Key Takeaways
- Shares of goeasy (GSY / EHMEF) plummeted more than 32% Tuesday following disclosure of a ~C$178M additional charge-off tied to its LendCare segment in Q4 2025
- Both the quarterly outlook and three-year financial projections were completely withdrawn
- The net charge-off rate is projected to reach mid-teens levels in 2026, compared to roughly 12.9% for 2025
- Management suspended quarterly dividend payments and immediately stopped all share repurchase activity
- The company unveiled a 6-step corrective action plan featuring new LendCare leadership and a reduction in auto and powersports loan originations
For goeasy (EHMEF / GSY), Tuesday marked a devastating turning point following years of mounting challenges. The Canadian subprime and near-prime lender shocked investors by announcing it will record an additional charge-off of approximately C$178 million against its C$5.5 billion gross consumer loan receivables portfolio in Q4 2025. An accompanying write-down of roughly C$55 million related to accrued loan interest and fees will also hit the books.
The company projects total net charge-offs for the fourth quarter will reach approximately C$331 million.
Additionally, goeasy disclosed a sequential net increase of about C$86 million in its credit loss allowance relative to its gross consumer loan portfolio.
The barrage of negative developments sent investors fleeing. EHMEF shares collapsed 32% to $57.37 in early trading. On the Toronto Stock Exchange, GSY plummeted as much as 50% during the session.
For the complete 2025 fiscal year, the net charge-off rate is anticipated to settle around 12.9%. Company leadership cautioned that future credit performance within the LendCare portfolio will deteriorate beyond prior expectations, with annual net charge-offs projected to escalate into the mid-teens range during 2026.
LendCare Division Emerges as Primary Problem
The troubles center squarely on the LendCare division — a business goeasy acquired back in 2021. While the segment expanded aggressively, it appears the rapid growth outstripped the company’s ability to build adequate operational controls and infrastructure.
Management also revealed a flaw in reporting methodology. Certain customer payments were being recorded as received even while still in settlement at month-end — and some of those payments never materialized. This error also distorted reported delinquency metrics. The company characterized the correction as “not material.”
CFO Felix Wu, who had been serving in an acting role since September 30, 2025, was officially named permanent CFO on Tuesday. He admitted 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
Beyond the substantial charge-off disclosure, goeasy eliminated its quarterly dividend with immediate effect and confirmed it will cease buying back shares.
The firm also retracted both its fourth-quarter guidance and its multi-year financial forecast issued previously.
To remedy the LendCare situation, goeasy outlined a 6-point strategic action plan. The initiative includes scaling back auto and powersports loan originations through LendCare’s merchant partner channels. The company will also consolidate LendCare and easyfinancial into a single integrated operating platform.
Future growth efforts will pivot toward easyfinancial’s direct-to-consumer unsecured and home equity lending channels. Management also indicated it can achieve roughly C$30 million in annualized cost reductions through improved operational efficiency.
Farhan Ali Khan was named the new leader of the LendCare division.
The announcement represents the latest setback amid significant leadership instability. Former CEO Jason Mullins revealed 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 internally, now leads the company.
From the date Mullins announced his retirement in 2024, GSY shares have tumbled more than 60%.
goeasy plans to release complete Q4 2025 financial results following market close on Wednesday, March 25.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
