EQB is a buy following “fantastic” merger, this investor says

Kingwest & Company managing director Tim Regan told BNN Bloomberg’s Market Call on April 20 that EQB (EQB Stock Quote, Chart, News, Analysts, Financials TSX:EQB) remains a growth story in Canadian banking, pointing to its digital model and the December acquisition of PC Financial as key drivers of its next phase.

Regan said EQB built its franchise as a digital-first challenger bank, avoiding the branch-heavy cost structure of the Big Six while serving mortgage borrowers who met lending standards but did not fit neatly within the major banks’ underwriting boxes.

The investor said the PC Financial acquisition meaningfully expands that platform.

“It’s a fantastic merger,” Regan said. “If you look at all the synergies, it gives them a whole new platform, 600 ATMs. It’s a whole new company if you wanna look at that, but still with a good backdrop behind it, the digital banking backdrop.”

Asked how EQB can sustain growth as Canada’s digital banking landscape evolves, Regan said further acquisitions could remain part of the strategy, though the company first needs to integrate the PC deal.

“Acquisitions like this,” he said. “They have to get this really under their belt. But when you look at it, there are, I think, 14 million people who have PC cards. We all go to Shoppers or Loblaws, and they can now market to those people.”

EQB shares have gained 31.64% over the past 12 months and 81.58% over the past five years. Of the analysts covering the stock, four rate it “Buy,” four “Hold” and one “Sell,” with a consensus price target of $121.61.

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