EQ Bank CEO says Canada needs to give smaller banks similar capital treatment

EQB

17/02/2026 17:10

By Nivedita Balu

TORONTO, Feb 17 (Reuters) - The CEO of EQ Bank said its parent company EQB EQB.TO is urging Canada's government to speed up changes to improve competition and give smaller banks similar capital treatment to big banks.

"Canada needs to compete with a greater sense of urgency to improve productivity, to evolve away from complacency. That need for competition is more significant and substantial than ever," EQB's CEO Chadwick Westlake said in an interview with Reuters.

Canada's financial sector is dominated by the country's big six banks. EQB, Canada's seventh-largest bank, stands to become one of the last publicly listed non-big six banks if Laurentian Bank LB.TO delists after it agreed to sell its assets, and Canadian Western Bank merged with National Bank NA.TO last year.

Prime Minister Mark Carney's 2025-2026 budget sought to improve competition in Canada's financial sector by lowering fees, making it easier for consumers to switch banks, reducing regulatory burdens for smaller lenders and launching open banking or consumer-driven banking.

The planned changes are not yet fully in place.

Smaller banks and fintech companies have pushed the government to change regulations to allow them to compete more fairly and make it easier for consumers to switch banks.

Canada's bank regulator, the Office of the Superintendent of Financial Institutions, said it calibrates capital requirements based on risk. A spokesperson said proposed revisions to capital adequacy requirements, including changes to certain sector-based exposure, are out for public comment and not yet final. Once final, implementation would be in the first quarter of 2027.

The head of the regulator has previously said it is looking at speeding up the process of issuing banking licenses to facilitate more competition from fintech companies and foreign players.

EQ Bank offers everyday banking services at lower fees as well as mortgages and other products, but is required to hold more capital per dollar of lending compared to the big banks, limiting some capital it could use to invest.

"Help us be visible. Help us make sure we have the things that we don't have yet, like the same capital treatment. If we get that, we can get more money into commercial, customers, small business owners and Canadians," Westlake said.

(Reporting by Nivedita Balu in Toronto; Editing by Will Dunham)

((Nivedita.Balu@thomsonreuters.com; X: @niveditabalu;))