In this article, we will discuss a magnificent Canadian bank stock which is a buy-and-hold for the long term.
When most investors think about Canadian banking stocks, the spotlight typically shines on the Big Five. But sometimes, the most exciting opportunities come from players operating just outside the traditional banking mold. One such standout is EQB Inc. (TSX:EQB) — the parent company of Equitable Bank and its fully digital offshoot, EQ Bank.
Although EQB stock has slipped about 9% recently, its solid financial performance and long-term growth potential make it an intriguing pick for investors looking beyond the usual suspects.
Getting to Know EQB
EQB has carved out a strong position in Canada’s financial sector by focusing on digital-first banking and underrepresented market segments. This strategy has paid off. As of October 31, 2024, the company posted record annual revenue of over $1 billion for the first time, alongside net income of $438 million — highlighting a strong year of operational performance.
In its Q2 2025 results, EQB reported earnings per share of $2.31 — slightly below analyst forecasts of $2.68. However, revenue came in at $315.95 million, beating expectations. The modest earnings miss stemmed mainly from increased provisions for credit losses, particularly in equipment financing. In response, EQB has implemented measures to reduce risk exposure in that segment, showing prudent financial management.
Digital Growth Powerhouse
A major driver of EQB’s growth has been its digital platform, EQ Bank. Since its launch in 2016, the platform has seen remarkable adoption, offering Canadians attractive features like high-interest savings accounts with zero monthly fees. By the end of 2024, EQ Bank had grown its user base to over 513,000 customers, representing a 28% increase year over year. This digital momentum underscores EQB’s ability to align with modern consumer preferences for convenient, low-cost banking.
A Value Buy with Room to Run
Valuation-wise, EQB appears attractively priced. It trades at a price-to-earnings ratio of just 9.4 and a price-to-book ratio of 1.10, suggesting it may be undervalued compared to larger bank stocks. As of now, shares are trading at $91.79, giving the company a market cap of approximately $3.55 billion.
Income Potential Through Dividends
On top of its growth story, EQB is also rewarding shareholders. The company raised its common share dividend by 23% year over year, reflecting strong confidence in its financial footing. With a dividend yield of about 2.3%, EQB provides a steady income stream — not to mention potential for capital gains over the long haul. For a $10,000 investment, that’s around $230 in annual dividend income, with room to grow as payouts rise.
What’s Next for EQB
Looking forward, EQB is poised to benefit from several emerging trends in financial services. Its digital-first strategy is well-aligned with the rising demand for online and mobile banking. In addition, recent product launches — including the Notice Savings Account and a beta version of the EQ Bank Business Account — are expected to broaden its customer base and accelerate deposit growth.
The Takeaway
EQB might not carry the name recognition of Canada’s largest banks, but it’s making a big impact where it counts and is a magnificent Canadian bank stock which is a Buy-and-Hold for the long term. With rapid digital expansion, solid financials, and a shareholder-friendly approach, EQB stands out as a promising investment for those seeking long-term growth in the evolving banking landscape. The recent pullback in its stock price may just be the opportunity investors have been waiting for.
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