Record Reenue, Strong Loan Growth, and Resilient Portfolio

• BCF is up 11% since our previous report. Sector outlook has improved since June, with multiples up 5% (10% YoY). Industry revenue growth is forecast at 4% in 2025 vs 1% in 2024, supported by falling rates, which historically benefit MICs and financials.
• We expect two additional BoC rate cuts over the next six months amid slowing GDP growth, elevated trade tensions, high unemployment, and easing inflation. While mortgage delinquencies remain a concern, falling rates should help mitigate risks. We anticipate a rebound in pre-sales, lower financing costs for developers, and higher transaction volumes for real estate lenders next year.
• With Q2 results beating forecasts, we are raising full-year revenue and EPS estimates. Stress tests indicate BCF can comfortably sustain its $0.80/share annual dividend.

Price and Volume (1-year)

 

	YTD	12M
BCF	8%	9%
TSXV	37%	52%

Portfolio Update

Mortgage advancements increased 46% YoY to $15M, the highest Q2 on record, while repayments rose 70% YoY

Mortgage receivables (net) declined 6% QoQ to $48M, as the MIC sold $6M of mortgages to a related party. Excluding this sale, receivables would have increased 5% QoQ

Most of the key portfolio metrics (presented below) remained largely unchanged. First mortgages were 99% vs a five-year average of 91%, with the portfolio remaining focused on AB and B.C

 

APPENDIX