Investment Q&A

EPS of $0.28 beat estimates of $0.24 and sales of $31.58M beat estimates of $23.6M. Sales grew 21% year-over-year, and 9% sequentially, driven by growth in its digital banking operations, particularly the Receiveable Purchase Program (RPP) in North America. Its US digital banking operations grew significantly, driven by RPP expansion. From its prior quarter, we noted issues of a drop in net interest margin (NIM) and a higher costs from expansion and integration expenses, but in this quarter, VBNK noted a slight improvement against the prior quarter. 

Analyst estimates are trending slightly lower, and we think it has some near-term costs in the coming quarters which could weigh on earnings, but momentum has been improving slightly, and we think there is still long-term potential but investors may need to be patient here. We would be OK holding, but if one is looking for a stronger name in the Canadian financial space, we like GSY, PRL, EQB.