TLDR
- Shares of goeasy (GSY / EHMEF) plunged more than 32% Tuesday following disclosure of approximately C$178M in additional charge-offs from its LendCare segment during Q4 2025
- Management pulled all Q4 projections and retracted its three-year financial outlook completely
- The company projects net charge-off rates will reach the mid-teens during 2026, a sharp increase from approximately 12.9% recorded in 2025
- Both the quarterly dividend payment and stock repurchase program were terminated with immediate effect
- Management unveiled a 6-part restructuring strategy, including fresh leadership for LendCare and reduced focus on auto and powersports lending
Tuesday brought the kind of news goeasy (EHMEF / GSY) shareholders had been fearing for months. The Canadian subprime lending specialist disclosed it will record an additional charge-off of roughly C$178 million against its C$5.5 billion gross consumer loan portfolio for the fourth quarter of 2025. An accompanying write-down of approximately C$55 million related to loan interest and associated fees will also hit the books.
The total net charge-offs for Q4 are anticipated to reach approximately C$331 million.
Additionally, the firm revealed a sequential net increase of about C$86 million in its credit loss provision against the gross consumer loan portfolio.
The market response was swift and brutal. EHMEF shares cratered 32% to $57.37 in early trading. On the Toronto Stock Exchange, GSY experienced an even steeper decline, tumbling as much as 50%.
For the complete 2025 fiscal year, the net charge-off rate is projected to settle at roughly 12.9%. Leadership cautioned that future credit performance within the LendCare loan book will deteriorate beyond prior expectations, with annual net charge-off rates forecast to reach the mid-teens throughout 2026.
LendCare Division Drives the Crisis
The problems stem primarily from LendCare — a business goeasy purchased in 2021. While the division expanded aggressively, it seems the supporting operational systems and controls failed to keep pace with that growth.
Management also revealed a flaw in its payment reporting approach. Specific customer payments were being logged as received during month-end settlement periods — even though some of those funds were never actually collected. This reporting error also distorted delinquency metrics. The company characterizes the correction as “not material.”
Felix Wu, who had occupied the CFO role on an interim basis since September 30, 2025, was officially promoted to permanent CFO on Tuesday. Wu acknowledged the firm anticipates “pressure on net charge-offs and higher delinquency reporting for the coming quarters, before an anticipated improvement in 2027.”
Dividend Axed, All Forecasts Withdrawn
Beyond the charge-off revelation, goeasy eliminated its quarterly dividend distribution immediately and confirmed it will cease all share buyback activity.
The company also rescinded both its fourth-quarter projections and the multi-year financial roadmap previously communicated to investors.
To tackle the LendCare challenges, management introduced a 6-point remediation blueprint. The plan includes scaling back auto and powersports loan originations through LendCare’s merchant partner network. Leadership will also consolidate LendCare and easyfinancial operations under a single unified framework.
Future growth initiatives will prioritize easyfinancial’s direct-to-consumer unsecured and home equity lending channels. Management believes it can extract roughly C$30 million in annual cost reductions through enhanced operational efficiency.
Farhan Ali Khan has been tapped to lead the LendCare division moving forward.
This development follows a period of considerable leadership instability. CEO Jason Mullins announced plans to retire in July 2024. His successor, Dan Rees, departed in December 2025 due to health complications related to a blood disorder. Patrick Ens, promoted from within, now holds the CEO position.
Since Mullins first revealed his retirement plans in 2024, GSY shares have declined more than 60%.
goeasy is slated to release complete fourth-quarter 2025 earnings after the closing bell on Wednesday, March 25.
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