TLDR
- goeasy (GSY / EHMEF) plummeted over 32% on Tuesday following disclosure of a ~C$178M incremental charge-off related to its LendCare division for Q4 2025
- Management withdrew both Q4 outlook and the three-year financial forecast completely
- Annual net charge-off rate is projected to reach the mid-teens in 2026, compared to ~12.9% in 2025
- Quarterly dividend has been eliminated and share repurchase programs stopped effective immediately
- Management unveiled a 6-point action plan featuring new LendCare leadership and plans to reduce auto and powersports loan originations
goeasy (EHMEF / GSY) experienced Tuesday’s collapse after years of mounting pressure. The Canadian non-prime lender disclosed plans to record an incremental charge-off of approximately C$178 million against gross consumer loans receivable totaling C$5.5 billion for Q4 2025. An additional write-down of ~C$55 million for loan interest and fees will accompany this adjustment.
Total net charge-offs for the quarter are anticipated to reach approximately C$331 million.
Management also disclosed a sequential net increase of roughly C$86 million in credit loss allowance related to its gross consumer loan portfolio.
The market response was swift and severe. EHMEF tumbled 32% to $57.37 shortly after opening bell. On the Toronto Stock Exchange, GSY experienced declines as steep as 50%.
The annual net charge-off rate for 2025 in its entirety is forecast to settle at approximately 12.9%. Management issued a warning that forward-looking credit performance on LendCare loans will deteriorate beyond previous expectations, with the annual net charge-off rate anticipated to rise to the mid-teens in 2026.
LendCare Division Drives Crisis
The LendCare division — brought into the goeasy portfolio through a 2021 acquisition — represents the epicenter of these challenges. The unit expanded aggressively, yet that expansion appears to have outstripped the operational capabilities required for proper management.
Management also revealed a reporting methodology flaw. Certain customer payments were classified as received while still undergoing settlement at month end — with some of these payments never actually collected. This issue also impacted reported delinquency metrics. The company characterizes the correction as “not material.”
CFO Felix Wu, who had been operating in an interim role since September 30, 2025, received confirmation as permanent CFO on Tuesday. He warned the company anticipates “pressure on net charge-offs and higher delinquency reporting for the coming quarters, before an anticipated improvement in 2027.”
Dividend Eliminated, All Guidance Withdrawn
Alongside the charge-off disclosure, goeasy eliminated its quarterly dividend with immediate effect and announced a halt to all stock repurchase activity.
Management also pulled both its Q4 guidance and its previously communicated three-year financial forecast.
To tackle the challenges facing LendCare, goeasy unveiled a 6-point action plan. The company will scale back auto and powersports originations flowing through LendCare’s merchant channels. Management will also merge LendCare and easyfinancial into a single unified operating structure.
Growth initiatives will pivot toward easyfinancial’s unsecured and home equity lending direct-to-consumer channels. Management believes it can generate annualized cost savings of approximately C$30 million through enhanced operational efficiencies.
Farhan Ali Khan has been installed as the new head of LendCare.
This crisis arrives amid considerable leadership instability. CEO Jason Mullins announced his retirement in July 2024. His successor, Dan Rees, departed in December 2025 due to a blood disorder. Patrick Ens, promoted from within, assumed the role.
Since Mullins announced his retirement in 2024, GSY stock has declined more than 60%.
goeasy is scheduled to release its complete Q4 2025 financial results after market close on Wednesday, March 25.
