Equitable Group Inc Q1 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Etienne Ricard - BMO Capital Markets Equity Research - Analyst : On the 2022 guidance for flat net interest margin relative to 2021, EQ Bank was obviously an important contributor to this. But how do you plan to balance on one hand, optimizing your cost of funding, and on the other hand, continue attracting deposit inflows over the remainder of the year.

Question: Etienne Ricard - BMO Capital Markets Equity Research - Analyst : And that's a follow-up. Could you share your road map for EQ Bank in Quebec? And how do you think about potential deposit inflows in that province over the near to medium term?

Question: Etienne Ricard - BMO Capital Markets Equity Research - Analyst : Understood. And just lastly, on Equitable Connect, what improvement in efficiency for the mortgage application process are you expecting? And how do you anticipate your responsiveness with brokers to improve as a result?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My first question was just, you talked about wanting to increase the dividend in line with how you've talked about it beforehand. But just given where the share price is, are you thinking differently about how you're thinking about deploying excess capital towards the dividend instead of share buybacks?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And just my second question was, is there a type of scenario in terms of home price decline and employment rates, GDP, that sort of thing, that would have you hit the low end of your CET1 range, so at kind of like 13%? Or alternatively, like do you have what you might view as a harsh scenario? And what does that do to your capital base?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : My first question is on the macro assumptions and how they improved this quarter, and it seems to run contrast to what we saw at your closest peer and other even U.S. lenders, for example, where we're seeing some downgraded outlook. So I just want to get a little bit more clarity or how you're thinking about that. Was that improved outlook as of, let's say, March 31? And if we think about what's happened since then, it would make sense to see some of these forward-looking assumptions adjust in Q2? And maybe talk through some of the, I would say, management overlay capabilities you have to sort of work with those assumptions that are, I think, I would believe, are third party. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 11, 2022 / 12:30PM, EQB.TO - Q1 2022 Equitable Group Inc Earnings Call

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes. It's more building in, let's say, future risks to that outlook. And just seeing that even like the pessimistic view in the 2- to 5-year portion of that view improves. It just seems a bit counterintuitive given the last, let's say, 6 weeks since the end of the quarter, but I understand this is more as of March 31 as opposed to May 10, for example. The second question I had is around the unsecured funding. Obviously, one component of that 3-year nonrolling term is going to be to fund the Concentra deal. But I believe the $75 million revolving term loan is new. And most of that -- most of the proceeds from that term loan were used to funnel down to the regulated bank entity to support capital ratio. So can you talk about the decision to go down that path of unsecured at the holdco level? What's your capacity to do more of that to support growth as we move forward this year. And then any comments around capital constraints given this -- I guess, given the capital injection into the bank regulated entity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 11, 2022 / 12:30PM, EQB.TO - Q1 2022 Equitable Group Inc Earnings Call

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Great. And I mean, as you mentioned, Chadwick, I guess, the [$50 million] injection only added about 40 basis points. So still would have been within the target range. So was the decision to do this now to get the unsecured financing at some lower rates and funnel it through in a cheaper environment and just get it done today? And why only $50 million ? Why not maybe bump it up to 14% and some more down there. I guess, a little bit more details around the strategic thought around capital, especially given like the Concentra Bank and growth coming down the pipe too.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Of course. And the last question on that theme is the DRIP was announced in -- or I guess, within the quarter. What's your expectations on uptake and share issuance through the DRIP?