EQB shares tumbled Thursday after the alternative lender reported a third-quarter loss, hurt by a surge in credit loss provisions following its acquisition of PC Financial.

Shares fell more than 10% to 123.83 Canadian dollars ($89.23).

Late Wednesday, EQB reported a loss of C$127.3 million, or C$3.39 a share, compared with a profit of C$73.4 million, or C$1.90 a share a year earlier.

The loss was driven by a C$219 million "Day 1" accounting charge required to set aside reserves for PC Financial's unsecured credit-card portfolio, along with rising loan losses in its core real-estate lending business. Overall provisions for credit losses - money set aside to cover potential bad debts - rose to C$303 million, from C$34 million a year earlier.

EQB completed its transaction to acquire Canadian retail banking and financial services brand PC Financial from grocer Loblaw in July. The acquisition added PC Financial's credit-card operations and retail deposit accounts to EQB's digital banking platform, while establishing EQB as the exclusive banking partner for the PC Optimum loyalty program.

On an adjusted basis, which excludes one-off costs and exceptional items such as integration expenses, earnings were C$2.12 a share, but came in shy of expectations for C$2.21 a share.

Higher interest income from the acquisition helped lift quarterly revenue by 28% to C$391.3 million, above analyst forecasts of C$370.2 million.

"Underneath the transaction, earnings were impacted by elevated performing and impaired provisions that reflect the continued pressure many Canadians are facing," Chief Executive Chadwick Westlake said, noting that he expects improved earnings from the combined business to start to show in the fourth quarter.

"We will set out the path to our 2027 and medium-term return objectives at our Investor Day in December," Westlake said.