Canada banks have $879 million in exposure to struggling Goeasy

A pedestrian uses his cell phone on Bay Street at Front Street as the sun sets behind the CN Tower and TD building in Toronto on October 8, 2025. Photo by Peter J. Thompson/National Post

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Canadian banks have about $879 million in loan exposure to struggling subprime-lender Goeasy Ltd., according to calculations based on the firm’s latest financial filings.

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Goeasy shocked investors three weeks ago by suspending its dividend, withdrawing its financial outlook and disclosing about $331 million in net charge-offs for the fourth quarter, with credit deterioration concentrated in its troubled LendCare auto-lending unit. The firm reported earnings Tuesday after delaying the release by almost a week.

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TD Cowen analysts led by Mario Mendonca dug into Goeasy’s disclosures, noting that there is heightened industrywide concern about private-credit exposure. While the big banks are lenders to Goeasy, the analysts said in a report Wednesday, they’re unlikely to suffer losses as they don’t have exposure to the company’s borrowers themselves.

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“All exposure is to Goeasy as a firm, whose shareholders are first in line to absorb losses,” the analysts wrote.

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There’s insufficient detail in the filings to tally each bank’s exact exposure, they said, but overall bank lending to Goeasy includes $177 million in a revolving loan, with all of the country’s big six banks taking part in that lending syndicate.

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The subprime lender also has $89 million in a facility secured against customer loans and $613 million in a temporary credit line used to fund loans before they’re sold to investors. Banks no longer consider LendCare auto loans as collateral for the latter facility.

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“We view this positively for the banks as it shows they have the capacity to negotiate with Goeasy to secure early repayment and reduce exposure to Goeasy’s weakest credit areas,” the TD analysts wrote.

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Last week, Goeasy said it had won concessions from its lenders to keep its funding lines open after losses tied to LendCare briefly left the firm out of compliance with leverage requirements.

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