By Stephanie Hughes
(Bloomberg) — EQB Inc.’s stock rose the most in more than a year after the Canadian lender agreed to buy the banking portfolio of the country’s largest supermarket chain.
Shares jumped as much as 11% in Toronto Thursday morning, its biggest intra-day advance since May 2024. The surge was enough to recoup a few months’ worth of losses, bringing the price back to where it was in late August. The stock traded at $96.33 as of 11:07 a.m.
EQB Wednesday said it would purchase President’s Choice Bank from Loblaw Cos. for an implied price of $800 million, mostly in shares. That gives Loblaw a stake of at least 17% in EQB, which could grow to as much as 25%.
The announcement overshadowed the bank’s sizable earnings miss. EQB earned $1.53 on an adjusted basis in its fiscal fourth quarter, falling short of the $1.99 expected in a Bloomberg survey of analysts. The bank set aside $137 million in credit-loss provisions for the fiscal year, above what most analysts expected as the lender took steps to prepare its personal and commercial portfolios for a weaker housing market and slower economic growth.
The PC Financial deal drew mixed reactions from Bay Street analysts, who weighed the revenue potential against the timing of the deal in a strained consumer environment.
The transaction is “a clear positive, as it certainly provides a compelling diversification play for EQB’s loan book and meaningfully shifts the top line toward fee-based revenue,” wrote Bank of Nova Scotia’s Mike Rizvanovic. BMO Capital Markets analyst Etienne Ricard also pointed to the “key upside” for EQB to expand its client base.
But TD Cowen analyst Graham Ryding noted that EQB would be issuing shares at a “relatively depressed level,” adding that the stock has tumbled 12% year-to-date, prior to Thursday’s gains. He added that PC Financial’s credit-card portfolio has grown by only 2% on average over the past three years, compounded annually.
EQB’s plan to expand its credit card business comes in a weaker stage of the consumer cycle. Retailer Canadian Tire Corp. reported a 7.2% net credit-card write-off rate during its third quarter, up from 6.9% a year earlier. The company also saw credit-card sales growth fall to 2.3% from 3.8% over the same period.
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Last modified: December 4, 2025