Equitable Group Inc. Reports First-Quarter Earnings and Hikes Dividend Income Investors 2016-08-16 05:23:30 Equitable Group Inc.EQ BankTSE:EQBEQB Equitable Group Inc. (TSE:EQB) reported earnings for the first quarter of 2016 and hiked its dividend again. Dividend Stocks https://www.incomeinvestors.com/wp-content/uploads/2016/06/Equitable-Group-Inc.-Reports-First-Quarter-Earnings-and-Hikes-Dividend-150x150.jpg

Equitable Group Inc. Reports First-Quarter Earnings and Hikes Dividend

Canadian financial services company Equitable Group Inc. (TSE:EQB) reported earnings and raised its dividend again. However, the highlight was actually one of its new initiatives.

On May 12, Equitable Group released its earnings for the first quarter of 2016. Net income slipped five percent year-over-year to $28.0 million, while diluted earnings per share dropped six percent to $1.71. (Source: “Equitable Group Reports First Quarter 2016 Results, Updates Investors on Successful Launch of EQ Bank and Increases Dividend,” Equitable Group Inc., May 12, 2016.)

However, the bottom line did not tell the whole story. In the first quarter, the bank’s mortgages under management surged 22% year-over-year to $17.7 billion. At the same time, originations increased 26% to a first-quarter record of $1.6 billion.

Part of the reason why financial results weren’t so great in the quarter was due to marketing investments supporting the launch of EQ Bank, the company’s new digital banking initiative.

EQ Bank was launched on January 14 with the first product being the “EQ Bank Savings Plus Account.” The account allows customers to pay bills, transfer money, and earn an interest rate of three percent. (Source: “Equitable Bank Launches EQ Bank,” Equitable Group Inc., January 14, 2016.)

So far, the company’s digital banking initiative has worked out great. By the end of the first quarter, the digital offering had attracted more than 17,000 customers and raised $794 million.

Moreover, Equitable Group also got a boost from its single family lending segment: “We substantially increased the Bank’s presence in Canada’s prime single family lending market, originated a first quarter record $674.0 million of alternative single family mortgages, and continued to outperform all of Canada’s Big Six in credit metrics,” said Equitable’s president and CEO, Andrew Moor. (Source: “Equitable Group Reports First Quarter 2016 Results, Updates Investors on Successful Launch of EQ Bank and Increases Dividend,” Equitable Group Inc., May 12, 2016.)

For income investors, the bank has good news. It announced a five-percent increase to its quarterly dividend to $0.21. That translates to an annual yield of approximately 1.48% based on Thursday’s closing price. Note that Equitable Group has increased its annual dividend for five consecutive years now.

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