Equitable Group Inc. is Canada’s financial services business, wholly owned by Equitable Group Inc.

Subsidiary, Equitable Bank. Equitable Bank is the ninth largest Schedule I bank and a Challenger bank in Canada.

The bank offers a wide range of residential and commercial real estate loan and savings solutions to over 250,000 Canadians, including self-borrowers and commercial real estate investors. The savings solutions offer security and attractive interest rates, including guaranteed investment certificates, high-interest savings accounts and payment slips.

The bank’s business can be broken down into single family loans, commercial loans, securitization finance, EQ Bank and brokered deposits. Equitable operates through a network of independent mortgage brokers and other business partners across Canada. The bank serves its customers from coast to coast through its branchless banking model and the customer-first approach.

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Investment data

Sales growth and market presence

With five decades of experience, Equitable Bank is known for its excellent customer service. The bank is attracting more customers through its innovative digital platform. EQ Bank is the digital banking arm of Equitable Bank, which provides digital banking services to more than 185,000 Canadians and has raised $ 4.6 billion in savings to date. The bank began diversifying into related businesses such as reverse mortgages and LoC with surrender value from 2018 through its commercial lending platform.

Equitable Bank has a reputation for offering competitive interest rates as both prime and alternative lenders, which positions it well to cope with the changing environment. The bank is known for its high quality assets, excellent credit-to-value ratios and loss percentages. Assets under management stood at $ 36 billion at year-end, doubling from five years ago.

It is mainly awarded in the large urban areas with tremendous demand for residential property and liquid property markets. Equitable Bank focused on providing liquidity to the insured mortgage loan market for both residential and multi-unit residential real estate and saw quality asset growth.

Over the years the bank has developed extensive partnerships with Canadian mortgage brokers and bankers, deposit brokers, investment dealers and financial planners. The group is focused on growth by expanding its reach, introducing new products and maintaining its position as the Canadian Challenger Bank.

Equitable has launched its latest challenger banking services such as EQ Bank Tax Free Savings Account, EQ Bank RSP Savings Account, and EQ Bank Joint Savings Account, all of which offer higher interest rates and no fees and are poised to create further growth opportunities in 2021.

The bank’s year-end loans under management were up 7% to $ 33.3 billion, and lending was also up 18% year-over-year. The CET1 rate was 14.6%. The bank’s new digital account openings increased 82% and deposits increased 71%. Around 24,500 new accounts were opened in the fourth quarter.


The Equitable Group has increased its dividend more than 20 times over the decade, increasing it by an average of 12% + per year. This Canadian dividend aristocrat currently has a modest dividend yield of ~ 1.1% and has a very low payout ratio of ~ 11% which means plenty of room for future growth.

The most recent dividend rose ~ 6%. Equitable has also increased its earnings by more than 13% CAGR over the past decade. The bank has strong capital and liquidity positions. Equitable expects dividend growth of 20-25% and EPS growth of 12-15% over the medium term.

Equitable Bank has successfully grown AUM, net income and dividends over the past five years. The book value per share has increased by 15% over the past ten years. Since 2009, the company has been focusing more on single-family homes, as these typically have a higher ROE than commercial mortgages.

Due to its branchless business model without a retail presence, the bank has a low fixed cost level and a flexible cost structure. This has resulted in the bank maintaining an industry-leading efficiency rate. The CET1 rate was 14.6 and thus above the management’s target range.

Equitable is in a good position to capitalize on growth opportunities and generate positive returns in all markets. The company has an integrated balance sheet and lends to a variety of categories of retail and commercial assets. The bank focuses on markets that are not well served by Canada’s larger financial institutions. Equitable’s diversified business in a wide range of secured real estate assets further reduces the risk profile.

The private and business customer business continues to offer high quality assets in diversified markets. The bank expects its retail customer business to grow by 20 to 30% and business customer business by 5 to 8% in 2021. Management expects earnings to grow due to Canada’s growing economy and stable real estate and demographics.

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The banking environment is very competitive. Equitable Bank competes with other banks, trusts, insurance companies and financial services companies. Some of their competitors are Home Capital Group, First National Financial Corp., MCAN Mortgage Corp., Atrium Mortgage Investment Corp. etc. The cost effectiveness of Equitable’s industry-less banking model is a compelling competitive advantage.

Bottom line

As the leading midsize bank in Canada, Equitable has the scale to make strategic investments, innovations and a better banking experience. Equitable Bank is strengthening its digital offering and using its capabilities to grow in adjacent markets.

The bank benefited from good business and strong market fundamentals. Equitable Bank should continue to grow its customer base due to a growing digital banking platform, new challenger banking services, and various personal and commercial banking offerings.

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