Goeasy Ltd. GSY-T, a personal lender for subprime borrowers, shocked investors by announcing surging loan losses and suspending its dividend on Tuesday, sending its shares tumbling 57 per cent.
Based in Mississauga, Goeasy made its name by lending to lower-quality borrowers during a credit boom fuelled by ultralow interest rates. Between 2015 and 2025, the company’s shares soared more than 1,000 per cent and investors salivated over Goeasy’s breakneck loan growth coupled with 11 consecutive years of dividend hikes.
Lately, though, there have been growing concerns about the quality of Goeasy’s loans – speculation that stemmed, in part, from a short seller’s report in September that raised suspicions about underwriting standards. The company categorically denied and refuted the report’s characterizations and conclusions.
There is also a growing chasm in the current K-shaped economy, with high-middle-class and wealthy consumers benefitting from frothy stock markets and lower unemployment rates, while lower-income workers and newcomers to Canada are struggling as the job market worsens and financial opportunities remain out of reach.
Goeasy’s customer base is firmly in the latter camp, with an average age of 43, an average individual gross income of approximately $62,000 a year and a median credit score of 590. In 2024, its last full year of results, the company reported a weighted average annual interest rate of 29.3 per cent for all its loans.
On Tuesday, Goeasy said it will book an incremental $178-million charge for bad loans when it reports fourth-quarter earnings for 2025 at the end of the month, as well as a $55-million writedown for loan interest and fees.
The company also withdrew the fourth-quarter business outlook it had previously reported and its three-year financial forecast. Adding more uncertainty, Goeasy suspended its quarterly dividend – one year after hiking the dividend by 25 per cent to $1.46 per share each quarter.
“We expect pressure on net charge offs and higher delinquency reporting for the coming quarters, before an anticipated improvement in 2027,” chief financial officer Felix Wu said in a statement. Net charge offs are a financial industry term for loan losses.
The root of the deteriorating outlook is a division called LendCare that Goeasy acquired in 2021 for $320-million. To fix the division, the company has appointed a new head, Farhan Ali Khan, a former investment banker at RBC Dominion Securities who joined Goeasy in 2020.
Goeasy also pledged to reduce loans from LendCare’s auto and powersports arms. When Goeasy acquired LendCare, the company cited a desire to move into automotive financing, and shortly after the deal, Goeasy launched a program to assist subprime borrowers purchase and finance a vehicle.
As for recreational products, LendCare markets “accelerated approvals and flexible payment plans” on its website to “make it easier than ever to purchase RVs, Sea-Doos, snowmobiles and everything in between.” The company has partnerships with manufacturers including BRP Inc. and Armada Marine, which makes pontoon boats.
Goeasy also reported an issue pertaining to its reporting methods on Tuesday. Going forward, the company said, it will change its reporting methodology because certain customer payments were being recorded as received while they were, in fact, in the process of being settled at month end, “some of which were ultimately not collected, and also impacted the company’s reported delinquencies.” However, Goeasy said the change is “not material.”
The company’s financial turmoil follows a bout of management upheaval. In July, 2024, chief executive officer Jason Mullins announced his plans to retire after 14 years with the company, which kicked off a CEO search. In March, 2025, Dan Rees, the former head of personal banking at Bank of Nova Scotia, was named as the new CEO.
Yet in December, Goeasy said Mr. Rees was leaving because of a blood disorder, and announced Patrick Ens, an internal candidate, as his replacement. Mr. Enns was previously president of Capital One Canada and joined Goeasy in 2024.
In all, since Mr. Mullins said he would retire in 2024, Goeasy’s shares are down 73 per cent. The company’s largest shareholder is Donald Johnson, a former Bank of Montreal executive who served as Goeasy’s board chair from 2000 to 2018. He owns 2.9 million shares, or 18 per cent of the company.
Goeasy underwrites its largest share of loans in Ontario, with the province comprising 41 per cent its portfolio. Alberta ranks second, with 17 per cent of total loan values.