Stephanie Hughes
(Bloomberg) — Shares of EQB Inc. posted their biggest gain in more than a year after the Bank of Canada agreed to buy the banking portfolio of the country’s largest supermarket chain.
Shares in Toronto were up 11% on Thursday morning, their biggest intraday gain since May 2024. The gain was enough to recoup several months of losses and bring prices back to levels seen at the end of August. As of 11:07 a.m., the stock was trading at $96.33
EQB said Wednesday it would acquire President’s Choice Bank from Loblaw Cos. for an implied price of $800 million, mostly in stock. This gives Loblaw a stake of at least 17% in EQB, which could increase to 25%.
The announcement masked a sharp decline in the bank’s earnings. EQB’s adjusted earnings in the fiscal fourth quarter were $1.53, below the $1.99 forecast in a Bloomberg survey of analysts. The bank set aside $137 million in credit loss provisions for the current fiscal year, higher than most analysts expected as it takes steps to prepare its personal and business portfolios for a weakening housing market and slower economic growth.
The PC Financial deal drew mixed reactions from Bay Street analysts, who weighed the revenue potential and timing of the deal amid tight spending.
The deal “is a clear positive as it certainly provides compelling diversification to EQB’s loan book and meaningfully shifts revenue toward fee-based revenue,” Bank of Nova Scotia’s Mike Rizvanovic wrote. BMO Capital Markets analyst Etienne Ricard also pointed to the “key advantage” of EQB’s expanded customer base.
But TD Cowen analyst Graham Ryding noted that EQB will issue shares at a “relatively subdued level”, adding that before Thursday’s rise, the stock had fallen 12% year to date. He added that PC Financial’s credit card portfolio has grown at a compound annual rate of only 2% over the past three years.
EQB’s plans to expand its credit card business come at a weak stage in the consumer cycle. Retailer Canadian Tire Corp. reported a net credit card charge-off rate of 7.2% in the third quarter, up from 6.9% in the same period last year. During the same period, the company’s credit card sales growth also dropped from 3.8% to 2.3%.
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Gains from Bloomberg deal eqb Loblaw Cos. acquires Mike Rizvanovic PC Financial
Last modified: December 4, 2025
