Canadian Banks Hold C$880 Million Exposure to goeasy
Major Canadian banks hold C$880 million in exposure to goeasy as the lender faces financial stress. Analysts say the risk is not a major headwind for the banks.
Major financial institutions in Canada maintain an exposure of approximately C$880 million ($634.33 million) to GOEASY LTD, a non-prime consumer lender currently facing financial headwinds. According to a report from TD Cowen, the country's largest banks are linked to the lender through several credit facilities and secured loan arrangements.
The exposure comes as goeasy recently surprised market observers by withdrawing its financial forecasts, cutting its dividend, and taking a charge-off due to rising weakness in its loan book, specifically within its automotive and powersports financing divisions. Despite these setbacks, the company recently announced it had secured necessary waivers from its lenders regarding certain financial covenants for the fourth quarter.
