Quarterly Results

Third Quarter 2017
Equitable Group Reports Record Third Quarter Results, Increases Common Share Dividend

TORONTO, Nov. 9, 2017 /CNW/ - Equitable Group Inc. (TSX: EQB and EQB.PR.C) ("Equitable" or the "Company") today reported financial results for the three and nine months ended September 30, 2017 and announced a common share dividend increase reflecting the solid performance of Equitable Bank (the "Bank"), its wholly owned subsidiary and Canada's Challenger Bank.

THIRD QUARTER HIGHLIGHTS

  • Net income was $37.9 million or 7% higher than in Q3 2016 and 3% lower than in the previous quarter
  • Diluted earnings per share were $2.21, 2% higher than in Q3 2016 despite the issuance of 809,585 common shares in December 2016 and $0.42 per share of costs associated with recent liquidity events
  • Return on Equity ("ROE") was 14.4% compared to 17.2% in the same period of 2016
  • Book value per common share was $62.25 at September 30, 2017 up by $10.53 per share or 20% from a year ago and up $2.27 or 4% from Q2 2017
  • Deposit principal was $10.5 billion at September 30, 2017, up 14% from a year ago and up 5% from the end of June

FIRST NINE MONTHS HIGHLIGHTS

  • Net income was $120.2 million and diluted earnings per share were $7.03, 24% and 19% higher than in the same period of 2016
  • ROE was 16.1% compared to 16.3% in the same period of 2016
  • Mortgages Under Management were $22.8 billion, compared to $19.9 billion a year ago, a 14% increase

Of note, liquidity management actions taken in the second quarter in response to funding market events reduced third quarter earnings by $0.42 per share.  During the second quarter, Equitable obtained a two-year, $2.0 billion secured backstop funding facility from a syndicate comprised of all six of Canada's largest banks and insured and securitized an $892 million portfolio of existing residential mortgages in order to protect the Bank during a period of funding market volatility.  Although these initiatives moderated EPS growth, they reduced the Bank's risk profile and contributed to its long-term stability.

DIVIDEND DECLARATIONS

The Board of Directors today declared a dividend of $0.25 per common share, payable on January 4, 2018 to common shareholders of record at the close of business December 15, 2017.  This represents a 14% increase over the dividend declared in November 2016 and a one cent or 4.2% increase over the dividend declared in August 2017.  In addition, the Board declared a quarterly dividend of $0.396875 per preferred share, payable on December 31, 2017 to preferred shareholders of record at the close of business December 15, 2017.

"Equitable's third quarter results reflected the Bank's strong fundamentals and disciplined, risk-managed approach to lending, as well as favourable market conditions," said Andrew Moor, President and Chief Executive Officer. "Having successfully navigated the funding market turbulence earlier this year, and capitalizing on competitive dynamics, we increased lending activity in the third quarter and added $740 million of Mortgages Under Management.  Of equal importance, deposits expanded by $500 million since June 30th, which is a strong expression of confidence in our institution and our challenger bank strategy.  We continue to lend prudently and actively monitor housing market trends, and will adjust our asset growth in response to market conditions if necessary as our primary focus remains, unquestionably, the safety of the Bank.  We ended the period with CET1 and Total Capital ratios that again well exceeded regulatory minimums, an improvement in our already strong long-term credit track record, and high levels of liquidity. This strength is reflected in our Board's decision to increase the common share dividend for the third time this year."

OPERATING HIGHLIGHTS

  • Single Family Lending mortgage principal at September 30, 2017 was a record $9.1 billion, up 20% from $7.5 billion a year ago. Third quarter originations were $1.1 billion, up 5% from a year ago and a new quarterly record.
  • Commercial Lending mortgage principal at September 30, 2017 was $2.9 billion, up 7% from $2.7 billion a year ago. Third quarter originations were $380 million, up 4% from a year ago.
  • Securitization Financing Mortgages Under Management at September 30, 2017 amounted to $10.8 billion, up 12% from $9.7 billion a year ago. Securitization Financing originations were $493 million in the third quarter of 2017, 33% lower than a year ago, primarily reflecting the impact that changes to mortgage insurance rules last fall had on Prime single-family originations.
  • Deposit principal outstanding amounted to $10.5 billion, up 14% from $9.2 billion a year ago and $0.5 billion or 5% since June 30, 2017.

Equitable's credit metrics reflect the high quality of the mortgage portfolio and remain in line with or favourable to the Bank's long-term levels. At September 30, 2017, net impaired mortgage assets were just 0.13% of total mortgage assets compared to 0.19% a year ago. The Bank's provision for credit losses amounted to $0.04 million, down three basis points as a percentage of average mortgage principal from September 30, 2016 and down one basis point from June 30, 2017.  This low level of provision reflects Equitable's consistently prudent risk management parameters and active monitoring processes, as well as the release of $0.9 million of provisions previously recorded on mortgages that were resolved during the quarter.

CAPITAL

Equitable Bank's Capital Ratios continue to exceed minimum regulatory standards and were above the levels of the other eight publicly listed Schedule I Canadian banks.  At September 30, 2017:

  • Common Equity Tier 1 Capital Ratio was 14.8%, surpassing the Basel III minimum of 7.0%, and up from last year's level of 13.4%.
  • Total Capital Ratio was 17.2%, well above the regulatory requirement of 10.5% and above last year's level of 16.2%.
  • Leverage Ratio was 5.3% and as such the Bank was fully compliant with the target that OSFI sets on a confidential, institution-by-institution basis.

STRATEGIC UPDATE

Equitable continues to deliver on its key strategic priorities and challenger bank vision. Among its recent strategic highlights, Equitable:

  • Expanded EQ Bank Savings Plus Account balances by $572 million or 56% from a year ago to $1.6 billion (and $278 million or 21% from last quarter) as more Canadians embraced the convenience, flexibility and value of this all-digital bank platform to achieve their savings goals.
  • Awarded 6th place in Financial IT's 2017 ranking of the top digital banks globally
  • Received Canada's Best Employer Platinum Award for 2018 by AON for the second consecutive year
  • Grew GIC balances by $1.0 billion or 15% from a year ago to $7.8 billion (and $110 million from the prior quarter), reflecting the breadth of its deposit broker network.
  • Continued to manage liquidity prudently in light of second quarter market events, and finished the third quarter with total liquid assets as a percentage of total assets of 7.2%, up from 5.7% a year ago but down from 7.9% in the second quarter of 2017 as funding market conditions continued to stabilize.
  • Achieved an industry-leading Efficiency Ratio of 37.4% in the third quarter compared to 37.0% a year ago.
  • Completed the majority of work for its IFRS9 program and remains on-track for a successful January 1, 2018 implementation.
  • Continued to advance efforts to migrate to the Advanced Internal Ratings Based ("AIRB") approach to capital and risk management and its risk modelling capabilities.

These strategies were successful and funding markets have recovered as evidenced by the Bank's deposit growth in the third quarter. In the third quarter, the aggregate costs of these strategies, net of the associated funding cost benefits, amounted to $0.42 per share. 

BUSINESS OUTLOOK

Equitable's strategies, including its disciplined approach to capital allocation, are designed to deliver value to shareholders and protect depositors. Asset quality remains high and the Bank's core lending markets continue to present meaningful growth opportunities.  In the fourth quarter and in 2018, management believes that the Bank's ROE will be slightly below the 5-year average of 17.8% due to the costs associated with successfully navigating through recent financial market disruptions. 

As management looks forward, there is significant market uncertainty given government policy initiatives including OSFI's revised B-20 Guideline coming into effect January 1, 2018.

"We believe these interventions will have a negative impact on single-family originations by removing the ability to lend to certain borrowers who would have met the previous underwriting standards," said Mr. Moor. "That said, it is difficult to fully assess B-20's impact until the market and our competitors assimilate these rules.  Overall, we are taking a cautious stance and having run several sensitivity analyses believe that B-20 will have a slightly negative impact on our financial performance in 2018 due to lower Alternative Single Family originations.  As a diversified lender, we also have the opportunity to deploy more capital into our Commercial business where opportunities are abundant at the moment. Overall, our very clear mandate remains achieving profitable growth for shareholders and protecting our depositors by judiciously managing risk and delivering great service to our customers and partners." 

As a result of continued emphasis on service quality, management expects that year-over-year growth of Mortgages under Management will be in the range of 10% to 12% in the final quarter of 2017 and 6% to 8% in 2018.  In Q4, Net Interest Income will likely increase at year-over-year rates in the 1% to 2% range as continued growth of the Bank's assets and pricing changes are partly offset by the costs associated with recent market disruptions.  Full year 2018 Net Interest Income growth rates are expected to rebound to the 8% to 10% range as some of the costs associated with funding market events in 2017 abate and pricing changes flow through the mortgage portfolio. The Bank's Efficiency Ratio in the fourth quarter of 2017 and in 2018 is expected to be in the high 30 percent range.

"The Bank's deposit balances have grown steadily since the middle of the second quarter and we believe that trend will continue," said Tim Wilson, Vice President and Chief Financial Officer. "As such, we are confident that our current sources of funding, including brokered term deposits and our EQ Bank platform, will be adequate to fund our asset growth in 2018. At the same time, we will continue to diversify and enhance our deposit-taking capabilities and product sets to strengthen our market position and further reduce our risk profile." 

A centerpiece of the Bank's strategy is the advancement of the EQ Bank digital platform.  Management is committed to launching new savings products and services over time and to increasing EQ Bank's customer base.  "In the coming months, we will add GICs to the EQ Bank platform to provide our customers with a more complete suite of high-value savings options that are easily accessible," said Mr. Moor. "We will also continue to invest in new services and products that we intend to launch in future periods.  Ongoing enhancements to our platform will be designed to keep EQ Bank at the forefront of digital banking."

In October 2017, the Bank applied to the Office of the Superintendent of Financial Institutions seeking the approval of the Minister of Finance (Canada) for letters patent incorporating a new trust subsidiary.  This initiative would further the Bank's ability to pursue asset diversification strategies and would create a new issuer of deposits that would be eligible for insurance through the Canada Deposit Insurance Corporation.

Management's complete business outlook can be found in Management's Discussion and Analysis for the three and nine months ended September 30, 2017 which is available on SEDAR and on Equitable's website.

CONFERENCE CALL AND WEBCAST

Equitable will hold its third quarter conference call and webcast at 10:00 a.m. ET Friday, November 10, 2017. To access the call live, please dial 647-427-7450 five minutes prior to the start time. The listen-only webcast with accompanying slides will be available at www.equitablebank.ca under Investor Relations. The call will be hosted by Andrew Moor, President and Chief Executive Officer.

A replay of the call will be available until Friday, November 17, 2017 and it can be accessed by dialing 416-849-0833 and entering passcode 84393964 followed by the number sign. Alternatively, the call will be archived on the Company's website for three months.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS









CONSOLIDATED BALANCE SHEETS (unaudited)

AS AT SEPTEMBER 30, 2017

With comparative figures as at December 31, 2016 and September 30, 2016

($ THOUSANDS)











September 30, 2017

December 31, 2016

September 30, 2016









Assets:








Cash and cash equivalents


$

724,314

$

444,179

$

383,788

Restricted cash



397,365


247,878


238,945

Securities purchased under reverse repurchase agreements



-


199,401


102,760

Investments



112,255


136,718


124,485

Mortgages receivable – Core Lending



11,921,274


10,678,452


10,199,787

Mortgages receivable – Securitization Financing



6,866,074


7,105,351


6,849,957

Securitization retained interests



102,715


88,782


87,262

Other assets



97,208


72,827


75,862



$

20,221,205

$

18,973,588

$

18,062,846









Liabilities and Shareholders' Equity








Liabilities:









Deposits


$

10,594,205

$

9,763,082

$

9,268,606


Securitization liabilities



7,730,776


7,762,632


7,258,672


Obligations under repurchase agreements                 



316,087


112,488


69,290


Deferred tax liabilities



31,869


38,771


37,763


Other liabilities



191,289


204,465


85,239


Bank facilities



193,654


50,000


398,909


Debentures



65,000


65,000


65,000




19,122,880


17,996,438


17,183,479









Shareholders' equity:









Preferred shares



72,557


72,557


72,557


Common shares



197,488


196,608


145,694


Contributed surplus



5,870


5,056


5,114


Retained earnings



830,976


725,912


688,867


Accumulated other comprehensive loss



(8,566)


(22,983)


(32,865)




1,098,325


977,150


879,367



$

20,221,205

$

18,973,588

$

18,062,846

















 

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2017

With comparative figures for the three and nine month periods ended September 30, 2016

($THOUSANDS, EXCEPT PER SHARE AMOUNTS)













Three months ended

Nine months ended



September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016











Interest income:











Mortgages – Core Lending


$

129,372

$

114,416

$

376,934

$

323,379


Mortgages – Securitization Financing



43,368


44,776


133,480


133,679


Investments



65


2,142


3,563


6,390


Other



4,296


1,087


7,339


3,366




177,101


162,421


521,316


466,814

Interest expense:











Deposits



54,004


47,229


150,815


136,973


Securitization liabilities



43,647


41,489


129,959


122,028


Bank facilities



6,536


1,926


9,027


3,532


Debentures



950


950


2,850


2,850




105,137


91,594


292,651


265,383

Net interest income



71,964


70,827


228,665


201,431

Provision for credit losses



40


1,243


1,156


1,575

Net interest income after provision for credit losses



71,924


69,584


227,509


199,856

Other income:











Fees and other income



7,492


3,873


22,149


10,831


Net (loss) gain on investments



(100)


(44)


(888)


703


Gains on securitization activities and income from











securitization retained interests



4,797


3,182


11,263


5,636




12,189


7,011


32,524


17,170

Net interest and other income



84,113


76,595


260,033


217,026

Non-interest expenses:











Compensation and benefits



16,495


15,574


49,385


45,417


Other



15,147


13,465


46,572


41,372




31,642


29,039


95,957


86,789

Income before income taxes



52,471


47,556


164,076


130,237

Income taxes:











Current



15,773


8,227


39,860


24,521


Deferred



(1,171)


4,099


4,045


9,064




14,602


12,326


43,905


33,585

Net income


$

37,869

$

35,230

$

120,171

$

96,652

Dividends on preferred shares



1,191


1,191


3,573


3,573

Net income available to common shareholders


$

36,678

$

34,039

$

116,598

$

93,079











Earnings per share:











Basic


$

2.23

$

2.19

$

7.08

$

5.98


Diluted


$

2.21

$

2.16

$

7.03

$

5.93

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2017

With comparative figures for the three and nine month periods ended September 30, 2016

($ THOUSANDS)











Three months ended

Nine months ended



September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016











Net income


$

37,869

$

35,230

$

120,171

$

96,652











Other comprehensive income – items that may be











reclassified subsequently to income:                  




















Available for sale investments:










Net unrealized gains (losses) from change in fair value



1,755


3,249


11,835


(1,206)

Reclassification of net losses (gains) to income



11


(174)


412


(1,075)




1,766


3,075


12,247


(2,281)

Income tax (expense) recovery



(469)


(816)


(3,221)


606




1,297


2,259


9,026


(1,675)











Cash flow hedges:










Net unrealized gains (losses) from change in fair value



3,501


1,096


5,333


(3,734)

Reclassification of net losses to income



758


703


2,086


2,486




4,259


1,799


7,419


(1,248)

Income tax (expense) recovery



(1,131)


(478)


(2,028)


331




3,128


1,321


5,391


(917)

Total other comprehensive income (loss)



4,425


3,580


14,417


(2,592)

Total comprehensive income


$

42,294

$

38,810

$

134,588

$

94,060


 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2017

With comparative figures for the three month period ended September 30, 2016

($ THOUSANDS)

























Accumulated other

comprehensive

income (loss)
















September 30, 2017


Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow hedges

Available

for sale investments


Total


Total



















Balance, beginning of period


$

72,557

$

197,439

$

5,594

$

798,253

$

(510)

$

(12,481)

$

(12,991)

$

1,060,852

Net income



-


-


-


37,869


-


-


-


37,869

Other comprehensive gain, net of tax



-


-


-


-


3,128


1,297


4,425


4,425

Exercise of stock options



-


40


-


-


-


-


-


40

Dividends:



















Preferred shares                                  



-


-


-


(1,191)


-


-


-


(1,191)


Common shares



-


-


-


(3,955)


-


-


-


(3,955)

Stock-based compensation



-


-


285


-


-


-


-


285

Transfer relating to the exercise of stock options



-


9


(9)


-


-


-


-


-

Balance, end of period


$

72,557

$

197,488

$

5,870

$

830,976

$

2,618

$

(11,184)

$

(8,566)

$

1,098,325















































Accumulated other

comprehensive

income (loss)



























September 30, 2016


Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow

hedges

Available

for sale investments


Total


Total



















Balance, beginning of period


$

72,557

$

144,615

$

5,099

$

658,098

$

(10,053)

$

(26,392)

$

(36,445)

$

843,924

Net income



-


-


-


35,230


-


-


-


35,230

Other comprehensive gain, net of tax



-


-


-


-


1,321


2,259


3,580


3,580

Issuance cost



-


-


-


-


-


-


-


-

Exercise of stock options



-


871


-


-


-


-


-


871

Dividends:



















Preferred shares



-


-


-


(1,191)


-


-


-


(1,191)


Common shares



-


-


-


(3,270)


-


-


-


(3,270)

Stock-based compensation



-


-


223


-


-


-


-


223

Transfer relating to the exercise of stock options



-


208


(208)


-


-


-


-


-

Balance, end of period


$

72,557

$

145,694

$

5,114

$

688,867

$

(8,732)

$

(24,133)

$

(32,865)

$

879,367

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2017

With comparative figures for the nine month period ended September 30, 2016

($ THOUSANDS)

























Accumulated other

comprehensive

income (loss)
















September 30, 2017


Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow hedges

Available

for sale investments


Total


Total



















Balance, beginning of period


$

72,557

$

196,608

$

5,056

$

725,912

$

(2,773)

$

(20,210)

$

(22,983)

$

977,150

Net income



-


-


-


120,171


-


-


-


120,171

Other comprehensive gain, net of tax



-


-


-


-


5,391


9,026


14,417


14,417

Exercise of stock options



-


737


-


-


-


-


-


737

Dividends:



















Preferred shares



-


-


-


(3,573)


-


-


-


(3,573)


Common shares



-


-


-


(11,534)


-


-


-


(11,534)

Stock-based compensation



-


-


957


-


-


-


-


957

Transfer relating to the exercise of stock options



-


143


(143)


-


-


-


-


-

Balance, end of period


$

72,557

$

197,488

$

5,870

$

830,976

$

2,618

$

(11,184)

$

(8,566)

$

1,098,325















































Accumulated other

comprehensive

income (loss)



September 30, 2016


Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow

hedges

Available

for sale investments


Total


Total



















Balance, beginning of period


$

72,557

$

143,690

$

4,706

$

605,436

$

(7,815)

$

(22,458)

$

(30,273)

$

796,116

Net income



-


-


-


96,652


-


-


-


96,652

Other comprehensive loss, net of tax



-


-


-


-


(917)


(1,675)


(2,592)


(2,592)

Exercise of stock options



-


1,615


-


-


-


-


-


1,615

Dividends:



















Preferred shares                            



-


-


-


(3,573)


-


-


-


(3,573)


Common shares



-


-


-


(9,648)


-


-


-


(9,648)

Stock-based compensation



-


-


797


-


-


-


-


797

Transfer relating to the exercise of stock options



-


389


(389)


-


-


-


-


-

Balance, end of period


$

72,557

$

145,694

$

5,114

$

688,867

$

(8,732)

$

(24,133)

$

(32,865)

$

879,367


 


CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2017

With comparative figures for the three and nine month periods ended September 30, 2016

($ THOUSANDS)







Three months ended

Nine months ended



September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

CASH FLOWS FROM OPERATING ACTIVITIES










Net income for the period


$

37,869

$

35,230

$

120,171

$

96,652

Adjustments for non-cash items in net income:











Financial instruments at fair value through income



640


(2,479)


1,989


(3,488)


Amortization of premiums/discount on investments



2,775


114


7,559


393


Amortization of capital assets and intangible costs



2,343


1,963


6,516


5,758


Provision for credit losses



40


1,243


1,156


1,575


Securitization gains



(2,504)


(2,505)


(8,791)


(6,018)


Net loss (gain) on sale or redemption of investments



100


44


888


(703)


Stock-based compensation



285


223


957


797


Income taxes



14,602


12,326


43,905


33,585

Changes in operating assets and liabilities:











Restricted cash



14,671


(88,254)


(149,487)


(130,957)


Securities purchased under reverse repurchase











agreements



-


48,146


199,401


(82,843)


Mortgages receivable, net of securitizations



(532,881)


(821,327)


(1,029,493)


(2,381,080)


Securitization retained interests



6,479


4,339


18,088


11,342


Other assets



6,849


(14,713)


(12,697)


(14,346)


Deposits



499,201


120,927


837,681


1,058,964


Securitization liabilities



(19,227)


450,708


(30,901)


1,149,236


Obligations under repurchase agreements



(112,898)


69,290


203,599


69,290


Bank facilities



51,839


228,909


143,654


163,130


Other liabilities



(37,099)


4,198


(28,381)


(13)


Income taxes paid



(10,709)


(2,885)


(48,330)


(14,339)

Cash flows (used)/from in operating activities



(77,625)


45,497


277,484


(43,065)

CASH FLOWS FROM FINANCING ACTIVITIES










Dividends paid on preferred shares



(1,191)


(1,191)


(3,573)


(3,573)

Dividends paid on common shares



(3,955)


(3,270)


(14,977)


(9,485)

Proceeds from issuance of common shares



40


871


737


1,614

Cash flows used in financing activities



(5,106)


(3,590)


(17,813)


(11,444)

CASH FLOWS FROM INVESTING ACTIVITIES










Purchase of investments



-


-


(40,462)


(6,783)

Proceeds on sale or redemption of investments



76


8,997


70,219


32,605

Net change in Canada Housing Trust re-investment accounts



12


15


239


64

Purchase of capital assets and system development costs



(4,508)


(3,368)


(9,532)


(10,955)

Cash flows (used)/from investing activities



(4,420)


5,644


20,464


14,931

Net (decrease)/increase  in cash and cash equivalents



(87,151)


47,551


280,135


(39,578)

Cash and cash equivalents, beginning of period



811,465


336,237


444,179


423,366

Cash and cash equivalents, end of period


$

724,314

$

383,788

$

724,314

$

383,788











Cash flows from operating activities include:










Interest received


$

174,746

$

162,889

$

520,521

$

463,336

Interest paid



(92,216)


(89,638)


(250,221)


(246,382)

Dividends received



1,112


1,604


3,571


5,705

 

ABOUT EQUITABLE GROUP INC.

Equitable Group Inc. is a growing Canadian financial services business that operates through its wholly-owned subsidiary, Equitable Bank. Equitable Bank, Canada's Challenger Bank, is the country's ninth largest independent Schedule I bank and offers a diverse suite of residential lending, commercial lending and savings solutions to Canadians. Through its proven branchless approach and customer service focus, Equitable Bank has grown to over $24 billion of Assets Under Management. EQ Bank, the digital banking arm of Equitable Bank, provides state-of-the-art digital banking services to more than 43,000 Canadians. Equitable Bank employs nearly 600 dedicated professionals across the country, and is a 2018 recipient of Canada's Best Employer Platinum Award, the highest bestowed by AON. For more information about Equitable Bank and its products, please visit equitablebank.ca.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements made by the Company in the sections of this news release including those entitled "Business Outlook", in other filings with Canadian securities regulators and in other communications include forward-looking statements within the meaning of applicable securities laws ("forward-looking statements"). These statements include, but are not limited to, statements about the Company's objectives, strategies and initiatives, financial result expectations and other statements made herein, whether with respect to the Company's businesses or the Canadian economy. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases which state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved." Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, the nature of our customers and rates of default, and competition as well as those factors discussed under the heading "Risk Management" in the Management's Discussion and Analysis and in the Company's documents filed on SEDAR at www.sedar.com. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate and liquidity conditions affecting the Company and the Canadian economy. Although the Company believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material assumptions are applied by the Company in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its mortgage business at current levels, a continuation of the current level of economic uncertainty that affects real estate market conditions, continued acceptance of its products in the marketplace, as well as no material changes in its operating cost structure and the current tax regime. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") FINANCIAL MEASURES

This news release references certain non-GAAP measures such as Return on Shareholders' Equity ("ROE"), book value per common share, Mortgages Under Management, Capital Ratios, Efficiency Ratio, and Assets Under Management that management believes provide useful information to investors regarding the Company's financial condition and results of operations. The "NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") FINANCIAL MEASURES" section of the Company's third quarter 2017 Management's Discussion and Analysis provides a detailed description of each non-GAAP measure and should be read in conjunction with this report. The Management's Discussion and Analysis also provides a reconciliation between all non-GAAP measures and the most directly comparable GAAP measure, where applicable. Readers are cautioned that non-GAAP measures do not have any standardized meaning, and therefore, may not be comparable to similar measures presented by other companies.

SOURCE Equitable Group Inc.

For further information: Andrew Moor, President and Chief Executive Officer, 416-515-7000; Tim Wilson, Vice President and Chief Financial Officer, 416-515-7000