Mr. Andrew Moor reports

EQUITABLE BANK REDUCES SIZE OF SECURED BACKSTOP FACILITY

Equitable Group Inc.'s wholly owned subsidiary, Equitable Bank, has reduced the size of its secured liquidity backstop facility to $850-million from $2.0-billion, effective June 25, 2018, as a result of successful measures taken to enhance its liquidity position and favourable financing market conditions.

Over the past year, Equitable has taken several actions to improve its already strong liquidity risk profile. Those actions have included increasing the size of its liquid asset portfolio, extending the average term of its guaranteed investment certificate (GIC) book, enhancing the functionality and brand of its EQ Bank platform, and reducing its exposure to more volatile brokered high interest savings accounts (HISAs).

"In light of strong, stable and growing demand for EQ Bank savings products, including our recently launched GICs, as well as other liquidity management activities over the past year, our decision to reduce the backstop facility is well justified," said Andrew Moor, president and chief executive officer. "Assuming the broader funding market continues to exhibit signs of stability over the next year, we will also consider whether a backstop of any size is a necessary adjunct to our operating model."

By reducing the size of the facility, Equitable will save approximately $1.4-million (six cents of earnings per share) of pretax standby fees each quarter through to the maturity of the backstop in June, 2019. The company will also write down $5.8-million (26 cents of EPS) of unamortized upfront costs associated with the $1.15-billion reduction in the current quarter. The writedown will then reduce pretax expenses by $1.4-million (six cents of EPS) per quarter through to the end of second quarter 2019, relative to what would have otherwise been recorded. The $2.8-million of total savings per quarter and the $5.8-million writedown will be reflected in the company's net interest income.

The terms and conditions of the facility are otherwise unchanged. Equitable has not drawn upon the facility and does not anticipate using it prior to its expiry on June 18, 2019. The original facility was put in place in June, 2017, in response to financing market disruption caused by a liquidity event at another financial institution. Equitable thanks all of the banks in the syndicate, which includes Bank of Montreal, CIBC, National Bank, Royal Bank of Canada, Scotiabank and Toronto-Dominion Bank for their continuing support of Equitable.

About Equitable Group Inc.

Equitable Group is a growing Canadian financial service business that operates through its wholly owned subsidiary, Equitable Bank. Equitable Bank, Canada's challenger bank, is the country's ninth-largest independent Schedule 1 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 $25-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 60,000 Canadians.

We seek Safe Harbor.