Hello, and welcome to the Equitable Annual and Special Meeting of Shareholders. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you'll be deemed to consent to the recording, transfer, and use of same. If you disclose personal information of another person in today's meeting, you'll be deemed to represent and warrant to Computershare and the corporation that you first obtain all required consents for the disclosure, recording, transfer, and use of such personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to David LeGresley, Chair of the Board and a Director of Equitable Group. Mr. LeGresley, the floor is yours.
Good morning, everyone, and thank you for taking the time to join Equitable's 2022 Annual and Special Meeting of Shareholders. Before commencing with the formal agenda, Equitable wishes to acknowledge that it occupies offices on Turtle Island, a name that multiple indigenous nations gave to the land now known as North America. We gather together in land that is steeped in rich indigenous history, recognizing the enduring presence of First Nations, Inuit, and Métis people, and committing to the process of truth and reconciliation. My name's David LeGresley. I'm Chair of the Board and Director of Equitable Group, the parent company of Equitable Bank, and a fellow shareholder. Andrew Moor, our President and CEO, Chadwick Westlake, Senior Vice President and Chief Financial Officer, Michael Mignardi, the bank's Vice President and General Counsel, and Linda Dwyer, our Corporate Secretary, are also present.
In the event of a technical malfunction at my end, Andrew will step in to chair this virtual meeting. From the titles of those participating, I hope you can tell that shareholder engagement is vitally important to your board and the bank's executive leadership team. Engagement comes in many forms, and today it centers on an agenda that will see you vote on five key business items. In mid-June, we will also host an Institutional Investor Day, which is the natural forum to discuss business strategies in much more detail. That said, Andrew and I feel it is appropriate to provide a few high-level observations on the bank's progress. I will go first, and Andrew will provide his commentary after the formal business. This past year, Equitable successfully steered through an unusual economic environment featuring lockdowns but also resurgent economic activity.
Guided by its purpose, the bank delivered for all stakeholders, taking important steps to advance our unique and inclusive culture and investing in innovative services for our customers. For shareholders, Equitable capped a decade of industry-leading shareholder returns and ROE with 2021 earnings that were our best ever. Based on strong performance, we're also pleased to announce a 51% increase in our common share dividend in February, catching us up to where we had planned to be prior to the start of the pandemic and the period of industry restraint urged by our provincial regulator. More recently, we moved forward with another 4% increase for shareholders of record on June fifteenth. The results of 2021 demonstrate that management has once again done a great job balancing growth with risk. Risk is, of course, multifaceted and dynamic, and the bank challenges itself to respond thoughtfully.
A perfect example is the leading-edge work underway to address the risks of climate change through our strategies and activities. I encourage you to review our first-ever ESG report for information on our approach. In true challenger bank fashion, Equitable will continue to introduce exciting new products and then later this year, move to complete the acquisition of Concentra Bank following regulatory review and approvals. Your board was intimately involved as management assessed Concentra. From our vantage point as independent insiders, we are unanimous in saying that this combination will be good for all stakeholders. Since I last addressed the shareholders a year ago, I was pleased to see the capital markets start to review EQB as a more valuable stock with our price-to-book ratio reaching 1.5 times. Sadly, current global geopolitical events and the rise in domestic inflation seem to have caused a break in that trend.
Despite record results, our shares now trade closer to book value. With EQB's lengthy track record of industry-leading ROE and a decidedly positive outlook captured in our forward guidance, multiple expansion is something that seems entirely reasonable to the board if, as, and when the broader markets recover. On behalf of the board, I thank Andrew and his senior executive team for their engagement and effective leadership and recognize with gratitude the hard work and dedication of our workforce of over 1,200 challengers. The people of EQB are the difference-makers in our business, delivering the customer experience that is the hallmark of our challenger bank. To my fellow directors, thank you for your ongoing counsel and leadership. A special acknowledgment to Diane Giard, who's chosen not to stand for re-election this year.
We've really appreciated Diane's expertise and insights into Canadian banking, and we wish her all the best. To our many shareholders and customers, thank you for your ongoing confidence and for encouraging us to grow and prosper. We now begin the formal business of the meeting. In accordance with Equitable's bylaws, I, as Chair of the Board, will act as chair of this meeting, and Linda Dwyer, Equitable's Corporate Secretary, will act as secretary. I appoint Haseeb F. Akhtar of Computershare Investor Services, Inc. to act as scrutineer. I have received proof that notice has been duly given and that the meeting materials were mailed to shareholders in compliance with applicable securities rules and also made available through notice and access.
I've also been provided with a report from the scrutineer that states that over 60% of Equitable's common shares are represented by proxy at this meeting, confirming that a quorum is present. I therefore declare this meeting to be properly called and duly constituted for the transaction of business. To facilitate the introductions of motions, Equitable has asked that Linda Dwyer move and Michael Mignardi second the motions for shareholder consideration today. A simple majority of votes cast in person or by proxy is required to pass each of the matters to be voted on today, except for the special resolution approving the corporate name change. That matter requires an affirmative vote of 66 2/3% of the votes cast. The report from the scrutineer also confirms that the votes represented by proxy are sufficient to pass all matters to be voted on today.
As a result, and for efficiency, there will be no voting at this meeting unless a shareholder or proxy holder requests otherwise. A copy of the scrutineer's report with the tabulated results of the proxy vote will be available upon request after the meeting. I'll now proceed with the first item of business as set out in the notice of this meeting, which is to receive Equitable's 2021 consolidated financial statements and the auditor's report on those statements. Copies of the financial statements were mailed to registered shareholders and non-registered shareholders who requested them on April 11, 2022. The financial statements can also be found on our website at equitablebank.ca. I therefore declare Equitable's consolidated financial statements for the year ending December 31, 2021, together with the auditor's report on those statements, have been received. We will now proceed with the election of directors.
The board has fixed the number of directors to be elected at 10, and I confirm that all nominees are eligible for election. I call upon Linda to read the names of the nominees standing for election and to make the motion for their nomination.
Thank you, David. The nominees for election as directors are Michael Emery, Susan Ericksen, Kishore Kapoor, Yongah Kim, David LeGresley, Lynn McDonald, Andrew Moor, Rowan Saunders, Vincenza Sera, and Michael Strempel. I nominate each of these 10 individuals whose names appear in the management information circular to be elected as a director of Equitable until the close of the next annual meeting of shareholders or until their successors are elected or appointed.
Thank you, Linda. You'll find information about each of our director nominees on pages 19 through 23 of the management information circular. I now call upon Michael to second the motion.
Mr. Chair, I second the motion.
Thanks, Michael. I'm advised by our scrutineer that the number of shares represented by proxy to be cast in favor of each nominee standing for election is more than sufficient for me to declare, and I do, that the 10 director nominees have each been elected to serve as directors of Equitable until the next annual meeting of shareholders. The next item of business is the appointment of auditors. At the last annual meeting held in May 2021, shareholders reappointed the firm of KPMG LLP as Equitable's auditors for the 2021 financial year. The board has again recommended the appointment of KPMG LLP to be the auditors of the company until the close of the next annual meeting at a remuneration to be fixed by the directors. I now ask Linda to make this motion.
I move that KPMG LLP be appointed the auditors of Equitable until the close of the next annual meeting of shareholders at a remuneration to be fixed by the directors.
Thank you, Linda. Michael, would you please second the motion?
Mr. Chair, I second the motion.
Thank you, Michael. The report from our scrutineer states that the number of shares represented by proxy to be cast in favor of the appointment of KPMG as auditors is more than sufficient for me to declare, and I do, that KPMG LLP has been reappointed as the auditors of Equitable until the close of the next annual meeting of shareholders, and the directors are authorized to fix their remuneration. The next item of business today is the approval of the new Treasury Share Unit plan. This plan will allow the board to grant equity incentive awards with longer measurement and vesting periods, providing Equitable with the opportunity to attract and engage executives for a longer period consistent with the time horizons of our shareholders.
The TSU plan, including the reservation of 300,000 common shares for issuance under the plan, was approved by Equitable's board of directors on March 31, 2022, subject to shareholder approval and the approval of the Toronto Stock Exchange. A summary of the plan can be found on pages 14 to 16 of the management information circular, with the full plan text set out on pages 96 through 114. The resolution approving the TSU plan is set out on page 16 of the circular. I now ask Linda to make this motion.
I move that the resolution set out in the management information circular under the heading Approval of Treasury Share Unit Plan be passed.
Thank you, Linda. Michael, would you please second the motion?
Mr. Chair, I second the motion.
Thank you, Michael. The report from our scrutineer indicates that the number of shares represented by proxy to be cast in favor of the resolution approving the TSU plan is more than sufficient for me to declare, and I do, that the resolution is passed. The last item of business today concerns a special resolution to approve the change in the company's name from Equitable Group Inc. to EQB Inc. as part of an enterprise-wide rebranding strategy. Subject to both shareholder and regulatory approval, including that of the Toronto Stock Exchange, the board will be authorized at its discretion to file articles of amendment to effect the name change. The special resolution is set out on page 17 of the management information circular. I now ask Linda to make this motion.
Thank you, David. I move that the special resolution outlined in the management information circular under the heading Approval of Corporate Name Change be passed.
Thank you, Linda. Michael, would you please second the motion?
Mr. Chair, I second the motion.
Thank you, Michael. The report from our scrutineer indicates that the number of shares represented by proxy to be cast in favor of the special resolution approving the corporate name change is more than sufficient for me to declare, and I do, that the special resolution is passed. This concludes the formal business of the meeting. As I mentioned earlier, a copy of the scrutineer's report with the tabulated results of the proxy vote will be available upon request after the meeting. A detailed report with the final voting results, including the votes tabulated by the scrutineer at this meeting, will be available on SEDAR and posted to Equitable's website as soon as practical after the meeting. I now declare the formal part of the meeting terminated. A question and answer period lies ahead, and you may submit your questions using the messaging icons on your screen.
First, it's my pleasure to yield the virtual floor to Andrew. In doing so, I refer you to this slide and Equitable's caution regarding forward-looking statements. Andrew.
Thank you, David, and good morning, everyone. We very much appreciate your participation today. As David said in his opening remarks, shareholder engagement can take many forms. In just a few weeks, we will host EQB Investor Day, which we've designed to be our marquee engagement event of the year. On June thirteenth, we will dive into our value creation strategies, showcase our business lines and management team, and discuss the great future we have planned for Canada's Challenger Bank, our employees, customers, and shareholders. I encourage institutional shareholders and analysts to take part in the live event, which will be recorded and available for everyone to be following. Given the proximity of Investor Day and the fact that we reported the bank's Q1 financial results a week ago, our Q1 best. I will keep my remarks brief.
Equitable is a bank on the move, acting with purpose to drive change in Canadian banking to enrich people's lives. We've taken strides to create a more deeply diversified growth platform. We've done so in true challenger bank fashion by responding to customer preferences and trends in imaginative ways and allocating capital to achieve industry-leading ROE, our true north. As customers express their desire to do more banking on their smartphones, our digital bank team has introduced many new features and services. Among these is our EQ Bank US Dollar Account. It was conceived using our challenger bank thinking and transformed a service that at other banks can be cumbersome, opaque, and expensive for customers.
If you haven't opened a U.S. dollar account with us, I recommend doing so because it is easy, far cheaper than conventional alternatives, offers good interest rates on the U.S. funds held, and the digital means of funding it and transferring money around the world are fast and efficient. Speaking of fast and convenient, it's been possible to access your EQ Bank account without a password because of our facial recognition sign-in for several years. Now, we've made it even easier to open an account with informed artificial intelligence. This is the most recent manifestation of our challenger thinking, puts us well ahead of other digital platforms.
These are just two examples of actions taken to enhance our offerings, with more to follow later this year, including the launch of the EQ Bank payment card, allowing customers to use their funds to make e-commerce and in-store purchases along with cash withdrawals with no bank fees, attractive rewards, and a seamless experience. Our customer deposit growth, digital product usage, and customer satisfaction are the real markers of EQB's progress. We are proud to see EQ recognized by Forbes as a top bank in Canada in both 2022 and 2021. As Canada moves to an open banking environment with a modernized payment system, the value inherent in our digital platform only stands to grow along with its relevance to customers.
Initiatives to lower the bank's cost of funds, including the successful launch of our CAD 2 billion European legislative covered bond program and the expansion of our institutional deposit notes program, are also having their desired effect. Just this morning, we were able to tap the European bond market for EUR 300 million of covered bond funding, or around CAD 400 million. This funding will save us roughly CAD 2 million per year compared to the alternative rate and equivalent amount of funds in the brokered GIC market. On the lending side, EQB is expanding in a disciplined and diversified manner with emphasis on conventional assets, the earnings engine of the bank. In our personal bank segment, our alternative mortgage business commands the number one share in the market. We're not sitting still.
Here too, we are challenging the status quo by applying digital technologies to enhance the service we provide to mortgage brokers. Meanwhile, our nascent decumulation business is hitting stride by serving the retirement income needs of seniors through reverse mortgages and insurance lending. In Q1, our reverse mortgage portfolio was up 262% year-over-year, while the CSV loans grew 91%. This decumulation continued to claim the title of the fastest growing Equitable business. These challenger businesses cater to Canadians with different objectives, but in both cases, the markets are growing based on favorable trends, as is demand for EQB's solutions. Our conventional commercial bank lines are also on the move, and we are fueling growth through services to over 18,000 commercial customers. Beyond mortgage loans, our portfolio includes innovative commercial vehicle and equipment leasing solutions for small businesses.
Since acquiring Bennington Financial in 2019, we have been rewarded with compound annual leasing portfolio growth of 18.7% and ROE that exceeds the bank's North Star of 15%+. While EQB will continue to drive growth organically, Bennington Financial serves as proof of the bank's ability to successfully integrate an acquisition and work collaboratively with the acquired team to maximize value creation for customers and shareholders within EQB's lending standards. It bears noting that challenging the way banking is done does not extend to the serious business of credit adjudication. Here we lean in with all the traditional tools of the trade to protect our investments. As a result, our credit book is in great shape.
This is important at all times, but doubly so during the pandemic and now again, as the economy hits a point of reflection with higher inflation and rising interest rates, conditions not seen in Canada for many years. In fact, all the broad indicators of credit quality are in the best shape that I've seen since I started EQB in 2007. As you know, we've had a stellar credit track record over that period. We're not lulled into complacency by these metrics and continue to actively manage risks and be mindful that inflation and geopolitical disruptions can change things fast. Despite that warning, it's great to be in this position. Our agenda for the remainder of the year will feature a healthy mix of risk-managed organic growth pursuits and the integration of Concentra Bank.
The completion of this fully funded acquisition is expected in the second half of 2022, subject to regulatory approval, and will add scale to our existing business lines and complement our value creation potential. With strong board executive sponsorship, the integration will be thoughtful, risk managed, and effective. We will also move forward in all three areas of environmental, social, and governance. In 2021, ESG oversight was added to the mandate of the board's governance and nominating committee. Earlier this month, we released our first ESG report. It is modeled on recommendations made by the Task Force on Climate-Related Financial Disclosures, Sustainability Accounting Standards Board, and industry best practices. Reflecting our serious-minded approach, our Sustainalytics risk rating improved to 21.1. Our MSCI rating is double A, just one A below the top.
S&P Global Corporate Sustainability Assessment of EQB significantly improved year-over-year. Now we've measured and disclosed our scope one, two, and three GHG emissions portfolio, including financed emissions, a first for a scope one Canadian bank. We have much greater insight, which we'll use to tackle target setting, risk management, and governance over climate risks through updated climate strategy. I'm also pleased to note ongoing progress in the social area of the ESG, and I encourage you to review the ESG report for various metrics and details on how our team is building stronger, more supportive, and resilient communities inside EQB and outside. In closing, the bank is moving in the right direction and moving quickly. My thanks to all board members for keeping us grounded, challenging our thinking, and helping us to achieve true north performance.
Our employees receive my thanks in other company forums, but they also deserve public kudos for challenging and delivering this past year. Competition for talent is real, and I feel very fortunate that Canada's challenger bank has real talent on our side. Saying that, I look forward to introducing the broader executive team beyond me and Chadwick at Investor Day on June thirteenth, and together showcasing how EQB's approach will create valuable new services for customers and valuable new growth opportunities for our shareholders. Dave, that concludes my formal remarks.
Great. Thanks, Andrew. Now it's time for question period. If you wish to ask a question, please select the messaging icon on your screen and follow the instructions there. At our end, Michael will summarize your question and read aloud your name and, if applicable, the entity you represent. As we believe strongly in shareholder engagement, we will respond to as many questions as time permits. If your question has already been asked by another stakeholder and answered, we will move to the next question. We'll pause here to compile questions. Michael, any questions?
Yes, Mr. Chair, there appears to be one question, and I will read it exactly as it is written. "Now that EQ Bank appears to have diversified its source of funds, has management considered increasing its individual deposit limit from CAD 200,000 to CAD 1 million, at least, to increase the bank's deposits and to be competitive with other peer digital banks vying for high net worth c-
Yeah, thanks, David. I can address that question.
Yeah, go ahead, Andrew.
It's certainly something that we think about a lot. Just to be clear, we'd obviously love to be more supportive. Our whole raison d'être is to provide the services our customers need. The only challenge with having very large deposits from individual customers, particularly of demand deposits, is, you know, the potential liquidity risk that puts the bank in. We likely will move up those amounts that can be held by any one individual. I would say it's not gonna get to CAD 1 million, you know, quickly. There's a fairly complicated math that we do in our treasury teams to actually try and put some analytics around that risk and what it's worth for us. I certainly hear you.
You know, CAD 200,000 is a lot of money, but we know that for many investors, that's not enough. Clearly the interest rates that we provide are much more attractive than are available in the larger institutions. We've heard this question many times, and we will over time be addressing it in a positive way.
Great. Thanks, Andrew. Good answer. Michael, any other questions there?
Mr. Chairman, there are no further questions.
Okay. If there are no further questions, I will sign off saying thank you all for participating. Reminding you that our door is always open for shareholder engagement during the year. I wish everyone a great day. Thank you very much. Bye now.