EQ Bank's headquarters in Toronto, Dec. 16, 2017.CHRIS HELGREN/Reuters
Equitable Bank EQB-T brands itself as “Canada’s challenger bank”—a friendly medium-size competitor to the Big Six, which hold more than 90% of the assets in the sector. The purely digital operation (it has no branches) has been very successful recently. Equitable has roughly doubled in size since 2018, and now has 1,800-plus employees and 670,000 customers.
Even so, the company’s affable CEO, 64-year-old Andrew Moor, says “it feels a bit more lonely, in some ways.” He used to think of HSBC Canada, Canadian Western Bank CWB-T and Laurentian Bank of Canada LB-T as mid-size peers, but this year RBC RY-T bought HSBC Canada, and National Bank NA-T bought CWB.
Moor thinks Equitable still has plenty of room to grow, however. “We’ve got 1% of the Canadian banking market,” he says. “To move to 2% would be doubling the size of the institution.”
That institution is certainly vastly different than when Moor was named CEO of Equitable Trust Co. in 2007. In 2013, Equitable became a Schedule 1 bank, and in 2016 it launched its purely digital EQ Bank. Four years later, Equitable bought Saskatoon-based Concentra Bank for $495 million. “We are truly a cross-Canada bank now,” Moor says.
However, he acknowledges that there are still gaps in Equitable’s product line. It has no wealth management offering or credit cards, for instance. “We haven’t cracked those two, but we will,” he says.
Over the past five years or so, Moor has also been a strong advocate for bringing so-called open banking to Canada. Basically, it transfers ownership of all of a customer’s financial data to them from individual institutions, which allows them to see their full financial profile in one place. The federal Finance Department first started exploring open banking in 2017, but progress is slow. Politicians often only respond fast to events, such as the proposed Big Bank mergers that Ottawa killed in 1998. “I think we really haven’t had a good conversation about the banking system in Canada since then,” Moor says.
And then there are the more obvious reasons for investing in the stock of EQB (the corporate parent): The shares have almost doubled in value since just before the COVID-19 pandemic. EQB’s 10-year total shareholder return of 285.6% is tops in Canada for a bank (although National is close) and one of the highest in North America.
But Moor tries not to pay too much attention to short-term fluctuations in EQB’s stock. “You don’t see our share price as you get off the elevator,” he says. That’s deliberate.
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