EQB Inc. (TSX: EQB) Soars on PC Financial Deal as 2025 Earnings Disappoint

TORONTO – December 4, 2025 – Shares of EQB Inc. (TSX: EQB) ripped higher today after the digital lender unveiled a transformative deal to acquire PC Financial from Loblaw alongside a mixed fourth‑quarter and fiscal 2025 earnings report. The stock traded around C$97.71, up roughly 12.5% intraday, its sharpest move in months, pushing EQB’s market cap to about C$3.3 billion. ^[1]

This article breaks down today’s news, the PC Financial acquisition, EQB’s 2025 results, 2026 guidance, and what analysts and valuations are signaling as of December 4, 2025.

Why EQB Stock Is Surging Today

EQB’s rally is driven less by its backward‑looking earnings and more by the forward‑looking PC Financial deal.

Price action: Intraday, EQB changed hands near C$97.71, up C$10.86 (+12.50%) from the prior close, making it one of the top movers on the TSX and a trending ticker on Canadian finance portals. ^[2]
Biggest jump in over a year: Coverage of the day’s move notes this is EQB’s strongest intraday surge since at least mid‑2025. ^[3]
Earnings “miss,” stock “hit”: Despite missing consensus EPS and revenue forecasts for Q4 2025, the stock gained more than 11% as investors focused on the strategic upside of the Loblaw/PC Financial partnership and the cost‑cutting plan. ^[4]

In short, the market is choosing to look past a messy quarter in exchange for a structurally bigger, more scalable challenger bank franchise.

Inside the PC Financial Deal With Loblaw

The headline news is EQB’s agreement to buy PC Financial from Loblaw Companies Limited, including President’s Choice Bank and related insurance entities, and to become the exclusive financial partner for the PC Optimum loyalty program. ^[5]

Key elements of the transaction:

Scope of the acquisition: EQB is acquiring President’s Choice Bank, PC Financial Insurance Agency, PC Financial Insurance Brokers and affiliated entities (collectively “PC Financial”), as well as the PC Mastercard portfolio and PC Money Account relationships. ^[6]
Customer and asset scale:
- PC Bank brings more than $5 billion in assets under management and roughly 2.5 million customers, including one of the largest non‑Big‑Six credit card portfolios in Canada. ^[7]
- Combined, EQB expects to serve nearly 3.5 million customers and add $5.8 billion in assets plus over $800 million in direct retail deposits. ^[8]
Strategic loyalty tie‑up: EQB will become the exclusive financial services partner for the PC Optimum™ program, which counts around 17 million active members, under a 12‑year commercial agreement. ^[9]
Consideration and ownership: The purchase price will be paid through the issuance of roughly 7.2 million EQB common shares, expected to represent about 17% of EQB’s common shares post‑closing, plus cash. Loblaw becomes a significant minority shareholder once the deal closes. ^[10]
Valuation and accretion: EQB says the deal is expected to be mid‑single‑digit accretive to consensus adjusted EPS in the first full year post‑closing and to enhance return on equity (ROE), while maintaining a strong CET1 capital position. ^[11]
Timing: The acquisition is subject to regulatory approvals and customary conditions and is expected to close in calendar 2026. ^[12]

Independent coverage has framed the transaction at about C$800 million in value for PC Financial, with additional pre‑closing capital returns at Loblaw effectively lifting total consideration toward C$1.3 billion, and giving Loblaw something on the order of a high‑teens percent stake in EQB. ^[13]

Strategic takeaway: EQB instantly vaults from niche challenger to a scaled, loyalty‑linked franchise with credit cards, everyday banking, and a deeper foothold in consumer payments – but also takes on a more complex integration and credit‑cycle risk profile.

Fiscal 2025: A Difficult Year Behind the Headline Deal

The enthusiasm around the Loblaw tie‑up masks a year that management openly calls “difficult.”

Headline financials

From EQB’s Q4 and 2025 release and annual report: ^[14]

Full‑year 2025 (year ended October 31):
- Revenue: C$1.26 billion, roughly flat year over year.
- Reported net income: C$266.6 million (down from C$401.7 million in 2024).
- Reported diluted EPS:C$6.56 (vs. C$10.11 in 2024).
- Adjusted diluted EPS:C$8.90, down 19% year over year.
- Adjusted ROE:11.3% vs management’s medium‑term goal of 15–17%. ^[15]
Q4 2025 (three months ended October 31):
- Adjusted diluted EPS:C$1.53, down 39% year over year.
- Reported diluted EPS:–C$0.25, reflecting one‑time charges.
- Adjusted net income: C$63.5 million (‑37% YoY).
- Reported net income: a loss of about C$4.8 million. ^[16]

Credit costs and a step‑change in expenses are the two big drags:

Provision for credit losses (PCL): C$137.4 million in 2025, up from C$107.0 million in 2024, driven by weaker housing markets and more conservative macroeconomic assumptions. ^[17]
Non‑interest expenses: rose to about C$752.9 million from C$594.1 million, partly due to restructuring and growth investments. ^[18]

The C$92 million restructuring hit

A central part of the Q4 story is a one‑time restructuring program:

EQB booked C$92 million pre‑tax in restructuring, severance and non‑operating asset impairment charges in Q4. ^[19]
The charges include roughly C$22.7 million in severance and C$69.3 million in non‑operating asset impairments. ^[20]
Management and the earnings call commentary indicate the program is expected to deliver about C$45 million in annual expense savings, supporting positive operating leverage from 2026 onward. ^[21]

This restructuring is why GAAP Q4 EPS dipped negative even though the underlying franchise remains profitable on an adjusted basis.

Operational Trends: Deposits, Lending and EQ Bank’s Momentum

Beneath the headline numbers, EQB continues to grow across several core businesses:

EQ Bank (digital retail platform):
- Deposits reached about C$9.9–10 billion, up roughly 10% year over year.
- Customer count climbed to around 607,000, up 18% year over year and 4% sequentially. ^[22]
Decumulation lending (reverse mortgages & insurance lending): This portfolio grew 36% year over year to roughly C$2.9 billion, benefiting from aging demographics and “age‑in‑place” preferences. ^[23]
Business Banking: EQB launched a new all‑digital Business Banking platform in Q4, targeting small businesses with a differentiated value proposition and a growing product roadmap. ^[24]
Scale and ranking: Including loans and off‑balance sheet assets, EQB reports C$138 billion in combined assets under management and administration and describes Equitable Bank as Canada’s 7th‑largest bank by assets. ^[25]

Those growth engines matter, because the PC Financial acquisition effectively plugs them into a much larger, loyalty‑based funnel of consumer relationships.

2026 Outlook: ROE Targets, Growth and PC Financial Integration

EQB’s 2026 story is all about earning back its historical return profile while digesting a major acquisition.

Near‑term 2026 targets

From management commentary and earnings‑call summaries: ^[26]

ROE: EQB is targeting a return on equity approaching 12% by the end of fiscal 2026, up from an adjusted 11.3% in 2025.
Loan growth: Management guides to high single‑digit to low double‑digit growth in Loans under Management (LUM), with focus on uninsured residential mortgages and commercial lending.
Margins and efficiency:
- Net interest margin (NIM) expected to remain around or just above 2%.
- Expense growth in low single digits, with positive operating leverage and an efficiency ratio planned in the low 50s (adjusted 2025 efficiency was about 50.9%). ^[27]
Restructuring benefits: The C$45 million of targeted annual savings from the Q4 restructuring are a core part of the path to better efficiency and ROE. ^[28]

Medium‑term objectives

EQB’s medium‑term (roughly three‑year) objectives, reaffirmed in its 2025 annual report, are more ambitious: ^[29]

Adjusted ROE:15–17%
Adjusted diluted EPS growth:12–15% annually
Dividend growth: around 15% per year
Operating leverage: flat to slightly positive, with a “strong” CET1 capital ratio

The PC Financial transaction is explicitly framed as a way to support those medium‑term goals by adding scale, fee income and cross‑sell opportunities to a digital‑first cost base. ^[30]

Analyst Ratings and Forecasts: Consensus “Hold,” One Fresh “Sell”

Analysts are split between cautious and constructive.

Street consensus

MarketBeat’s aggregation of 11 equity research analysts covering EQB shows: ^[31]

Consensus rating:“Hold”
- 9 Hold ratings
- 2 Buy ratings
Average 12‑month price target:C$101.40
- High target: C$116.00
- Low target: C$89.00
Implied upside: About 3.8% from today’s C$97.71 share price.

The consensus rating has drifted from “Moderate Buy” a year ago to Hold now, reflecting slower EPS growth and higher credit costs as the Canadian economy slows. ^[32]

MarketBeat’s earnings page also highlights how 2025 EPS fell short of earlier expectations. At one point, FY 2025 consensus sat around C$10.27 per share; EQB’s reported diluted EPS came in at C$6.56 and adjusted diluted EPS at C$8.90, both below those prior estimates. ^[33]

Recent rating actions

TipRanks auto‑coverage notes that the most recent single analyst rating recorded in its system is a Sell with a C$90.00 price target, implying downside from current levels. ^[34]
A few months earlier, National Bank cut its target by C$15 following a “big miss” in Q3 2025 EPS, citing rising provisions and margin pressure – an episode that set up today’s relief rally when Q4 and the PC deal landed better than feared. ^[35]

The net result: the Street broadly respects EQB’s strategic positioning and the transformative potential of PC Financial, but wants to see cleaner execution, stable credit trends and proof that ROE can climb back toward the mid‑teens.

Valuation Snapshot: How Expensive Is EQB After the Pop?

At today’s ~C$97.71 share price, EQB screens as moderately valued relative to its earnings power and book value, especially once PC Financial is factored in.

Using 2025 results and management metrics: ^[36]

Book value per share: about C$81.31 at year‑end 2025.
- Price‑to‑book (P/B): ≈ 1.2x (97.71 ÷ 81.31).
Reported diluted EPS (2025): C$6.56
- P/E on reported EPS: ≈ 14.9x.
Adjusted diluted EPS (2025): C$8.90
- P/E on adjusted EPS: ≈ 11.0x.
Dividend: The board declared a C$0.57 quarterly common share dividend (Dec. 31, 2025 payment), 16% higher than a year ago and 4% above the prior quarter. Annualized at C$2.28, that implies a dividend yield of about 2.3% at today’s price. ^[37]

These multiples place EQB at:

A discount to its historical ROE targets (15–17% vs. current 11.3% adjusted).
A modest valuation vs. many Big Six banks that trade in the 10–12x forward EPS range but with lower organic growth and fewer digital‑first assets. (Exact peer multiples vary by source and date.)

If management delivers on 2026 and PC Financial ends up mid‑single‑digit accretive to EPS, today’s valuation could prove reasonable. If credit conditions worsen or integration stumbles, the recent multiple expansion may unwind quickly.

Key Risks and What to Watch Next

Even with today’s enthusiasm, EQB remains squarely in “show‑me” territory.

Major risk areas, many of which EQB itself flags in its MD&A, include: ^[38]

Macroeconomic and housing risk
EQB is heavily exposed to Canadian real estate through uninsured mortgages and commercial real‑estate loans. A deeper housing downturn, higher unemployment or persistent rate volatility could push credit losses above already elevated 2025 levels.
PC Financial integration and execution risk
- Regulatory approvals must come through on time for the deal to close in 2026.
- EQB needs to integrate a large credit‑card and everyday‑banking portfolio without missteps in risk management, IT, or customer experience.
- Realization of promised EPS accretion depends heavily on synergy capture and stable credit performance in the PC Mastercard book.
Capital and funding discipline
EQB plans to maintain a strong CET1 ratio while issuing 7.2 million shares and absorbing PC Financial’s assets. That requires tight control over loan growth, dividends and buybacks, especially if markets turn more volatile. ^[39]
Competition in digital banking
EQ Bank has been recognized as a top banking brand in Canada and North America, but the competitive landscape is intensifying with big‑bank digital spinoffs and fintechs. Maintaining deposit momentum while managing funding costs will be crucial. ^[40]

Bottom Line: A High‑Beta Canadian Bank Story Enters Its Next Chapter

As of December 4, 2025, EQB stock is trading like a reset story with a catalyst:

Bear case: 2025 showed that even high‑growth digital lenders are not immune to credit cycles and expense creep. Restructuring charges, rising provisions and earnings misses have eroded some of EQB’s hard‑won credibility, and the PC Financial acquisition adds integration and consumer‑credit risk just as the economy slows. ^[41]
Bull case: EQB emerges from 2025 leaner, more focused and significantly larger, with a unique combination of digital banking, challenger culture, and deep integration into one of Canada’s most powerful retail loyalty ecosystems. If management hits its ROE and EPS growth targets and executes smoothly on PC Financial, today’s valuation could underestimate the long‑term earnings power. ^[42]

For investors following Canadian financials, EQB has just shifted from a niche “quiet compounder” to a headline‑grabbing high‑beta bank plus loyalty ecosystem. Whether that translates into superior long‑term returns will hinge on credit quality, integration discipline and the bank’s ability to monetise millions of new customer relationships without losing its challenger DNA.