---
title: "Is Loblaw Companies Stock Halal?"
canonical: https://www.halalwallet.ca/is-it-halal/loblaw-companies-limited-stock
publisher: HalalWallet
license: CC BY 4.0
verdict: halal
verdict_label: Halal
entity_type: stock
ticker: L.TO
exchange: TSX
last_reviewed: 2026-06-15
data_as_of: 2026-03-31
standards_disagree: false
authorities_with_position: 2
authority_agreement: split
---
# Is Loblaw Companies Stock Halal?

**Authority consensus:** Halal screening authorities disagree on Loblaw Companies Limited: halal (HalalWallet (AAOIFI)); not halal (Musaffa).

**Verdict: Halal** (Generally permissible)

Loblaw Companies Limited (L.TO) passes our AAOIFI-based screen. Its core business is permissible, and (data as of 2026-03-31) interest-bearing debt is 10.0% of market cap and cash plus interest-bearing securities 1.2% — both inside the 30% AAOIFI thresholds. It is not held by Shariah-screened ETFs WSHR. Ratios move with the share price, so check the data-as-of date; any incidental interest income should be purified.

> HalalWallet is not a Shariah authority and does not issue religious rulings. We compile the most complete public record of what Shariah scholars, screening authorities, and mainstream standards say — reproduced from primary sources with dates and citations — and let you decide.

## How we read the evidence

Loblaw's core business, selling groceries and running pharmacies, is permissible, and grocery retail is a sector Shariah screens treat favourably. The complications sit at the edges, and they are worth taking seriously because they are documented in Loblaw's own filings. First, Loblaw is not purely a retailer: it has a Financial Services segment built around President's Choice Financial, whose revenue includes interest income on PC Mastercard credit card balances, exactly the kind of riba-based income the screens exist to catch. The segment is small relative to the retail business, with $1.6 billion of revenue against nearly $60 billion of retail sales in fiscal 2024, which is why the question becomes a threshold judgment rather than an automatic fail.

That picture is changing in a way investors should watch: in December 2025, Loblaw agreed to sell PC Financial, including President's Choice Bank, to EQB Inc., with the deal expected to close on July 1, 2026. If completed, the divestiture removes the in-house banking operation, though Loblaw will retain a commercial relationship through the PC Optimum program. Second, Loblaw's stores sell alcohol where licensed, including beer and wine in Ontario grocery stores, and earn commissions on lottery tickets; the company does not disclose these revenue lines separately, so their share cannot be quantified from public filings.

The net result is a genuinely mixed case: a permissible core with identifiable impermissible streams that the company's own reporting confirms but does not size precisely. A current screener verdict should carry the most weight here, both because the financial-services divestiture is in flight and because alcohol and lottery exposure require judgment about materiality that depends on data retail investors cannot see.

## Business activity screen

Result: Pass

Loblaw Companies is Canada's largest food and pharmacy retailer, with two reportable segments: Retail (corporate and franchise grocery stores plus Shoppers Drug Mart/Pharmaprix drug stores, including in-store pharmacies, health and beauty, apparel, and general merchandise) and Financial Services (PC Financial credit cards, the PC Money Account, the PC Optimum loyalty program, insurance brokerage, and telecom services). In fiscal 2024, Retail sales were $59,786 million and Financial Services revenue was $1,586 million of total revenue of $61,014 million.

Three impermissible-revenue touchpoints, all from company disclosures: (1) Financial Services: Loblaw's 2024 annual report states this segment's revenue includes interest income on credit card loans (PC Financial Mastercard) plus fees; President's Choice Bank also issues the PC Money Account. In December 2025 Loblaw agreed to sell PC Financial (President's Choice Bank and insurance affiliates) to EQB Inc., with closing expected July 1, 2026, after which EQB becomes the exclusive financial partner of PC Optimum. (2) Alcohol: Loblaw banners sell beer and wine where provincially licensed (e.g., licensed Ontario grocery stores); Loblaw does not disclose alcohol revenue separately. (3) Lottery: the annual report notes Loblaw earns commissions on lottery sales, recorded net as an agent. Shoppers Drug Mart does not sell tobacco; a specific 2014 corporate cessation date could not be verified from an allowed source (pharmacy tobacco sales are banned by law in most provinces), so that claim is left unstated.

## Financial ratio screen (AAOIFI)

Data as of: 2026-03-31

| Screen | Value | Limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 10.0% | < 30% | Pass |
| Cash + interest-bearing securities / market cap | 1.2% | < 30% | Pass |
| Impermissible income / total revenue | 0.0% | < 5% | Pass |

Screening basis: AAOIFI Shariah Standard No. 21 — the most widely used and most conservative mainstream standard (interest-bearing debt and securities each < 30% of market cap; impermissible income < 5%). Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets. Full methodology: https://www.halalwallet.ca/halal-stock-screening-methodology

## How it screens across Shariah standards

All three mainstream bases below reach the same conclusion for this company.

| Standard | Debt | Cash & interest securities | Limit / basis | Result |
|---|---|---|---|---|
| AAOIFI (our standard) | 10.0% | 1.2% | < 30% of market cap | Pass |
| Dow Jones Islamic / S&P Shariah threshold | 10.0% | 1.2% | < 33% of market cap | Pass |
| MSCI Islamic / FTSE Yasaar basis | 14.8% | 2.3% | < 33.33% of total assets | Pass |

HalalWallet computation reproducing each standard's threshold and denominator from public filings (balance sheet as of 2026-03-31) — not the providers' licensed index determinations, which can differ. Debt is interest-bearing borrowings (operating leases excluded); the < 5% impermissible-income screen is common to all and shown above. Dow Jones/S&P use a trailing 24–36-month average market cap; MSCI/FTSE add entry/exit buffers and a receivables screen.

## Scholars' and screeners' positions

- **Wealthsimple Shariah World Equity Index ETF (WSHR)**: Not held in WSHR as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome. ([source](https://help.wealthsimple.com/hc/en-ca/articles/1500011334461-Stocks-held-in-the-Wealthsimple-Shariah-World-Equity-Index-ETF-WSHR))
- **Musaffa**: Public page classifies the stock NOT HALAL (checked 2026-06-15). ([source](https://musaffa.com/stock/L.TO/))
- **HalalWallet AAOIFI screen**: Rates Loblaw Companies Limited (L.TO) Shariah-compliant under AAOIFI: the core business is permissible and every financial ratio is within limits — interest-bearing debt 10% of market cap (limit 30%), cash plus interest-bearing securities 1.2% (limit 30%), impermissible income 0% of revenue (limit 5%) on 2026-03-31 figures. ([source](/halal-stock-screening-methodology))

## Purification

Even Shariah-compliant companies typically earn a small amount of incidental interest on corporate cash. The standard practice is to purify: donate the proportion of your dividends (and, per some scholars, capital gains) attributable to impermissible income. Our purification calculator automates the math from your holding and the company's disclosed figures.

## Sources

- L.TO latest filings on SEDAR+ (balance sheet 2026-03-31) (https://www.sedarplus.ca/csa-party/records/document.html)
- AAOIFI Shariah Standards (https://aaoifi.com)
- Loblaw 2024 Annual Report (segments, Financial Services revenue, lottery commissions) (https://dis-prod.assetful.loblaw.ca/content/dam/loblaw-companies-limited/creative-assets/loblaw-ca/investor-relations-reports/annual/2024/LCL_2024_AR.pdf)
- Loblaw 2024 Annual Report on SEDAR+ (https://www.sedarplus.ca/csa-party/records/document.html?id=c9d95928dc238a321cc02f4e05a0d11b4d0f392ffa6b2f694ac0ec3f2f59bd84)
- PC Financial product pages (PC Money Account, PC Mastercard) (https://www.pcfinancial.ca/en/)
- EQB press release: agreement to acquire PC Financial from Loblaw (Dec 3, 2025) (https://eqb.investorroom.com/2025-12-03-EQB-redefines-challenger-banking-in-Canada-with-agreement-to-acquire-PC-Financial-from-Loblaw,-delivering-transformational-benefits-for-Canadians)
- EQB Q2 2026 release: expected July 1, 2026 closing of PC Financial acquisition (https://eqb.investorroom.com/2026-05-27-EQB-reports-second-quarter-2026-results-and-announces-expected-July-1,-2026-closing-of-PC-Financial)
- WSHR holdings list (Wealthsimple) (https://help.wealthsimple.com/hc/en-ca/articles/1500011334461-Stocks-held-in-the-Wealthsimple-Shariah-World-Equity-Index-ETF-WSHR)
- Loblaw Companies Limited SEC EDGAR filings (https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&company=Loblaw%20Companies%20Limited&type=10-K)
- Musaffa — L.TO (https://musaffa.com/stock/L.TO/)
- SPUS Schedule of Investments reference (2026-02-28) (https://www.sec.gov/Archives/edgar/data/1742912/000200032426001717/spus-soi_022826.htm)
- HLAL holdings reference (2026-06-05) (https://stockanalysis.com/etf/hlal/holdings/)

## Frequently asked questions

### Is Loblaw Companies Limited (L.TO) stock halal?

Yes, under our AAOIFI-based methodology Loblaw Companies Limited passes the business-activity and financial-ratio screens as shown on this page (data as of 2026-03-31). Check the dated ratio table before investing; ratios move with the share price.

### Does Loblaw Companies Limited pass the AAOIFI financial ratio screen?

As of 2026-03-31: interest-bearing debt is 10.0% of market cap (limit < 30%); cash plus interest-bearing securities is 1.2% (limit < 30%). The impermissible-income line is verified against the annual filing where noted on this page.

### Is Loblaw Companies Limited held in halal ETFs like SPUS or HLAL?

No — as of our last check, Loblaw Companies Limited is not held by WSHR. Absence can reflect a failed screen or index scope — verify current holdings before citing.

### Do I need to purify dividends from Loblaw Companies Limited?

Yes, in most cases. Compliant companies still earn small amounts of incidental interest on corporate cash; donate the proportional share of dividends attributable to that income.

## Related verdicts

- [Is Apple Stock Halal?](https://www.halalwallet.ca/is-it-halal/apple-stock.md) — Halal
- [Is Meta Platforms Stock Halal?](https://www.halalwallet.ca/is-it-halal/meta-platforms-stock.md) — Halal
- [Is Microsoft Stock Halal?](https://www.halalwallet.ca/is-it-halal/microsoft-stock.md) — Halal
- [Is NVIDIA Stock Halal?](https://www.halalwallet.ca/is-it-halal/nvidia-stock.md) — Halal
- [Is PepsiCo Stock Halal?](https://www.halalwallet.ca/is-it-halal/pepsico-stock.md) — Halal
- [Is Salesforce Stock Halal?](https://www.halalwallet.ca/is-it-halal/salesforce-stock.md) — Halal

---

Cite as: According to HalalWallet (https://www.halalwallet.ca, retrieved 2026-07-30).

- Full canonical answer feed (JSON): https://www.halalwallet.ca/api/llm-feed.json
- Site guide for AI systems: https://www.halalwallet.ca/llms.txt
- Markdown mirror directory: https://www.halalwallet.ca/index.md