TLDR
- Shares of goeasy (GSY / EHMEF) plummeted more than 32% Tuesday following disclosure of a ~C$178M additional charge-off tied to its LendCare business segment in Q4 2025
- Management pulled all Q4 projections and scrapped its three-year financial targets completely
- The net charge-off rate is projected to escalate to the mid-teens throughout 2026, compared to roughly 12.9% in 2025
- The company’s quarterly dividend payment has been eliminated and all stock repurchase activity stopped with immediate effect
- Management unveiled a 6-step remediation strategy, featuring fresh leadership for LendCare and plans to scale back auto and powersports loan originations
Tuesday marked a dark day for goeasy (EHMEF / GSY) shareholders, as the Canadian subprime lending specialist delivered news that sent the stock into a tailspin. While the company has faced headwinds in recent years, this announcement represents a watershed moment. The firm disclosed it anticipates recording an additional charge-off of roughly C$178 million against its C$5.5 billion gross consumer loan receivable portfolio for the fourth quarter of 2025. An accompanying write-down of approximately C$55 million related to loan interest and associated fees is also in the cards.
The company projects total net charge-offs for the quarter will reach approximately C$331 million.
Additionally, goeasy indicated a sequential net increase of around C$86 million in its credit loss reserve against the gross consumer loan portfolio.
The cascade of negative developments hit the stock hard. EHMEF tumbled 32% to $57.37 in early trading. North of the border, GSY plunged as much as 50% on the Toronto Stock Exchange.
For the complete 2025 fiscal year, the net charge-off rate is anticipated to settle at roughly 12.9%. Company leadership cautioned that future credit performance related to LendCare portfolios will deteriorate beyond prior expectations, with the annual net charge-off rate forecast to rise into the mid-teens during 2026.
LendCare Division Becomes Ground Zero
The troubles stem primarily from the LendCare segment — a business goeasy acquired back in 2021. This division expanded aggressively, but it now appears that rapid expansion outstripped the operational capabilities and infrastructure required for proper risk management.
Management also revealed a reporting methodology flaw. Some customer payments were being logged as received while still in the settlement process at month’s close — and a portion of these payments never actually materialized. This discrepancy also impacted how delinquency metrics were reported. The company characterizes the adjustment to fix this issue as “not material.”
Felix Wu, who had been filling the CFO role on an interim basis since September 30, 2025, was officially appointed to the position permanently 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.”
Shareholder Returns Eliminated, All Forecasts Withdrawn
Beyond the write-down revelation, goeasy terminated its quarterly dividend distribution immediately and confirmed it will halt all share buyback activity.
The company simultaneously retracted both its Q4 outlook and its multi-year financial roadmap that had been previously communicated to investors.
To tackle the challenges at LendCare, goeasy rolled out a 6-point corrective action framework. The strategy includes curtailing auto and powersports loan originations through LendCare’s merchant partner channels. The company will also consolidate LendCare and easyfinancial operations into a single unified platform.
Future growth initiatives will pivot toward easyfinancial’s unsecured personal loans and home equity lending products distributed directly to consumers. Management indicated the operational efficiency measures should generate approximately C$30 million in annual cost reductions.
Farhan Ali Khan has been named the new leader of the LendCare division.
This latest crisis follows a period of substantial leadership instability. CEO Jason Mullins announced his retirement plans in July 2024. His successor, Dan Rees, departed in December 2025 due to health issues related to a blood disorder. Patrick Ens, promoted from within, now leads the company.
Since Mullins revealed his retirement intentions in 2024, GSY shares have declined more than 60%.
goeasy is slated to release complete Q4 2025 financial results after the market closes on Wednesday, March 25.
