💵 EQB Redefines Challenger Banking in Canada with Agreement to Acquire PC Financial From Loblaw, Delivering Transformational Benefits for Canadians
Sunday, 07 December 2025 12:00.PM
- Creates one of Canada's largest loyalty-linked banking ecosystems with significant benefits for millions of Canadians.
- Expands the benefits of PC Optimum™ and will offer more ways for Canadians to earn rewards on their everyday banking.
- Cements EQB as the challenger in Canadian banking, servicing nearly 3.5 million Canadians with a scaled credit card portfolio and distribution across Loblaw banners.
- EQB will become the exclusive financial partner for the PC Optimum™ loyalty program through a long-term commercial agreement.
- Financially compelling transaction for EQB expected to be mid-single digit accretive to adjusted EPS in the first full year post-closing, with Loblaw becoming a significant minority shareholder of EQB. -
EQB Inc. and Loblaw Companies Limited announced today that they have entered into a definitive agreement pursuant to which EQB will acquire President's Choice Bank ("PC Bank"), PC® Financial Insurance Agency Inc., PC® Financial Insurance Brokers Inc. and certain other affiliated entities of PC Bank (collectively, "PC Financial") (the "Acquisition").
In connection with the closing of the Acquisition, EQB will enter into a long-term strategic relationship with Loblaw pursuant to a commercial agreement (the "Program Participation Agreement") to become the exclusive financial partner of the PC Optimum™ loyalty program (together with the Acquisition, the "Transaction"). The Transaction will unite two of Canada's most innovative banking brands, redefining the sector by delivering extraordinary value, products and services to Canadians.
EQB will acquire PC Financial for 1.15x book value at closing, excluding excess capital above a 13% CET1 ratio, for consideration estimated at $800 million, subject to adjustment pursuant to the terms of the Transaction Agreement. The consideration will be satisfied by the issuance to one or more subsidiaries of Loblaw of 7.2 million common shares of EQB, representing approximately 16% of EQB's issued and outstanding common shares as at the date hereof on a pro-forma basis, and the remainder in cash. In addition, prior to the closing of the transaction and subject to regulatory approval, Loblaw will release and receive approximately $500 million of excess capital and other value from PC Bank, for estimated total value of $1.3 billion to Loblaw. Pursuant to and subject to the terms of the Transaction Agreement, Loblaw will own a minimum of 17% of EQB's issued and outstanding common shares on closing of the Acquisition. Closing is expected to occur within calendar 2026, subject to customary closing conditions and regulatory approvals.
Pursuant to the Acquisition, EQB will acquire PC Financial's products and services, including the PC Mastercard™ portfolio – one of the largest and most recognizable credit card portfolios in Canada with more than two million active accounts. The Acquisition is expected to expand EQB's total customer base to nearly 3.5 million Canadians and add $5.8 billion in assets with more than $800 million in direct retail deposits.
"Today's announcement marks a new era for banking in Canada. By combining EQ Bank's exceptional digital platform and product shelf with PC Financial's spending solutions, distribution and expertise in loyalty, we're creating a better banking ecosystem for all Canadians that prioritizes innovation and value," said Chadwick Westlake, President and CEO, EQB. "Fueled by our combined digital strengths and new ways to connect with customers, this transaction offers a unique opportunity for Canada's Challenger Bank to redefine what Canadians should expect from their banks. We couldn't be more excited to bring challenger banking to more Canadians and look forward to welcoming Loblaw as a shareholder and valued long-term partner."
"This new relationship between EQB and Loblaw will yield significant benefits to our customers, and those of EQ Bank. PC Financial's products will be better positioned for long-term growth under EQB's ownership, while maintaining the high level of quality and care our customers expect," said Richard Dufresne, Chief Financial Officer of Loblaw. "Bringing together EQB's digital platform with PC Optimum's reach and personalization will bring more value and more rewards to Canadians."
Combination will unlock significant benefits for millions of Canadians
• The new relationship will create one of Canada's largest loyalty-linked banking ecosystems and one of Canada's largest digital banks by customers. The combined organization will provide end-to-end access to more products, services and, over time, more ways to earn rewards for nearly 3.5 million customers and more than 17 million active PC Optimum™ loyalty members.
• PC Financial customers will benefit from EQ Bank's digital platform, expertise and everyday banking products and services, including a broader suite of savings and registered accounts, with the intent to provide future offerings that address more holistic banking.
• EQ Bank customers will benefit from PC Financial's credit card offerings for an all-in-one daily banking experience, complemented by retail touchpoints at approximately 2,500 Loblaw stores, over 180 in-store banking pavilions and a 600+ ATM network across the country. Customers will also gain exclusive access to rewards as customers of the only bank in Canada that gives them the ability to earn PC Optimum™ points.
Provides immediate scale to drive deeper change in Canadian banking
• The Transaction will bring together two made-in-Canada brands to drive change in banking with a louder voice to champion consumer interests.
• The unified organization gains significant scale to advance a shared track record of delivering competitive banking services that cater to diverse, dynamic financial needs – including the no-fee, interest bearing accounts that EQ Bank and PC Financial pioneered.
• EQ Bank and PC Financial both have lean, digital-forward operating models, with the combined organization aiming to bring globally inspired innovation to the Canadian market faster than incumbent peers.
Transaction Highlights
The Transaction presents an attractive value creation opportunity for EQB with realizable revenue opportunities. EQB anticipates attractive annual run-rate cost synergies of $30 million (pre-tax) and estimates total one-time acquisition and integration costs of $105 million. At a 1.15x multiple of book and PC Financial's book value as of September 30, 2025, the implied purchase price is estimated to be $800 million.
Further, the Transaction is expected to be mid-single digit accretive to consensus adjusted EPS in the first full year post-closing and to enhance ROE. Equitable Bank, EQB's wholly owned subsidiary, expects to maintain its prudent strong capital structure and liquidity profile at close.
The two banks plan to transition PC Financial into EQB's digital EQ Bank brand over time. In the interim, both organizations will maintain the trusted and familiar EQ Bank and PC Financial brands. The PC Optimum™ program will continue to be owned and operated by Loblaw and the value of PC Optimum™ points remains unchanged. EQB will become the PC Optimum™ program's exclusive financial partner, pursuant to the Program Participation Agreement.
Transaction Agreements
Pursuant to the Transaction Agreement, EQB will acquire (i) all of the issued and outstanding common shares in the capital of PC Bank, together with its reinsurance vehicles, and (ii) all of the issued and outstanding common shares in the capital of PC Financial Insurance Broker Inc. and PC Financial Insurance Agency Inc.
The Transaction Agreement contains customary representations, warranties and covenants by Loblaw and EQB. Completion of the Acquisition is subject to certain conditions set forth in the Transaction Agreement, including, among others, receipt of approval from the Minister of Finance, clearance under the Competition Act (Canada) and execution and delivery of the Program Participation Agreement and an investor rights agreement.
The Transaction Agreement contains a termination right for Loblaw in connection with specified intervening events, including if the EQB board of directors announces a change of control transaction during the interim period. If the Transaction Agreement is terminated following an intervening event, then EQB will be required to pay to Loblaw a termination fee equal to $40 million.
EQB intends to finance the cash consideration with its current balance sheet resources. The Acquisition is not subject to any financing condition or contingency.
In connection with the closing of the Acquisition, EQB and Loblaw will enter into an investor rights agreement pursuant to which Loblaw will have board nomination rights, registration rights and pre-emptive rights, and will be subject to a four-year lock-up and a standstill restricting Loblaw and its affiliates from acquiring common shares of EQB if it would bring Loblaw's ownership above 25% of the issued and outstanding EQB common shares.
Pursuant to the terms and conditions of the Program Participation Agreement, EQB will be Loblaw's exclusive financial services loyalty partner and will receive access to Loblaw's national retail channels to market its financial services products, with an initial focus on credit cards and deposit accounts. The Program Participation Agreement has an initial 12-year term and will establish a joint governance framework to guide strategic priorities of the program. The Program Participation Agreement contains termination and other rights for each of Loblaw and EQB commensurate for such agreements.
SOURCE: EQB Inc.
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