Shares of EQB, the parent company of Canada’s Equitable Bank, experienced a significant boost on Wednesday. This came after the company raised its earnings forecast for the year and increased its quarterly dividend by almost 3%, following a strong profit gain in the second quarter.
In morning trading, EQB’s shares rose by 6.5% to C$82.63, bringing their year-to-date advance to an impressive 46%.
During the second quarter, EQB recorded a net income of 130.9 million Canadian dollars ($98.6 million), or C$3.39 per share, compared to C$58.8 million, or C$1.67 per share, in the same period last year.
Adjusted earnings per share reached C$2.98, surpassing analysts’ mean expectation of C$2.58, according to a FactSet poll.
Net interest income for the quarter soared by 51% to C$251.7 million, and fees and other income surged by 84% to C$14.5 million. Additionally, the quarter included a gain of C$29.7 million on loans and investments, compared to a loss in the previous year.
EQB’s provision for credit losses rose to C$13 million, more than doubling last year’s C$5.2 million.
The company now anticipates a growth in per-share earnings between 18% and 22% for the year, higher than their initial expectation of 10% to 15%.
Furthermore, EQB declared a quarterly dividend of C$0.38 per share, a C$0.01 increase from the previous quarter.
Analyst Stephen Boland from Raymond James highlighted EQB’s diversified funding model and expanding retail deposit base as key factors contributing to the bank’s success, even as larger banks face pressure from rising deposit costs.
EQB is the parent company of Equitable Bank, one of Canada’s prominent financial institutions. With strong second-quarter results, EQB is positioned for continued growth and success in the market.