EQ Bank is buying PC Financial | PC Financial | Discussion forum

Peter said
Apparently we weren't done for mergers & acquisitions this year!

https://www.newswire.ca/news-releases/eqb-redefines-challenger-banking-in-canada-with-agreement-to-acquire-pc-financial-from-loblaw-delivering-transformational-benefits-for-canadians-844773670.html  

Enough already, pretty soon we'll be down to 6 banks, you know which one's I mean. I was with Wyth before it was acquired by EQ. Only signed up this year with PC Financial. Another recent change in the landscape is Laurentian Bank and it's digital platforms, B2B and LBC Digital, both of which I had accounts with. I, like many others, has just gone through the migration with NBC, sigh. I do still miss HSBC, they were good competition for mortgages and had great HISA promos.

For those of us who now have both EQ and PC Financial savings accounts, will these eventually get merged into a single account?

JohnnyCash said

Enough already, pretty soon we'll be down to 6 banks, you know which one's I mean. I was with Wyth before it was acquired by EQ. Only signed up this year with PC Financial. Another recent change in the landscape is Laurentian Bank and it's digital platforms, B2B and LBC Digital, both of which I had accounts with. I, like many others, has just gone through the migration with NBC, sigh. I do still miss HSBC, they were good competition for mortgages and had great HISA promos.  

Although I agree with you, I never considered PC Financial to be an actual bank per say. If anything this is one of the rare cases I think the product may actually be strengthened by merging with EQ.

We all knew the interest rate was introductory to get you to deposit money to PC. Then of course with maximum deposits comes the sale.

Hopefully EQ maintains a competitive rate but judging from past actions these mergers are usually only beneficial to the institutions.

The key question for me is, does Loblaws retain ownership of PC Financial Mastercards which dovetail into the PC Optimum points? EDIT - The answer is in the announcement, " Cements EQB as the challenger in Canadian banking, servicing nearly 3.5 million Canadians with a scaled credit card portfolio and distribution across Loblaw banners "

That's correct. EQB Inc. will be buying President's Choice Bank and related companies. That includes the PC Financial Mastercards and PC Money accounts.

That does not include the PC Optimum program which will continue to be at Loblaw Companies.

The PC Financial branded products will eventually be EQ Bank branded:

The two banks [Equitable Bank and President's Choice Bank] plan to transition PC Financial into EQB's digital EQ Bank brand over time. In the interim, both organizations will maintain the trusted and familiar EQ Bank and PC Financial brands. The PC Optimum™ program will continue to be owned and operated by Loblaw and the value of PC Optimum™ points remains unchanged. EQB will become the PC Optimum™ program's exclusive financial partner, pursuant to the Program Participation Agreement.

If the PC Optimum points awarded on PC MC purchases at Loblaws properties remain as they are today (like 4% on PC MC Insiders), this might the first merger in a while that we like.

AltaRed said
EQB has some issues with the quality of its loan portfolio which is the primary impact. Not unexpected with an alternative lender to some extent. I am not a shareholder myself but I tend to skim financials of the industry overall for trends in direction.

There is no way Loblaws really wants to be a material second tier Schedule 1 bank but they want to keep an insider's view of the company they have partnered with, with an equity interest and a Board seat (or two?).  

Mostly agree, though EQB's loan portfolio quality is better than, say, AMA's Bridgewater Bank or Fairstone Bank.

On the latter point, yes, I think Loblaw realized they were challenged by EQ Bank's Personal Account, EQ Bank Card, Wealthsimple Cash, plus Tangerine and Simplii Financial, to try and grow PC Money Account in a meaningful way. This should add about 250-350,000 customers to the EQ Bank Card, assuming PC Money Account is migrated to the EQ Bank Card, of course. Add in EQ Bank's 650,000 digital banking customers and you get to 1 million. They'll be within striking distance of Simplii Financial, which has likely fallen to between 1.5-1.7 million (they refuse to provide updated customer metrics).

This also allows EQ Bank to grow their credit card business in a really meaningful way (i.e., ~3.2 million of that 3.5 million credit card holders will be postpaid PC Financial credit card customers).

Loblaw also likely realized their PC Financial pavilions, operated by a third-party contractor, was also a hindrance in trying to grow their book of business.

As for the minority equity stake, I suspect EQ Bank likely offered a share component to maintain their Tier 1 capital levels and not significantly deplete their cash resources. This allows Loblaw some potential upside, too; I expect you'll see them eventually divest from EQB in 2-3 years.

Cheers,
Doug

AI Summary

PC Financial began as a joint venture between Loblaw Companies and CIBC in 1998. CIBC provided the banking services behind the scenes, while Loblaw managed the branding and physical presence, including kiosks in stores. In 2017, Loblaw and CIBC ended their partnership, with CIBC taking over the banking products and rebranding them as Simplii Financial. Loblaw retained the PC Financial brand and continued offering financial services, but now using different banking partners. In December 2025, Loblaw announced an agreement for EQB to acquire PC Financial, with the brand to be phased out and replaced by EQ Bank over time, though Loblaw will maintain ownership of the PC Optimum program.

Aha, so now we know why PC abruptly changed their $200 (in points) welcome offer to a mediocre interest rate with direct deposit bonus (much like EQ themselves do)... to make the eventual migration less painful for PC depositors.

This is bad news for us savers. Fewer FI's will mean poorer rates for us, and with Motive and PC now gone, those were two previous chart toppers that are now in the history books.

I bet the Big 5 are trying to throw wads of cash at EQ and WS trying to acquire them, so that they can control the market and continue gouging us.

I think they are feeling some pressure, RBC is running the Will Arnett ads like crazy on my YouTube viewing. I especially find it weird that they want me to trust their track record (it isn't that great for clients, but it has been good for my stock portfolio). I guess having even a small percentage of us escaping their wrath is too much for their liking