Key Takeaways
- Shares of goeasy (GSY / EHMEF) plunged more than 32% Tuesday following disclosure of a ~C$178M additional charge-off related to its LendCare segment in Q4 2025
- Management pulled both Q4 projections and its three-year financial roadmap completely
- Annual net charge-off rate is projected to surge to mid-teens percentage in 2026, compared to approximately 12.9% in 2025
- Quarterly dividend payments have been eliminated and the stock repurchase program stopped effective immediately
- Management unveiled a 6-step strategic plan featuring fresh LendCare leadership and plans to scale back auto and powersports loan originations
Tuesday marked a devastating day for goeasy (EHMEF / GSY) shareholders, as the Canadian subprime lender delivered news that confirmed the market’s worst fears. The financial services provider announced it will record an additional charge-off of roughly C$178 million against its C$5.5 billion gross consumer loan receivables portfolio during the fourth quarter of 2025. An accompanying write-down of approximately C$55 million for accrued loan interest and associated fees is also anticipated.
Combined net charge-offs for the period are forecasted to reach approximately C$331 million.
The firm additionally disclosed a sequential net expansion of roughly C$86 million in its credit loss reserve against the gross consumer loan portfolio.
Investors reacted swiftly to the cascade of negative developments. EHMEF plummeted 32% to $57.37 in early trading. On the Toronto Stock Exchange, GSY shares fell as steeply as 50% at one point during the session.
The full-year 2025 net charge-off rate is anticipated to settle at roughly 12.9%. Leadership cautioned that prospective credit quality metrics for LendCare loan portfolios will deteriorate beyond earlier estimates, with the annual net charge-off rate forecast to escalate into the mid-teens range throughout 2026.
LendCare Division Drives the Crisis
The troubles center squarely on the LendCare business segment — which goeasy purchased back in 2021. This division experienced aggressive expansion, but it now seems that rapid scaling outstripped the operational controls and infrastructure required to oversee it effectively.
Management also revealed a reporting methodology flaw. Specific customer payments were being logged as collected while still processing at month’s end — with some of these funds never actually received. This discrepancy also skewed delinquency statistics. The company characterizes the correction as “not material.”
CFO Felix Wu, who had been serving temporarily since September 30, 2025, was officially appointed to the permanent CFO role on Tuesday. He warned stakeholders to brace for “pressure on net charge-offs and higher delinquency reporting for the coming quarters, before an anticipated improvement in 2027.”
Dividend Eliminated, Financial Outlook Withdrawn
Beyond the write-off disclosure, goeasy terminated its quarterly dividend distribution with immediate effect and confirmed it will cease share repurchase activity.
The firm also retracted both its fourth-quarter forecast and its multi-year financial projections that had been previously communicated.
To remediate the LendCare challenges, goeasy outlined a 6-point strategic framework. The organization will scale down auto and powersports loan originations through LendCare’s merchant partnership channels. Management will also consolidate LendCare and easyfinancial operations into a single integrated platform.
Expansion efforts will pivot toward easyfinancial’s unsecured personal loan and home equity lending channels serving direct consumers. The company projects it can achieve annual expense reductions of approximately C$30 million through streamlined operations.
Farhan Ali Khan has been named as the new leader of the LendCare division.
This crisis represents the latest chapter in a period of significant leadership instability. Former CEO Jason Mullins disclosed his retirement plans in July 2024. His successor, Dan Rees, departed in December 2025 citing health issues related to a blood disorder. Patrick Ens, promoted from within, was subsequently appointed to fill the position.
Since Mullins revealed his retirement intentions in 2024, GSY shares have declined over 60%.
goeasy will release complete Q4 2025 financial results following market close on Wednesday, March 25.
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