Goeasy flags rising auto loan write‑offs
Canadian subprime lender Goeasy reported elevated write‑offs in its vehicle finance arm and warned bad‑debt levels will persist before improving — a red flag for nonprime portfolios. The update underscores continued credit stress in the retail auto subprime segment. (x.com)
goeasy disclosed an incremental Q4 2025 charge-off of approximately C$178 million against gross consumer loans receivable of C$5.5 billion and a related C$55 million write‑down, bringing total company net charge‑offs in the quarter to about C$331 million. (goeasy.investorroom.com) The losses stemmed mainly from LendCare’s merchant‑originated auto and powersports loans, where management said intensified collection efforts exhausted recoveries and it uncovered flaws in historical payment reporting. (bloomberg.com) goeasy now expects its full‑year 2025 net charge‑off rate to be about 12.9% and forecasts annual net charge‑offs rising into the “mid‑teens” for 2026 before an anticipated improvement in 2027. (ainvest.com) The company increased its allowance for expected credit losses (rate rising from 7.81% to 9.57% as at Dec. 31, 2025) and recorded a net change in allowance of C$71.9 million in Q4. (newswire.ca) Capital and governance moves included withdrawing its Q4/three‑year guidance, suspending the dividend and share repurchases, seeking covenant waivers from lenders, and tapping unsecured debt markets to shore up liquidity. (bloomberg.com) Market reaction was severe: goeasy shares plunged roughly 60% in the immediate trading days after the disclosure, and the firm set an April 1, 2026 Q4 earnings call to discuss next steps while rolling out a six‑point action plan to scale back risky auto/powersports lending and integrate operations. (bloomberg.com(goeasy.com))
