EQB Inc Q2 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 funding side, what level of competition do you expect on deposit markets over the next few quarters, given that, on one hand, loan growth appears to be slowing, while on the other hand inflation pressures could be draining household savings. So how do you see those 2 dynamics interplay on the cost of deposits?

Question: Etienne Ricard - BMO Capital Markets Equity Research - Analyst : Chadwick, on one of your last points on the covered bonds and deposit notes. Given where spreads are today, how do you plan to scale issuances over the next year?

Question: Etienne Ricard - BMO Capital Markets Equity Research - Analyst : Okay. And lastly, just on your accumulation segment. How is demand for reverse mortgages holding up in a higher rate environment relative to a traditional mortgage? I mean, in other words, given the lack of scheduled repayments, how do you think about the reverse mortgage affordability when rates rise?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My first question was just on the originations in the quarter. It was a good number. Your key competitor also, I think had a pretty good number there. Just trying to get a sense from your side as to what was driving it? Was it just a matter of strong sales activity in the spring with the deals closing by quarter end? Or was there some market share gains from other direct competitors, maybe some people at the banks that were falling into your lap or alternatively some people on the mix side that are higher quality that you might have been able to get at a better rate because they might have been less appetite.

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And just my second question is, if we -- looking ahead here to 2023, if we see greater EPS growth pressure, let's say, we're in a more -- or a much softer housing market environment, loan losses are rising. Do you still stick with the dividend growth strategy given the payout ratio is still really low? Or is there a scenario where you might slow or even kind of halt the dividend growth? And I'm just trying to understand here if there's a reasonable scenario where you might deviate from what you've articulated on your dividend growth strategy over the next couple of years.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : First question, just on the NIM and the drivers quarter-over-quarter within compression, you guys are talking about in the MD&A, higher funding costs for prepayment, higher yields on that cash. So my first observation here is the net impact of these drivers seems likely to remain negative in

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Got it. Got it. And still on the NIM, I noticed that business mix, it had been a positive NIM driver for the past several quarter-over-quarter and year-to-date comparisons, but it's not a driver whatsoever in this quarter. And I was wondering if there is -- is there anything more to that given that conventional loans are still growing more -- far more rapidly than insured loans?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Okay. Shifting to the PCL guidance. My understanding is that it should be in line with that or consistent with Q2 levels. Is that guidance -- does that apply to each of the asset classes or just on the aggregate?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes, it was more on asset class perspective. Is that a comment on the aggregate business? Or just -- or does it also apply to each asset class? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2022 / 12:30PM, EQB.TO - Q2 2022 EQB Inc Earnings Call

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. And with the Concentra acquisition, I presume you have a little bit more insight as to the performance of that business than maybe what we can see in public filings. Are there any of Concentra's key performance metrics? Are they vastly different than at the time of the acquisition. For example, has growth been stronger, weaker? Same thing for NIMs, PCL, things along those lines.