Tim Regan loves this Canadian bank stock

Kingwest & Company managing director Tim Regan said EQB (EQB Stock Quote, Chart, News, Analysts, Financials TSX:EQB) is increasingly well positioned to gain share as a digital-first challenger bank, citing the strategic impact of its acquisition of PC Financial.

EQB, a Canadian digital financial services company with $137-billion in combined assets under management and administration, operates Equitable Bank, the country’s seventh-largest bank by assets, and ACM Advisors, which specializes in alternative assets.

“They’re highly digitized and don’t rely on branches on every corner,” Regan said. “They’re among the best at online banking.”

Speaking on BNN Bloomberg’s Market Call on Feb. 3, Regan said EQB has navigated a difficult period marked by elevated loan-loss provisions and the unexpected passing of its CEO, but has emerged with a materially stronger growth platform.

“The big thing that’s happened with EQB is the PC Financial deal,” Regan said. “They now have access to a huge client base. Fourteen million people have PC Optimum cards, and EQB can cross-sell into that ecosystem.”

Regan said the transaction meaningfully broadens EQB’s product set beyond its traditional focus on deposits, mortgages and home equity lines of credit, adding credit cards and deepening customer relationships.

“That’s a big step for any financial company,” he said, adding that the expanded offering improves EQB’s ability to compete with Canada’s dominant banks.

He also pointed to EQB’s operating model as a key differentiator.

“They’re highly digitized and don’t rely on branches on every corner,” Regan said. “They’re among the best at online banking.”

EQB shares have gained about 2.4% over the past 12 months and nearly 64% over five years. Analysts covering the stock are split with three rating it “Buy,” five “Hold,” and one “Sell,” with a consensus price target of $105.11.

The shares closed Feb 4 at $111.53.

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