As of December 4, 2025, EQ Bank – the digital arm of Equitable Bank and the flagship brand of EQB Inc. – is at a turning point. In less than 24 hours, the bank has:
- Announced a transformative deal to acquire PC Financial from Loblaw Companies Limited
- Reported a challenging but resilient set of fourth-quarter and full-year 2025 results
- Outlined a strategy that leans heavily on digital banking, loyalty programs, and small-business growth
Here’s a detailed look at the latest news, forecasts, and analysis – and what it could mean for savers, small-business owners and investors.
Key takeaways at a glance
- PC Financial deal: EQB will acquire PC Financial in a transaction valued at about $800 million, paid in cash and 7.2 million EQB shares, at 1.15x book value (excluding excess capital). Loblaw is expected to end up with at least 17% of EQB’s shares. [1]
- Loyalty-linked banking giant: The combination will create one of Canada’s largest loyalty-linked banking ecosystems, serving nearly 3.5 million banking customers and tapping into more than 17 million PC Optimum members. [2]
- EQ Bank’s growth: EQ Bank deposits are now $9.9 billion (+10% year over year) with 607,000 customers (+18% year over year), even as group earnings came under pressure. [3]
- Profitability under pressure: Adjusted diluted EPS fell 19% for the year, and adjusted net income dropped 19%, driven by higher provisions for credit losses and a $92 million pre-tax restructuring charge in Q4. [4]
- Business Banking push: EQ Bank launched a Business Banking platform offering 2.25% interest on deposits, no monthly fees, free everyday transactions and upcoming prepaid business cards, squarely targeting small-business pain points around fees and low interest. [5]
- Analyst sentiment: The stock (TSX: EQB) trades in the high‑$80s, below an average analyst target of about C$101.40. Most covering analysts rate it “Hold”, though at least one recent rating pegs it as a “Sell” with a C$90 target, underlining a cautious but not dire outlook. [6]
Who – and what – is EQ Bank in 2025?
EQ Bank is the direct‑to‑consumer digital banking platform of Equitable Bank, itself a wholly owned subsidiary of EQB Inc., now Canada’s seventh-largest bank by assets. [7]
The platform offers:
- Interest‑bearing everyday accounts that behave like chequing but pay high savings rates
- Notice savings accounts, registered accounts (TFSA, FHSA, RRSP savings), GICs
- A prepaid EQ Bank Card with no monthly fees, no FX markup on purchases and interest on balances at the same rate as the personal account [8]
EQ Bank has also become something of a brand story in its own right:
- In October 2025, Financial Times’ The Banker named EQ Bank the No. 1 bank in Canada and North America in its inaugural Top 50 Banking Brands list, highlighting its momentum and potential to grow market share. [9]
- Customers have consistently ranked EQ Bank among the top banks in Canada in Forbes’ World’s Best Banks survey since 2021. [10]
So even before this week’s news, EQ Bank was already positioned as Canada’s leading “challenger bank” – small compared with the Big 5, but punching above its weight in digital banking and deposits.
The PC Financial deal: building a loyalty‑powered challenger bank
Deal structure and price
On December 3, 2025, EQB and Loblaw announced a definitive agreement for EQB to acquire President’s Choice Bank and related PC Financial insurance entities. [11]
Key terms include:
- Purchase multiple: 1.15x PC Financial’s book value at closing (excluding capital above a 13% CET1 ratio)
- Headline value: Estimated $800 million purchase price
- Consideration:
- 7.2 million EQB common shares to Loblaw (about 16% of EQB’s pro‑forma share count)
- The remainder in cash
- Additional value for Loblaw: Around $500 million in excess capital and other value to be released from PC Bank prior to closing, bringing total value to roughly $1.3 billion for Loblaw. [12]
- Loblaw stake: Loblaw is expected to own at least 17% of EQB at closing, subject to a four‑year lock‑up and a standstill that caps its potential ownership at 25%. [13]
- Closing timeline: Targeted for calendar 2026, subject to Minister of Finance approval, Competition Act clearance and other customary conditions. [14]
What exactly is EQ Bank buying?
Under the transaction, EQB will acquire: [15]
- PC Mastercard portfolio – one of the largest credit card franchises in Canada, with over 2 million active accounts
- PC Financial’s insurance and other financial services entities
- More than $5.8 billion in assets and over $800 million in direct retail deposits
- Distribution via approximately 2,500 Loblaw stores, over 180 in‑store banking pavilions and a 600+ ATM network
This will:
- Expand EQB’s total banking customer base to nearly 3.5 million Canadians
- Create one of Canada’s biggest loyalty‑linked banking ecosystems, integrated with the PC Optimum program and its 17+ million active members [16]
Over time, PC Financial will be transitioned into the EQ Bank digital brand, although both brands will remain in market during the integration period. [17]
Exclusive PC Optimum partnership
Crucially, the deal also includes a long‑term Program Participation Agreement:
- EQB becomes the exclusive financial partner of PC Optimum, giving EQ Bank a privileged position in one of the country’s strongest retail loyalty ecosystems. [18]
- The initial term is 12 years, with joint governance to steer strategy. [19]
For consumers, that likely means:
- More ways to earn PC Optimum points on everyday banking – deposit accounts, cards, and potentially new financial products
- A tighter link between grocery, pharmacy, fuel and financial rewards (think: earning or boosting points through EQ Bank accounts and PC Mastercard usage)
While specific product changes haven’t been announced yet, EQB is positioning this as a chance to be the only bank in Canada where customers can earn PC Optimum points directly through their main banking relationship. [20]
Financial impact and integration risk
EQB expects the transaction to be: [21]
- Mid‑single digit accretive to consensus adjusted EPS in the first full year post‑closing
- Supported by about $30 million in annual pre‑tax cost synergies, at a projected $105 million one‑time integration and acquisition cost
- Neutral to capital strength: Equitable Bank expects to maintain prudent capital and liquidity at closing
Analysts and observers are broadly positive on the strategic logic – pairing EQ Bank’s deposit‑heavy, fee‑light model with PC Financial’s credit card and loyalty‑driven franchise – but they also flag clear risks:
- Integration complexity: EQB must blend two digital platforms, thousands of retail touchpoints, and a large card portfolio without disrupting customers.
- Credit risk: Absorbing a large card book adds exposure to consumer credit cycles at a time of macro uncertainty.
- Execution on synergies: The forecast cost savings and EPS accretion depend on tight execution; any delay or cost overrun would reduce the deal’s attractiveness.
Still, by locking in PC Optimum as an exclusive partner and leveraging Loblaw’s scale, EQ Bank is positioning itself as the go‑to digital bank for everyday spending and saving – an angle traditional incumbents may struggle to match quickly.
Fourth‑quarter and 2025 results: solid growth, softer profitability
EQB’s full‑year and Q4 numbers, released on December 3, 2025, paint a picture of strong franchise growth but pressured earnings. [22]
Headline financials
For the year ended October 31, 2025:
- Adjusted diluted EPS:
- Q4: $1.53, down 39% year over year
- Full year: $8.90, down 19% year over year
- Reported EPS:
- Q4: –$0.25 (a loss, driven by restructuring charges)
- Full year: $6.65
- Adjusted net income:
- Q4: $63.5 million, down 37%
- Full year: $354.2 million, down 19%
- Adjusted ROE:
- Q4: 7.5%
- Full year: 11.3%
- Adjusted revenue:
- Q4: $308.1 million, down 4% year over year
- Full year: roughly $1.26 billion, essentially flat year over year
- Net interest margin (adjusted): 2.07% for FY25, down 8 bps from 2024 [23]
The main drags:
- Higher loan‑loss provisions: Adjusted provisions for credit losses totalled $132 million, up from the prior year, reflecting a weaker housing market and macro uncertainty about GDP and unemployment. Net allowances rose to 41 bps of total loan assets (vs. 32 bps a year earlier). [24]
- Operating cost growth: Non‑interest expenses climbed, partly due to higher compensation, technology and marketing, and new head office premises. [25]
- Restructuring charge: In Q4, EQB recorded $92 million in pre‑tax restructuring, severance and impairment costs, stemming from a strategic cost‑cutting program announced in October. [26]
EQ Bank’s specific performance
Within that broad picture, EQ Bank itself continues to be a growth engine:
- Customers:607,000 at Q4, up 18% year over year and 4% quarter over quarter.
- Deposits: Nearly $10 billion (specifically $9.9 billion), up 10% year over year.
- Q4 growth: EQ Bank welcomed 21,000 new retail and business customers during the quarter. [27]
This builds on Q3, when:
- EQ Bank added 26,000 customers in the quarter, reaching 586,000 customers (+21% year over year).
- EQ Bank deposits hit $9.7 billion, the fastest sequential growth in several quarters. [28]
In other words: the digital platform is gaining traction, even as group profitability is squeezed by credit provisioning and costs.
The restructuring program: resetting the cost base
On October 22, 2025, EQB announced a strategic restructuring program that would: [29]
- Reduce its workforce by about 8%
- Streamline operations and focus investment on high‑return digital and challenger‑bank initiatives
- Generate a pre‑tax restructuring cost initially estimated at $85 million, later finalized at $92 million in Q4 (about $22.7 million in severance and $69.3 million in impairment of non‑operating assets)
The goal is to improve:
- Efficiency: Adjusted efficiency ratio in 2025 was 50.9%, up 5.7 percentage points from 2024, which management wants to bring down. [30]
- Operating leverage: By simplifying, EQB hopes revenue growth will outpace expense growth in 2026 and beyond.
CFO Anilisa Sainani has set three financial priorities for fiscal 2026: drive growth, manage expenses carefully, and maintain strong risk management, arguing that the restructuring and credit provisioning reset the foundation for those goals. [31]
Business Banking: EQ Bank’s big move into small business
New platform and features
In early October, EQ Bank launched its Business Banking platform, targeting small businesses and solopreneurs who are frustrated with fees and low‑interest accounts at traditional banks. [32]
Key features of the EQ Bank Business Account include:
- No monthly fees and no minimum balance requirements
- 2.25% interest on the entire balance – a big jump from the near‑zero rates still common on many business chequing accounts [33]
- Free everyday transactions, including:
- Interac e‑Transfers (50 outgoing, 100 incoming per month)
- EFTs
- Bill payments
- Mobile cheque deposits [34]
- Up to 10 sub‑accounts to separate funds for tax, payroll and expenses
- Business GICs with rates of up to 3.30–3.55%, depending on term [35]
- An upcoming prepaid Business Card with no annual fee and cash back on monthly spending over $10,000, aimed at high‑spend small firms. [36]
Why EQ Bank thinks it can win here
EQ Bank’s own solopreneur survey, released October 30, underscores the business case: [37]
- 54% of solopreneurs cited high or unexpected fees, low interest rates and low value as top banking pain points.
- 39% were dissatisfied with the level of advice and financial support they receive.
- Many operate with thin margins and limited emergency funds; about a third have no dedicated business emergency fund, and over half have taken on personal or business debt to get started.
EQ Bank’s response:
- A digital‑first platform to reduce time spent on admin, with online onboarding and self‑serve tools
- Higher interest rates to make idle cash work harder
- Dedicated, Canada‑based support available 7 days a week, countering the frustration of automated phone trees and limited branch hours. [38]
The new Business Banking platform ties directly into the Q4 disclosure that business customers contributed to EQ Bank deposit growth and that the platform has been “enthusiastically received” by early adopters. [39]
Everyday banking and the EQ Bank Card: “Prepaid 3.0”
EQ Bank’s Personal Account remains its anchor product, marketed as an account that “acts like chequing, earns like savings”: [40]
- Base rate: 1.00%
- Bonus interest: 1.75% when customers direct deposit their pay, for a combined 2.75% rate as of November 27, 2025. [41]
- No monthly fees, no minimum balance, free Interac e‑Transfers and free ATM withdrawals in Canada (with fee reimbursement). [42]
The EQ Bank Card, a prepaid Mastercard, sits on top of the account:
- Earns the same interest rate as the Personal Account on loaded funds
- No FX markup on purchases abroad (only Mastercard’s standard exchange rate applies)
- No monthly or annual fees, and no EQ Bank fees for ATM withdrawals (with reimbursement for domestic ATM fees) [43]
By October 2025, EQ Bank reported that the card had surpassed $1 billion in funds loaded, with strong uptake for both domestic and international spending – evidence that Canadians are increasingly comfortable using a prepaid product as their primary travel and everyday card. [44]
This “Prepaid 3.0” approach – blending a high‑interest account with a no‑FX card – is a template EQ Bank is likely to extend to its upcoming Business Card and, longer term, into the PC Financial integration.
Policy backdrop: Open banking and competition tailwinds
On November 5, 2025, Equitable Bank publicly welcomed the federal government’s Budget 2025 measures aimed at increasing competition and enabling consumer‑driven (open) banking. [45]
The bank specifically highlighted:
- Consumer‑driven banking frameworks
- Payments modernization
- Stablecoin and digital asset regulation
- Updated data‑sharing standards
EQ Bank argues that these reforms will:
- Make it easier for Canadians to switch banks and share data securely
- Improve fee transparency
- Reduce barriers for challenger banks that rely on digital channels rather than branch networks
Given EQ Bank’s purely digital model – and its new scale ambitions via PC Financial – the policy trend towards open banking is a clear tailwind, though much depends on how quickly and effectively regulations are implemented.
Leadership changes: navigating a year of transition
2025 has also been an emotionally and operationally challenging year for EQB’s leadership:
- On June 24, 2025, long-time CEO Andrew Moor – widely credited with transforming Equitable Bank into Canada’s leading challenger bank – died unexpectedly at 65. [46]
- Chief Risk Officer Marlene Lenarduzzi became interim CEO. [47]
- On July 9, 2025, EQB announced that former CFO Chadwick Westlake would return as President and CEO, effective August 25, 2025, following a multi‑year succession plan. [48]
Westlake is now the face of EQ Bank’s transformation, linking:
- Cost‑cutting and restructuring
- The Business Banking push
- The PC Financial acquisition and PC Optimum partnership
In the Q4 release, he described 2025 as a “difficult year”, but framed the restructuring and acquisition as the foundation for “better efficiency, operating leverage and ROE” going forward. [49]
Investor and analyst reaction: cautious optimism
EQB’s stock (TSX: EQB) has been volatile through 2025:
- After the Q3 2025 earnings miss, shares dropped almost 10% in a single session, closing around $91.66 versus a previous close above $101, as EPS and revenue came in below forecasts. [50]
- By early December, the stock was trading in the high‑$80s, with historical pricing data showing closes around $86–87 in recent sessions. [51]
Analyst commentary is mixed but leans toward neutral / cautiously optimistic:
- MarketBeat reports that research firm Veritas recently upgraded EQB to a “Hold” rating. Across the street, there are 2 Buy and 9 Hold ratings, with an average price target of about C$101.40 – implying upside from current levels but less than in prior years, as several firms cut their targets this fall. [52]
- A TipRanks summary notes that the most recent individual analyst rating is a “Sell” with a C$90 target, reflecting concern about execution risk and near‑term earnings pressure, even as technical indicators overall sit at “Hold.” [53]
Investor concerns centre on:
- Margin pressure in a high‑rate environment
- Rising credit provisions, particularly in real‑estate‑linked portfolios
- The cost and complexity of integrating PC Financial
- Execution of the restructuring program and efficiency improvements
But the investment case for EQ Bank’s parent is increasingly framed as:
- A profitable, capital‑rich lender with a growing digital franchise
- A unique loyalty + digital banking play once PC Financial is integrated
- A stock trading at a single‑digit P/E and below consensus target, offering potential long‑term value if management delivers on its plan [54]
(Nothing in this article constitutes investment advice. Investors should do their own research or consult a registered adviser.)
What this means for Canadian savers and small businesses
For everyday savers and spenders
If you’re a current or prospective EQ Bank customer, the 2025 developments suggest:
- More competitive everyday banking bundles: High‑interest deposit accounts, no‑FX prepaid cards and, via PC Financial, access to credit cards that earn PC Optimum points – potentially under a single digital umbrella. [55]
- Stronger loyalty integration: PC Optimum is already deeply embedded in how many Canadians buy groceries, gas and pharmacy items; linking it to EQ Bank accounts could turn banking into a more visible part of that rewards ecosystem. [56]
- Continued competitive rates (but still variable): As of late November, EQ Bank’s posted rates on everyday banking and savings accounts remain above the traditional big‑bank average – but they are not guaranteed and can move as market conditions change. [57]
For small‑business owners
For solopreneurs and small businesses, the new Business Banking offering is directly designed to address pain points that EQ Bank’s survey highlighted:
- Lower fees: Zero monthly fees and free everyday transactions mean fewer surprises on statements. [58]
- Meaningful interest on operating cash: Earning 2.25% on a business account balance is a notable shift in a segment where 0% is still common. [59]
- Time savings: Digital onboarding and self‑serve tools address the reality that many solopreneurs spend as much time on admin and finance as on their core business. [60]
Once PC Financial is integrated, small businesses could also see:
- Combined rewards + banking offerings for business spending (for example, on inventory, fuel or travel)
- More seamless links between business banking and everyday personal rewards, especially for owner‑operators
Risks to watch
Despite the compelling consumer story, there are real risks:
- Economic slowdown and credit quality
- EQB has already increased allowances for credit losses amid a weaker housing market and macro uncertainty. A deeper downturn could pressure earnings further, especially as the bank adds a large credit‑card portfolio with inherently higher loss rates. [61]
- Integration of PC Financial
- Bringing PC Financial’s systems, staff, products and customers into EQ Bank’s platform is a multi‑year task. Any misstep could cause customer churn, regulatory scrutiny or unexpected costs. [62]
- Competitive response from incumbents
- The Big 5 banks and other direct banks could respond with higher promotional rates, richer card offers or their own loyalty tie‑ups, eroding some of EQ Bank’s advantage.
- Regulatory risk
- The transaction requires federal and competition approvals; any delay or conditions imposed on the partnership with PC Optimum could reduce the deal’s value. [63]
- Execution on cost savings
- The restructuring program and projected $30 million in PC Financial cost synergies are central to the bank’s 2026 efficiency targets. Missing those goals would weigh on ROE and investor confidence. [64]
Outlook: What to watch in 2026
Looking ahead from December 4, 2025, several milestones will shape EQ Bank’s trajectory:
- Regulatory approvals and closing of the PC Financial deal
- Investors and customers will watch for updates on approvals and closing timelines throughout 2026.
- Product roadmap for combined EQ Bank + PC Financial
- Expect announcements on how PC Mastercard, PC Money, EQ Bank accounts and PC Optimum will be bundled and branded once integration planning is further along. [65]
- Progress on Business Banking
- The pace at which EQ Bank wins share from incumbents in the small‑business segment will be an important proof point for the new platform.
- Efficiency and ROE trends
- With restructuring charges behind it, EQB will be judged on whether operating leverage improves and ROE trends back toward mid‑teens over time. [66]
- Open‑banking implementation
- As Ottawa’s consumer‑driven banking framework moves from concept to reality, EQ Bank could benefit from easier account switching and data portability – but only if it continues to execute on service, rates and product innovation. [67]
Bottom line
On December 4, 2025, EQ Bank is not just another high‑interest savings account – it’s the digital centrepiece of a bank that is:
- Restructuring its cost base
- Expanding aggressively into small‑business banking
- Making a bold bet on loyalty‑driven, digital‑only banking at national scale through the PC Financial acquisition
For Canadian savers and small‑business owners, that likely means more choice, more rewards, and more pressure on incumbents to compete on value. For investors, it means a higher‑potential, higher‑execution‑risk challenger bank whose 2026 story will hinge on one thing: can EQ Bank turn its momentum, brand strength and new partnerships into sustainably higher profits?
References
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