The Global economic outlook in Q1 2025 has notably been affected by the tariff measures introduced by Donald Trump against Canada. However, despite these external challenges, Armada’s loan portfolio has shown impressive resilience, and has not been affected to date.


The Bank of Canada (BoC) had stimulated the economy by reducing its prime rate by 25 basis points at both the January and March meetings—bringing the total reduction for 2025 so far to 50 basis points; however, the BoC left the prime rate unchanged at its April meeting citing a need to wait for data. The BoC had previously lowered its prime rate by a total of 175 basis points in 2024, which means the prime rate has dropped a whopping 225 basis points since July 2023, when it stood at 7.20%. The bond market rates have decline in response.


Despite the broader economic slowdown, Armada’s performance in Q1 2025 has remained stable. Even though home sales activity has slowed, our margins over our targets are higher than normal. Although the gross portfolio yield is still exceeding 11%, interest rates on new loans funded have declined along with benchmark rates. To maintain a prudent approach amidst macroeconomic uncertainty, Armada’s Board of Directors has reduced the monthly dividend rate from 7.5% to 7.25% annualized.


Armada’s portfolio’s loan-to-value (LTV) is holding steady at 45%. Property values have declined, but we have been able to source replacement mortgages at similar LTV’s to last year. While increasing LOC utilization has been challenging, we remain focused on putting the funds to work. Our Q1 mortgage volume reached a record high, and we have grown to $60M in shareholder equity.


We’ve seen a continued reduction in delinquent accounts into 2025. There are currently only three files in legal proceedings, and we don’t expect any losses. While major banks have started raising their loan loss provisions, Armada currently is not in the position to necessitate further additions to potential losses at this time.


Finally, a big thank you to everyone who attended Armada’s 22nd Annual General Meeting via Zoom on May 27th. It was great to connect with you virtually, and we look forward to seeing you at future events.