In a move set to reshape Canada's digital banking sector, EQB Inc. has announced a definitive agreement to acquire President's Choice Bank (PC Financial) from Loblaw Companies Limited for approximately $800 million. The transaction, announced December 3, 2025, will create one of Canada's largest loyalty-linked banking ecosystems, serving nearly 3.5 million Canadians and fundamentally altering the competitive dynamics of Canadian challenger banking.
Transaction Details: A Strategic $800M Acquisition
EQB will acquire PC Financial at 1.15x book value at closing, excluding excess capital above a 13% CET1 ratio. The consideration structure includes:
- 7.2 million common shares of EQB issued to Loblaw subsidiaries (representing approximately 16% of EQB's shares on a pro-forma basis)
- Remainder in cash, with total purchase price estimated at $800 million
- Loblaw to own minimum 17% of EQB's outstanding shares at closing
- Additional $500 million in excess capital and value to be released to Loblaw prior to closing
The transaction is expected to close within calendar 2026, subject to regulatory approvals and customary closing conditions.
Creating Canada's Largest Loyalty-Linked Banking Ecosystem
The acquisition's cornerstone is EQB's exclusive partnership with the PC Optimum™ loyalty program through a long-term commercial agreement. This strategic alliance will unite:
- Nearly 3.5 million banking customers across both platforms
- More than 17 million active PC Optimum™ loyalty members
- Over 2 million active PC Mastercard™ accounts – one of Canada's largest credit card portfolios
- $5.8 billion in assets with over $800 million in direct retail deposits
"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," said Chadwick Westlake, President and CEO of EQB.
What PC Financial Brings to the Table
The acquisition adds significant distribution infrastructure to EQB's digital-first model:
- Approximately 2,500 Loblaw store locations providing retail touchpoints
- Over 180 in-store banking pavilions for customer service
- 600+ ATM network across Canada
- Established credit card expertise with the PC Mastercard™ portfolio
- Deep loyalty program integration with PC Optimum™
Benefits for Canadian Banking Customers
For Existing PC Financial Customers
PC Financial's customer base will gain access to:
- EQ Bank's advanced digital banking platform
- Broader suite of savings and registered accounts (TFSAs, RRSPs, GICs)
- Enhanced everyday banking products and services
- Future offerings addressing more holistic banking needs
For EQ Bank Customers
EQ Bank's existing customers will benefit from:
- PC Financial's credit card portfolio for complete daily banking
- Physical touchpoints at Loblaw locations nationwide
- Exclusive ability to earn PC Optimum™ points – the only bank in Canada offering this feature
- Expanded ATM network access
Strategic Rationale: Scaling Challenger Banking
This transaction represents a defining moment for Canada's challenger banking movement. Key strategic advantages include:
Immediate Scale
The combined organization gains critical mass to compete more effectively with Canada's incumbent Big Five banks, advancing both brands' track records of delivering competitive, customer-centric banking services.
Cost Synergies and Financial Impact
- $30 million annual run-rate cost synergies (pre-tax)
- Mid-single digit accretive to consensus adjusted EPS in first full year post-closing
- Enhanced ROE with maintained strong capital structure
- Total one-time costs: $105 million for acquisition and integration
Operational Efficiency
Both EQ Bank and PC Financial operate lean, digital-forward models, positioning the combined entity to bring globally-inspired innovation to market faster than traditional competitors.
Brand Integration and Customer Experience
The integration will be methodical and customer-focused:
- Near-term: Both EQ Bank and PC Financial brands will be maintained during transition
- Long-term: PC Financial will transition into the digital EQ Bank brand
- PC Optimum™ program: Continues to be owned and operated by Loblaw with unchanged point values
- Exclusive partnership: EQB becomes sole financial partner for PC Optimum™
Canada's Evolving Digital Banking Landscape
This acquisition accelerates consolidation trends in Canadian digital banking. While Canada has seen steady growth in challenger banks and neobanks over recent years, the market has remained fragmented compared to other developed economies.
The EQB-PC Financial combination creates a formidable competitor with the scale necessary to drive meaningful change. With nearly 3.5 million customers and extensive physical distribution through Loblaw's network, the merged entity bridges the gap between pure digital banking and traditional branch-based services.
Regulatory Considerations and Timeline
The transaction requires:
- Regulatory approvals from relevant Canadian financial authorities
- Customary closing conditions
- Expected closing: Within calendar 2026
Given EQB's existing regulatory relationship with OSFI (Office of the Superintendent of Financial Institutions) and PC Financial's established banking operations, regulatory approval is anticipated, though the timeline will depend on regulatory review processes.
Implications pour le marché
For Competitors
This deal increases competitive pressure on both traditional banks and other digital challengers. The combination of:
- Loyalty program integration (unique in Canadian banking)
- Physical and digital distribution
- Scaled customer base
- Credit card portfolio strength
...creates a differentiated value proposition that competitors will need to address.
For Consumers
Increased competition typically benefits consumers through:
- More competitive rates and fees
- Enhanced product innovation
- Improved digital experiences
- Greater choice in banking providers
Perspectives d'avenir
The EQB-PC Financial transaction represents the most significant consolidation move in Canadian challenger banking to date. By combining digital banking expertise with loyalty program integration and physical distribution, the merged entity is positioned to redefine expectations for Canadian banking.
As the integration proceeds through 2026, the Canadian banking landscape will be watching closely to see how effectively EQB can realize synergies, maintain both customer bases, and deliver on the promise of "challenger banking at scale."
For millions of Canadians, this could mean a new era of banking that truly prioritizes innovation, value, and customer rewards – exactly what the challenger banking movement was designed to deliver.