increased activity in the housing market, it's been anemic for so long.

Speaker #4: It seems like you could just potentially, if those things do happen, just blow right past that number. So I'm just wondering if that's a conservative bent on what you said earlier.

Speaker #3: Yeah. So, as I said in my remarks, we're seeing expansion from Q3, and ROTC in the 12% range, right? So that's a range. There's always going to be seasonality with cars.

Chadwick Westlake: Yeah. I said on my remarks, so expansion from Q3 and ROTCE in the 12% range, right? So that's a range. There's always going to be seasonality with cards. There's going to be various factors. I wouldn't say conservatism is an accounting term, but we're being practical and thoughtful, applying our judgment in the current operating environment. It's enough said about what's happening today, right? In past days. That's why we were very proactive about that. But that is growth. We think we could pick up the pace more, yes, if geopolitical calms, and it can go the other way, too. But we're very comfortable with the provisioning and our momentum and that progress towards our ROTCE. And we'll share more at Q4, right, with the Investor Day in terms of what that looks like for next year.

Speaker #3: There are going to be various factors. I wouldn't say conservatism as an accounting term, but we're being practical and thoughtful, applying our judgment in the current operating environment.

Speaker #3: It's enough said about what's happening today, right? And in past days, that's why we were very proactive about that. But that is growth. We think we could pick up the pace more, yes, if geopolitical comes.

Speaker #3: And it can go the other way too. But we're very comfortable with the provisioning and our momentum, and that progress towards ROTC. And we'll share more at Q4, right, with the investor in terms of what that looks like for next year.

Speaker #3: But we're comfortable that it's going to continue to improve and go higher from here, in both ROE and ROTC.

Chadwick Westlake: But we're comfortable that it's going to continue to improve and go higher from here in ROE and ROTCE.

Speaker #4: Okay, I get it. Sorry, I misquoted the ROTC 12, which means ROE would be somewhere in that 11 range. Okay. And then just on the credit and interest rate mark, I just want to get your color on this.

Mike Rizvanovic: Okay. I get it. Sorry, I misquoted. The ROTCE 12, which means ROE would be somewhere in that 11 range. Okay. Just on the credit and interest rate mark, I just want to get your color on this. I know it is common practice that banks do leave this in adjusted numbers or core numbers. But in the case of EQB with this deal, because it is such a sizable transaction, it does seem to set up a dynamic where as that mark comes off into 2028, it just seems to set up a pretty tough comp year for 2028 versus 2027 in terms of the growth. Do you have any concerns on that? I am just wondering the rationale of leaving such a sizable amount in your core numbers, which looks like it will disappear in about seven or eight quarters.

Speaker #4: I know it's common practice that banks do leave this in adjusted numbers or core numbers, but in the case of EQB with this deal, because it is such a sizable transaction, it does seem to set up a dynamic where, as that mark comes off into 2028, it just seems to set up a pretty tough comp year for 2028 versus 2027 in terms of the growth.

Speaker #4: Do you have any concerns about that? I’m just wondering about the rationale for leaving such a sizable amount in your core numbers, which looks like it will disappear in about seven or eight quarters.

Speaker #2: Yeah. Thanks, Mike, for the question. We've included, on slide 24 of the earnings presentation, kind of a roadmap, if you will, to make sure that it's really clear and transparent.

Anilisa Sainani: Yeah. Thanks, Mike, for the question. We have included on slide 24 of the earnings presentation a roadmap, if you will, to make sure that it is really clear and transparent, the impact of those marks in quarter and also the impact of those marks in future quarters. The reality is those marks, the premium marks, they are a true reflection of the economics of the portfolio that we bought. It is no different than buying another bond at a premium or a discount, and we treat this exactly the same way. So there is real economic value in those, which is why they continue to impact the results. You are absolutely right that they do not last forever, but what happens effectively is that as the marks come down, we get really good momentum on our synergy targets.

Speaker #2: The impact of those marks in the quarter and also the impact of those marks in future quarters—the reality is those marks, the fair value marks—are a true reflection of the economics of the portfolio that we bought.

Speaker #2: It's no different than buying another bond at a premium or a discount, and we treat this exactly the same way. And so, there's real economic value in those, which is why they continue to impact the results.

Speaker #2: You're absolutely right that they don't last forever, but what happens, effectively, is that as the marks come down, we get really good momentum on our synergy targets.

Speaker #2: For example, our cost synergies—we've already achieved 50% of the $30 million two-year target that we set, and that continues to come in.

Anilisa Sainani: For example, our cost synergies, we have already achieved the 50% of the CAD 30 million two-year target that we set, and that continues to come in. We think about the cross-selling and the integration work that both Chadwick and Daniel have talked about this morning. So yes, it is quite a bit to earn through, but we have a lot of confidence and conviction in the deal thesis.

Speaker #2: We think about the cross-selling and the integration work that both Chadwick and Daniel have talked about this morning. And so yes, it is quite a bit to work through, but we have a lot of confidence and conviction in the deal thesis.

Speaker #4: Okay, appreciate the color. And then, just so I can sneak a quick one in for Puneesh: just in terms of the court backlog, that's been a bit of an issue for EQB in getting resolutions.

Mike Rizvanovic: Okay. Appreciate the color. Just if I can sneak a quick one in for Puneet, just in terms of the court backlog that has been a bit of an issue for EQB in getting resolutions. Has that started to improve at all?

Speaker #4: Has that started to improve at all?

Speaker #3: I can actually take that. It's Daniel. We look at this very closely on the collections side. I think I shared last quarter, we were seeing collections timelines starting to push into the 12 to 18 months for enforcement.

Daniel Rethazy: I can actually take that. It is Daniel. We look at this very closely on the collections side. I think I shared last quarter we were seeing collections timelines starting to push into the 12 to 18 months for enforcement. It is actually getting longer. We are now seeing some in the 18 to 24 months. It is national, it is across the country. I would highlight Quebec has been the most challenging. What I would have said last quarter, 12 to 18, is now starting to push 18 to 24. It continues to be a challenge from an enforcement standpoint.

Speaker #3: It's actually getting longer. We're now seeing some in the 18- to 24-month range. It's national—it's across the country. I would highlight that Quebec has been the most challenging.

Speaker #3: But what I would have said last quarter—12 to 18—is now starting to push 18 to 24. So it continues to be a challenge from an enforcement standpoint.

Speaker #4: Okay, that's helpful. Thanks for the color.

Mike Rizvanovic: Okay. It is helpful. Thanks for the color.

Speaker #3: Thanks, Mike.

Chadwick Westlake: Thanks, Mike.

Speaker #1: At this time, Mr. Westlake, we have no other questions registered. Please proceed.

Operator: At this time, Mr. Westlake, we have no other questions registered. Please proceed.

Speaker #3: Thank you. The best way to understand a business is to try the products and services. If you haven't yet, please consider applying for one of our new, leading suite of Mastercards so we can help you generate more PC Optimum points.

Chadwick Westlake: Thank you. The best way to understand a business is to try the products and services. If you haven't yet, please consider applying for one of our new leading suite of Mastercards, so we can help you generate more PC Optimum points. Try an EQ Bank account or PC Money Account. It's free, simple, and rewarding. Once you try, you'll see why hundreds of people are opening accounts by the day. There are so many great ways we can help you get ahead every day. We look forward to speaking with you again at our Q4 earnings call on 3 December. Have a great day.

Speaker #3: Try an EQ Bank account or a PC Money account. It's free, simple, and rewarding. Once you try it, you'll see why hundreds of people are opening accounts every day.

Speaker #3: There are so many great ways we can help you get ahead every day. We look forward to speaking with you again at our Q4 earnings call on December 3.

Speaker #3: Have a great day.

Speaker #1: Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your line.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your line.