{"id":10884,"date":"2025-02-27T19:46:51","date_gmt":"2025-02-27T19:46:51","guid":{"rendered":"https:\/\/finderica.com\/?p=10884"},"modified":"2025-02-27T19:46:51","modified_gmt":"2025-02-27T19:46:51","slug":"three-quarters-of-equitable-banks-uninsured-mortgages-to-renew-at-lower-rates-this-year","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=10884","title":{"rendered":"Three-quarters of Equitable Bank\u2019s uninsured mortgages to renew at lower rates this year"},"content":{"rendered":"
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President and CEO Andrew Moor said 74% of the bank\u2019s uninsured single-family mortgages set to renew this year will see rate relief, and that\u2019s based on no further changes to the Bank of Canada\u2018s policy rate. <\/p>\n

\u201cThat\u2019s the advantage of our relatively short duration book,\u201d Moor said on the lender\u2019s Q1 earnings call. <\/p>\n

He also said the results of the first quarter were \u201cencouraging,\u201d with originations in that portfolio up 23% compared to last year and 13% compared to last quarter.<\/p>\n

\u201cWe are seeing this trend continue,\u201d he said. \u201cOur single-family uninsured application volumes increased about 29% year-over-year in the first few weeks of February.\u201d<\/p>\n

Similarly, the Equitable\u2019s reverse mortgage portfolio is also seeing \u201ccontinued strength in demand,\u201d Moor added. <\/p>\n

\u201cWe see many opportunities to deploy capital to address the needs of Canada\u2019s growing population of retirees through our reverse mortgage and insurance lending lines,\u201d he noted. <\/p>\n

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

Asked if that\u2019s likely to continue to increase in coming quarters, Marlene Lenarduzzi, Chief Risk Officer, said this: \u201cI think with the provisions we provided so far, we feel are appropriate given everything that we know right now, and I think we\u2019re pretty confident that we\u2019re in good shape.\u201d<\/p>\n

Impaired loans within Equitable\u2019s personal lending portfolio increased by $11 million (+4% quarter-over-quarter) to $308.2 million, a slower addition compared to prior quarters. Additionally, $94 million of impaired loans were discharged or resolved during the quarter.<\/p>\n

Breakdown of loans under administration ($ billions)<\/h3>\n
\n
\"EQB<\/figure>\n<\/div>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/th>\nQ1 2025<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Net income (adjusted)<\/td>\n$116.2 million (+7% YoY)<\/td>\n<\/tr>\n
Earnings per share (adjusted)<\/td>\n$2.98 (+8%)<\/td>\n<\/tr>\n
Loans under management<\/td>\n$69.3B (+3%)<\/td>\n<\/tr>\n
Uninsured single-family alternative portfolio<\/td>\n$20.2B (+23%)<\/td>\n<\/tr>\n
Insured multi-unit portfolio<\/td>\n$27.5B (+30%)<\/td>\n<\/tr>\n
Net interest margin<\/td>\n2.07% (+6 bps)<\/td>\n<\/tr>\n
Net impaired loans (residential loans)<\/td>\n147 bps (vs. 94 bps in Q1 2024)<\/td>\n<\/tr>\n
Reverse mortgage loan portfolio<\/td>\n$2.3B (+47%)<\/td>\n<\/tr>\n
Avg. LTV of Equitable\u2019s uninsured residential portfolio<\/td>\n63%<\/td>\n<\/tr>\n
Provisions for credit losses \u2013 adjusted (PCLs)<\/td>\n$13.7M (+12%)<\/td>\n<\/tr>\n
CET1 ratio<\/td>\n14.1% (-0.1%)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>
Source: EQB Q1 investor presentation<\/em><\/figcaption><\/figure>\n

Notables from its earnings call<\/h2>\n

CEO Andrew Moor commented on the following topics during the company\u2019s earnings call:<\/p>\n