The Canadian Investor - Will Canadian Bank Earnings Take a Hit as the Economy Slows?

Episode Date: March 23, 2026

In this episode, we break down what goeasy’s collapse could signal for the broader Canadian economy and banking sector. We revisit past Canadian bank failures, connect them to today’s rising job losses and economic weakness, and explain why subprime lenders tend to crack first in a downturn. We also discuss whether Canadian banks could face headwinds after a strong run, and compare Goeasy to Propel to assess risks across alternative lenders. Tickers: GSY.TO, PRL.TO, RY.TO, NA.TO, CM.TO Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome back to the Canadian Investor podcast. I'm Simon Belange. I'm back with Dan. Can't We are back for one of our regular. Monday episodes and we'll be talking a bit more about financials here. So focusing more on lending, but also Canadian banks as well. So I wanted to like I started digging and I don't know why how I came through this exactly, but I came through a CDIC so the Canadian Depository Institution Corporation. Is that it? Yes, I believe so. Yeah. Okay. I'm like, I'm so used to the acronym. I'm like, Canada Deposit Insurance Corporation. Okay, so it was pretty far off.

But that's okay. So I have the website here, and I came across a history of failures for the CDIC. And for those not, you know, aware of what they do, they essentially insure deposits for depository institution. And I say depository institution. I mean, we can use the term banks if we want, but there's a lot of. of these where they were trust companies or loan companies and it's just the legal definition back then there was some different key differences but at the end of the day they took in deposits and

they issued loans I think that's just that's the big thing to remember here and it's interesting because the last failure happened in 1996 so I didn't know you know that it just took that It had been that long since the last failure happened. I don't know if you were born back then, Dan, but I guess. Oh, yeah. I was born in 90. Yeah. In 90.

Okay. You probably don't remember. I don't remember. No, I don't remember the last bank failure in Canada. No. Yeah. Anyways, I'll pose a list on the link here on the show notes for people. It's just a list with the name of the institutions.

Like I said, unless you're a bit older, you probably don't really remember of any of these names or unless you're on list. you've actually studied this. And for the... So what I started looking is the last bank to fail, like I said, was Home Mortgage Corporation in 1996. And I think it's important to know that there were 18 failures from 1990 to 96, 23 in the 1980s, and two in the 1970s.

And the period of 1990 to 96 had the highest failure per year. rate during that period. Obviously, it's a shorter than a full decade, but it definitely had the highest failure per rate compared to the previous two period. The 1980s had other sets of issues, including fraud, rising interest rates, and regional economies collapsing, which affected some of the banks that were smaller banks that were operating there. Again, I'm using that term interchangeably here. I know a lot of them were actually trust. So let's zone in on the 1990 to 96 period, because I think it's really important to try and understand what happened in these years and how it could be a sign of things to come.

Because if you go back to essentially the 1990s, the 1990 to 92 recession was arguably the worst recession outside of the COVID pandemic, which, of course, it's hard to draw any kind of conclusion with the amount of stimulus, but also how it was a Black Swan event that actually had. happened. And there are multiple reasons as to why there was a raise in failure in the 1990s, but a lot of them came down to bad secured loans. So secured loans, obviously, it's a cinnamon for asset back loans where these banks had lent money backed by commercial and residential real estate and then the value of these assets dropped and the loan started becoming delinquent and the banks took on some massive losses. And there was also a flight to safety where there was a change in legislation

that happened around that time where the larger banks were able to gobble up some of the trust, of the smaller trust, and they were seen as safer for depositors. So you saw a lot of money going to the larger banks. And there's nothing worse for a bank if you start, you know, losing depositors and then some of your loans start turning bad. And on top of that, the assets that are backing your loans are losing value. That is a recipe to go under. And clearly, that happened a whole lot in the 1990. So it was definitely a double whammy for these smaller banks. And a lot of them failed or got bought by the larger banks that, you know, the big five or six that we have. So that's why there's a lot fewer institutions now that are CDIC insured compared to back then, although the total

amount of money insured is much larger, much, much larger. So anything you want to add before I talk about why the hell I'm talking about the 1990s here? No, no, go ahead. A little history lesson. So the reason why I'm talking about that is I think it does provide insight as to what we might see coming in the years to come. And it could really impact the returns that the big banks see. because let's be honest, the big banks have been crushing it in terms, if you've been owning the big banks for what, like a year, year and a half now, you've just been like crushing it, right? Like you've, you've exceeded the returns of the index. I'm just going on memory purely, right? Even over like a five year time frame, like Royal Banks like a 110%.

It's, yeah, they've been outstanding, especially even how. Is that including dividends or not even? That would be including dividends. I'm kind of, it's like 95% price appreciation. So probably in that 110, 115% range. And national bank is probably even beyond that. Probably beyond that. Yeah. CIBC has gone on a run. Yeah. In a terrible Canadian economy as well. Yeah, exactly. And so the reason I'm kind of coming back here to go easy, because we saw massive spikes in delinquencies. And if they had reported things more transparently, and of course, we'll have more details. when they report next week, we would likely have seen an increase starting in delinquency. I would guess probably a year and a half, two years ago, because they're going to be doing some restating of their financial. I think they said 2024 and 2025, right?

So I assume that delinquency started rising back in 2024 here. And subprime lenders are usually the first to crap. You can go and see that in any major recession. They're the first to crack. The problem with Canada is just we don't have that many subprime lenders that are publicly listed. I think the only other one is propel and they do most of their business in the US, right? Yeah, like they have maybe 1 to 2% exposure in Canada. It's very minimal.

Yeah. And it's different in the US. In the US, they had a lot of subprime lenders listed, publicly listed that went under before you saw the Lehman Brothers and all the dominoes happen with the great financial crisis. And the issue with Canada, again, you can't really look at those, but go easy, I think is definitely a warning sign. And I know I went on a little bit of a rant if you saw my video about people trying to extrapolate things here in terms of, you know, oh, it's what it means for Canada and the big banks. But if we just double click here earlier, I think it was on Monday or was it last week or last Friday, I believe it was, that Canada reported a loss of 85. 4,000 jobs when expectations were around a gain of 10 or 20,000. And that was the worst non-COVID

months since the GFC back in 2009. And employment is the best indicator as to if people pay their loans or not. It's kind of hard to pay your loan if you don't have any money coming in. Obviously, it's not, you know, necessarily an exact thing because not everyone is living paycheck to paycheck and some people have savings so they'll be able to keep paying their loans. But employment is one of the biggest factors and the ability of a borer to actually pay their loan. So then you factor in the ongoing trade war with the U.S., increasing geopolitical instability around the world, rising oil prices that now is approaching $100 per barrel in terms of WTI. And I don't think any signs of going massively down until things get significant.

significantly better in the Middle East. Real estate prices facing declines, pretty significant declines in Ontario and BC, two of the biggest markets, I would say, well, the two biggest markets if you take the GTA and the GVA, Greater Vancouver area in Canada. And then Canadian households are also some of the most indebted in the world. Canada's real GDP contracted in Q4 of 2025. And there's a lot of people saying that we're essentially in a recession. We'll know it when the official data comes out for Q1 of 2026. So all this to say that, yes, the big banks add the best borrowers, but we're seeing these job losses starting to get pretty significant here. And I don't care how good of a borer you are at some point, right? Those job losses will start affecting

some of the borer her. And of course, to be clear, I'm not comparing the big banks to go easy or anything like that. Like they have much lower than delinquency rates. They're much more prudent and who would they provide loans to. But I think we may see those loan loss provisions. That kind of flatline over the last couple quarters and the ACLs also were kind of plateauing. I would not be surprised in the upcoming year in the next three, four quarters, that you, you start seeing PCL start progressively kind of ramping back up. Yes, they rammed them up pretty aggressively over the last couple years. So they have a pretty good buffer there.

But I think it's something to keep an eye on. And because they've had such a good run-up, I just, I know a lot of people own the banks. And I'm not saying to panic and sell or anything like that, but I feel like with everything that I just mentioned and the uncertainty ahead, I just think there's a pretty high chance that, you know, the banks will not be performing all that well in the next couple years. Sure, I mean, they'll probably still be paying their dividend and a lot of people own them for the dividend so they don't really care if the stock goes down. But I would expect some headwinds for the big Canadian banks in the next couple of years. That is my expectation. I know I'm probably going to get some pushback here just because I'm just, I've, not someone who owns a big bank, so people just say, oh, that's just because you don't own them. But, I mean, when you factor in all this stuff, I just talked about, perform extremely well and all the headwinds that you're seeing and the warning signs we're seeing would go easy.

And then if you kind of compare that to the 1990s, I mean, I don't know, when it quacks like a duck, it probably is a duck, right? Yeah, I mean, I don't know. I own Canadian banks. I'm not like most Canadians. I'm not like super super. I mean, I feel like some investors dedicate their entire personality to these, to these companies.

I am not that type of bank investor, but I think, I mean, I think probably like 6% of my portfolios in Royal and National. But I don't think that I don't think that GoEasy fallout has anything to do with the big banks. Like, I mean, I guess it could be a,

a precursor in a way, But like, first off, that's what I'm saying. I'm not saying it has anything to do with the big banks. I'm just saying it could be a, you know, in all the recessions, typically you see those subprime lenders being the first one to take the hit. That's, that's basically what I'm saying. And I'm saying the economy is looking like it's not getting any stronger anytime. No. But one of the like, I guess one of the main reasons why you see these companies like a go easy blow up is the fact that they just aren't regulated.

They're regulated, but they're not as regulated as. the major banks. Like, regulators would not allow a royal bank to give somebody a mortgage and then allow them to have four skipped payments a year or the whole thing where they do it, where you can just, you know, pay the interest and no principal. And you can have like, I can't even remember what that report was saying, like, Go Easy. You could do this like eight times a year with GoEasy and they still wouldn't mark the loan delinquent. Like, they have to be way more transparent. payment options. Yeah, like go easy.

You can tell that they just, well, especially on that, they either didn't know or they knew and they were just kind of hoping the environment would get better before it all came crashing down. And clearly they kicked the can far enough down the road that it came crashing down fast. But I don't know. I don't see. It could be a precursor as well, but this was also like, I don't know, go easy's basket alone.

Like it was automobiles and power sports vehicles. Like, if you think of a high-quality borrower from like an A-grade borrower who has a mortgage with a big bank, let's say they have that mortgage with a big bank and then they have a vehicle with GoEasy or a ski do with GoEasy. Like, what loan are they dropping first? They're dropping those subprime loans, which doesn't really necessarily put the bank's loan book at risk, but it puts the subprime borrowers at huge risk because, I mean, if you can think of a consumer, that's in a ton of debt, I could say the last loan, the loan with the absolute lowest priority would be the one that they have from one of these subprime borrowers. And I think that's kind of

where it all went. Or your credit card. I mean, there are credit card, yeah, percentages of the portfolio of the banks that could be at risk. I'm not saying mortgages specifically, but, you know, you're going to start doing the minimum payment or skipping credit card payments before you skip on your mortgage. So my point is that they will probably be, facing some headwinds, definitely more than they have over the last few years in the coming years, just because just the number is just the sheer number of if we keep seeing job numbers like that, that I'm not saying 84,000 every month, but if we keep seeing negative job prints, I mean, at some point it's going to start affecting even prime borrowerers with the bank. I mean, they were

prime bow borrowers when they had jobs. They're not anymore, right? But there's still clients, right? Yeah, you don't have income coming in. Yeah. I think. Yeah. So that's my point is that I wouldn't be surprised if they kind of go sideways for a little bit. It'll be interesting to see because I know they built up a lot of provisions over the last few years. And they haven't started recovering any of those.

They're just kind of staying steady now. I wonder if they've already planned for that. I mean, obviously if oil stays where it's at and the economy gets much worse and inflation creeps back up, then yeah, I could see them going up again. Yeah. I mean, you have to remember to. When did the banks report like three, four weeks ago? Or as the Iran war was breaking out or just before something like that? I feel it would have been an early February.

Yeah. So it was pre-Iran war. It was pre-knowing these job numbers. So it's very possible that they'll come out with their next earnings release and things will have shifted a little bit. Their models will have shifted because the GDP came in weaker than expected. You're seeing more inflationary pressures, probably even the economy contracting more because of high oil prices.

So that's why I'm just saying, I don't know. It just, there are all these signs that I think I will like again, I'm not saying doomsday, the banks or anything like that. I'm just saying that I think don't be surprised for the next year or two. They kind of go sideways. I would not be surprised or even see a decline. Like I'm not, it's not out the table. I think it's a, it's a perfect climate to see that.

And I think GoEasy is just a bit of a precursor for that. That's, that's all I'm saying. I mean, they had a heck of a run over the last two or three years. Like a flat year would not be surprising just from the fact that they went up, you know, 60% over the previous two. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market.

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So we've had a lot of people inquiring about, I've had the question quite a bit and I don't know the name all that well about Propel holdings. So the other subprime lender is that mostly has its loan books in the US and a little bit in the UK, I believe in Europe. Yeah. So you want to tell us if it's the next go easy or not. Yeah. So obviously if you hold Propel and one Canadian alternative lender just, just blew up and you hold the other one, you're, you're gonna, I've gotten, I mean, probably over the last week, like a dozen inquiries about like, oh, is Propel going to be the next one?

And, uh, they're very different companies. Like, they're the same to a degree and I'll go over why they're different, but two different type of companies in my opinion. And then like, Go easy situation was not an accident, certainly preventable in my opinion. Their main issue. Yeah. Like, their main issue at this point in time is they had a bunch of secured loans that weren't really secure over at their at their Lent Care subsidiary that they bought during COVID like bad automobile loans, bad recreational vehicle homes because again, last thing. I mean, they were still secured, but they were not like secure. Yeah. Well, like I say, wet paper bag.

Like it's. Yeah. You want to try reclaiming a ski do from somebody or an ATV from somebody who hasn't paid the loan. They don't really want to do that. you're not going to recover a lot of money, but ultimately dealerships, they just care about the sale, not the loan. I mean, if GoEasy will open up its wallets to lend, the sale will get done. And I had mentioned to you before we started recording, like any bank can realistically grow at whatever pace they want. Like even these big banks, if they wanted to, they could grow at 30% a year.

It wouldn't be good because, you know, you're expanding the loan portfolio like a quality basis over quantity. Well, that's what the GFC was, right? I was giving too much credit to too many people that could not afford that credit. And essentially they had teaser rates on mortgages that were low for a couple months or six months, whatever the time period was. And once the teaser rate was done, they just went through the roof and then they all defaulted on the loan. That's where the term ninja loans came about. No income, no job loans. And there's that scene that I posted in my Go Easy video from the big short movie where they,

they asked these guys like, okay, how many loans were you doing in the past? Yeah, the mortgage brokers. Oh, we were doing like, like in the month, like two, three loans. And now like we're doing 60 a month. Yeah. And one guy says like that people will probably remember the scene who's seen the movie. And the guy said, I used to be a bartender. Now I own a boat.

Yeah. It's, uh, loan like loans at all costs are like it's not really. And I mean, yeah, a lot of people are talking about going like the loan books growing at a 20% pace. Meanwhile, the banks are like the big banks, the ones who've pretty much navigated through anything imaginable are cutting lending back like massively. So again, like many people have been asking if Propel is safe from this. And I guess it's a difficult question to answer because these two companies are alternative lenders. But first off, Propel has next to no exposure to Canada, whereas Go Easy is. 100%. So I think Propel has around 2% exposure. So if we think of the potential, this is just

on a side note, the APR interest rate cap that was placed on GoEasy. Propel is not exposed to this in the U.S. and the UK, and I'll kind of tell you how it gets around this, which is, and I didn't know this before I looked into it, which is, it's wild. But the biggest difference between these two is the method of lending. So Go Easy lends off its own book effectively. So they borrow from the banks at a rate and then they lend it out directly to consumers at a higher rate. And because this is their money on the line, any unpaid loan hits their balance sheet effectively. Whereas Propel for a certain portion of the business, and I think it's around 80% or sorry, 20% of this. They do it a bit differently.

Propel is kind of a hybrid lender. So they'll loan off their own book, but they're also trying to move away from it. They have grown loans quite a bit too, huh? Oh, yeah. Not as much as go easy, but my God, it's gone from late 2021 to 134 million loan book. Obviously, loan book at the end of each quarter all the way to just shy of 600 million. Yeah. Now, the one thing is they did acquire a company in the UK.

I don't know how much that would have been like organic growth or. I don't know. It just seems like pretty steady growth when you look at the graph. But yeah. And I guess the one thing. I will say is like I've gotten a lot of questions on this company over the years and I've never touched it just because I I do not understand the alternative lending space in the U.S. or the U.K. And I found out some crazy stuff about the U.S. that'll go over. But you need to understand the lending market that you are owning these companies in.

Like that's a no brainer. But Propel is kind of around three quarters of the business is the same style of lending as Go Easy. So it's just they borrow from an institution, which I think they're trying to reduce now because they're actually, they created their own bank. So it'll get them better loans effectively to, to reloan the money. But the hybrid is that they participate in bank partner programs. So this is where the bank supplies the capital and funds the loan. So they will use Propel's AI tool, AI underwriter, to decide who gets approved or rejected. And then, Propel serves the loan. So the bank is issuing the loan. They're funding the loan. Propel is collecting the payments on the loan. And then often down the line, they're required to buy a participation piece of the loan. So this is actually where the business model, and this is where I did not know this about the U.S. space. And this is where the business model seems kind of genius. So apparently any genius and evil at the same time. Evil genius whatever it may be. But any chartered bank

in the United States can export its interest rates to other states. So Go Easy gets hit with the capped APR, the federal government, I think it was like 35% or something, wasn't it? Like you can't charge more than that. Whereas, yeah, I think yeah, it's gone down. I think you're right. It's like 35%. Yeah. Whereas Propel can get exposure to. to a loan in California where they have rate caps by simply issuing the loan from a different state. So this is kind of why I've been so cautious on, you know, a company like Propel. It's so they can get like if you think of, I'm not going to say because I don't know an exact state without rate caps, but they could go to a bank in that state.

The bank could issue a loan to somebody in California and there's no rate cap. because it comes from a different state. They call this, I can't even remember what they got export, like interest rate exports. So regulators have tried to kill this process for a very long time, but it doesn't seem like they've been able to do it. As long as the banks control the underwriting, they fund the loan with their own money and own the loan when it's first issued. They're allowed to do this.

But what they end up doing is they just sell that loan to propel after the fact. So not necessarily 100% of the loan. they might sell, you know, 95% of it. And yeah, they use Propel's tech to issue the loan and then Propel just comes in later and buys a chunk of the loan and gets the interest. So they're effectively just using the banks to dodge rate caps in particular states. So this is kind of, you know, they call it kind of lending as a service. And so these businesses are the same in a way, that being, you know, like three quarters of

Propel's loan book is that, you know, same method as. go easy, but the thing about Propel is their charge off rates have always been high. So they're always in that 14% range, whereas Go Easy was, and they talked about it all the time, they boasted the best in class charge off rates. Like they were, they're 8%. Like if you go to their pitch deck or whatever, they have all those kind of black swan events that occurred where Go Easy's charge offs never really hit that amount. And now we, we get to this point where they've come up to Propel's level really quickly.

And yeah, while Go Easy strategy has been kind of shift to a debt-heavy secured portfolio, like we've seen them go crazy on automobile loans, like second and third mortgages like helox, like Power Sports vehicles, Propel. On the other hand, it's kind of leveraging that lending as a service method. I mean, this kind of keeps a leverage down. They're collecting payments and often a kind of smaller chunk of the loan, but ultimately if the borrower fails to pay, it's kind of a blend of liability.

It's not solely on Propel. Then on the other side of that, they have the bank partner model where, again, you know, the bank issues alone, Propel buys a chunk of it and they share the liability. Yeah, it's, it's kind of been,

I guess it has more business models than go easy that are lower risks than go easy. And don't get me wrong, when I say lower risk, they're not, they're not low risk, but only around 80% of the company, 75, 80% of the company,

is exposed to the same lending practices as Go Easy. And I would argue maybe even worse off because it issues a lot of unsecured loans. Like Go Easy secured loans are not good like automobiles and whatever it may be. But it's better than a straight up unsecured loan because then you are recovering zero in the event of. Yeah. Yeah, exactly. Of default. But it does have a bit of a cushion on the lending as a service situation, all that type of stuff.

if things got, you know, if we got into deep trouble. And again, like if we got into deep trouble this thing, well, I mean, it's already drawn down 50 plus percent. Like you see you see 70, 80 percent plus drawdowns in these alternative lenders all the time. I think they're in a bit of better. I'll keep in mind to the US, like yes, the US economy is doing well, but you don't need to dig very far to see that. It's a key shape economy. Yeah. The top of the K is doing well.

The, let's say the top 10, 20 percent is doing well. and the bottom 80% of the K is not doing well. Who do you think Propel caters to? I don't cater to that top 20%, they cater to that bottom 80% of the K. So it is, yeah, I don't, I know they're not in Canada, but the reality is when you get an economy

that's as divergent as the U.S. is, they could get into trouble too. Oh yeah. Yep. The only thing is, is they're not, I guess the one advantage they have is they're not limited to what they can charge

people, you know what I mean? Because they, they don't have that. Yeah, there are some states that are no cap states. Yeah. I was just kind of looking that up and assuming AI mostly gave me good. And they can issue loans from their states. Yeah. So I mean, some have triple digits caps and some just have no caps.

Yeah. Yeah, because I mean, you could argue, you know, anybody's worth lending to if the interest rate is right. So I guess Go Easy has that limited structure now because they can't lend, you know, any more over and above the cap. But. I mean, the U.S. consumer, I guess in a way, is it probably a bit healthier than the Canadian consumer, not as indebted. But I guess for those who are asking if Propel could be the next go easy, the answer is like without question, yes.

Like, if you think. I mean, it's a subprime lender. And if we're entering that part of the cycle, that they are going to struggle. Yeah. I think the answer is as easy as that. Yeah. Any subprime lender will be facing issues. I don't care how good they're managed.

if they're the best managed subprime lender, they'll come out on the other side of it and they'll take less of a drawdown than peers. But they'll still get wrecked. Yeah, you'll still be doing having significant losses. I mean, the best ones like won't go under. I think that's probably it.

That's a big difference. Yeah, like we're down 58% from pretty much the start of 2025 high. So not as drastic as go easy. I mean, Go Easy's down more in the last couple of weeks. And over the last few years here, it's down like almost 80%, I believe. Yeah, well, that's what we were saying on Go Easy, right? Like I even, I think it was around Liberation Day, I was like having, you know, back and forth with someone on Twitter and I won't, I won't mention the name, but you know who it is. And, you know, he was saying, oh, no, this is a great time to buy it.

And for me, it was just like, if you know anything about subprime lending and in history, how. subprime lenders actually do when you get over that cycle and you start entering a slowdown. Like this is not the time to think that these companies are cheap. Because the earnings that they were doing like in the last year or two, I mean, the quality of earnings will start going downhill. And now I'm proving right in hindsight. But literally when I was saying that last year,

if they had reported things correctly, Go Easy would have shown that yes, their delinquencies were actually going. Oh yeah, they tried to kick it down the road. Like they tried to kick a can down the road. And that's what I mean by the big banks. Like they would not get away with doing stuff like that. They're too regulated.

You just would not see that type of stuff. And yeah, like. And I, yeah, this was summer of 2024. I had mentioned and I mean, I have it, the email I sent out in the video I published, like they were just growing way too fast for the environment. And like eventually, you know, that's going to catch up to you. Like like you mentioned, the quality of earnings just deteriorates to the point where, I mean, did they post a loss in 2026?

Probably. I mean, they had to outright suspend the dividends. So I wouldn't be shocked if they had negative earnings in 20. Oh, yeah, I would. I'm almost for 2025, you mean. Yeah, yeah, yeah. Sorry. Yeah.

No, no, the upcoming year. Oh, the upcoming year. I mean, I don't know if they said what their guidance. they'll probably provide the guy the updated guidance or maybe they won't even but for 2025 i'm pretty sure they'll take a loss for the year just based on the release yeah well yeah didn't they what was their net yeah because then yeah the yeah the net charge off essentially they they implied that they'll be taking a hit of like over 400 million dollars yeah so there goes all their netting yeah yeah that's a year and a half worth of the earnings that they had stated so well like

that's in the good like uh or fairyland town Go Easy style, but oh yeah, I would almost 100% guarantee it. Yeah. They're going to take a big loss. And that's, uh, that's if things don't get worse as well. Like if they report earnings and it gets even worse like yeah. These, these companies, they did very, very well for many years like post financial crisis. But I think a lot of people like these companies during bad economic cycles are,

I mean, you can go back to pretty much any crisis with Go Easy. Yes, it survived it, but it fell 70, 80, 90% during all of them. It looked like they were on the absolute cusp of going broke. So yeah, the volatility will be there. Propel is, you know, a bit different structure, but they still have, you know, three quarters of their loans are, you could argue higher risk because, I mean, they probably do have some secured loans. I didn't dig into it that deep. But from what I'm reading, a lot of them are like unsecured lines of credit. So they're even higher risk than go easy say auto loans, wreck vehicle loans. So yeah, it's definitely, there is the potential that, you know, in the event where things got ugly in the states that the exact same thing could happen. In terms of the UK, I have no idea. I didn't even get to the point where I dug into to that. of the business. I know they acquired it. I think it was a few years ago now, but yeah, it could happen. Yeah. Anything else or you want me to just move on to the last segment?

Go on to the last one. Yeah. Yeah. Okay. Sounds good. I think we've talked enough about Go Easy for, for probably a few more episodes because obviously we'll, we'll be doing an update when they report Q4, which will be next Wednesday, Thursday. 25th of March. Yeah, the 25th. So, yeah. One week today. So we'll see. Yeah. Maybe we'll have. time to do it for the Thursday release if not the Monday release after that. So make sure you stay tuned if you want to keep abreast of what the kind of tire fire is going on there. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're

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these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation ETFs at bemoetifs.com. So I got a question from Joint TCI. I do apologize. I forgot to write down the name of the member that asked, but essentially was just asking if we could have a quick look at neat.com ticker KSI.TO. It's company Braden had mentioned a while back. Market cap around 485 million. Revenue trailing 12 months around 63 million. The three year revenue growth really nice at 39%. Not profitable on an income basis, but has generated free cash flow of 18. 0.5 and 12 million, respectively over the last two full years. Again, oh, I have the name. It's from Andrew on Jointies. There you go. And it's neat specializes in electronic validation software for life sciences company. Think for highly regulated and specialized industries like pharmaceutical or

medical device manufacturing, every piece of equipment and software has to be validated to ensure that it does what it was intended to be. And those are very regulated, spaces. Essentially, it provides software that companies needs to track those validation protocol and the results. They provide an audit-ready solution for these companies. So they sit at the interception of, I guess, like quality management and workflow and regulatory compliance. So Andrew's question here was that, like, you know, could it be disrupted by AI or could it be augmented by AI? Obviously, we're seeing all of a SaaS. A lot of SaaS company just kind of getting clobbered because of AI. We've talked quite a bit about it.

So from what I read, and I don't know NEAT.com all that well, but it's unlikely to get majorly disrupted, at least in the short and medium term. First, they have regulatory modes to fall back on. So it's not impossible to penetrate, but any company wanting to disrupt them would have to ensure that it integrates well with existing system from their customer base, would need to retrain staff, and would need to get regulator's approval. because obviously it is essentially they're tracking, right? So it's really important.

And these are highly regulated spaces. And second, the system of records. So this is the system that has been in use for years by these medical companies or life sciences companies. And it's simply really risky to replace. And lastly, these companies trust the software. They know it works. They can't really afford issues.

And it's simply really too high of a risk for them. However, it's not impossible that it gets disrupted. And the real risk here that the more I dug into would be for a larger platform like Viva, which already is a trusted platform in life sciences industries, decides to make a harder push into the validation offering to their existing customer base. So they already have this available, but it's not as widely used yet. But AI could offer them ways to making the product better, much quicker than it used to. We've talked about the coding and leveraged their base to steal customer from need.

So that's really, I think, where you could see some disruption for need.com. In terms of the positive, there have been some, for example, they've been integrating AI agents into the platform and making it more automated. But it is a small company at 485 million market cap. It's not super cheap either. I think when I looked at it was trading at around 30 times expected earnings or something like that, 34. 40 times. So not super cheap on a free cash flow basis either. So there's definitely, I would say, some risk here of disruption, but they do have kind of that regulatory mouth and the fact that these life sciences company just, they can't afford for that kind of software to go wrong. So it doesn't

mean that they don't get disrupted eventually, but probably in the medium to short to medium term, they're probably going to be okay. Yeah, I think that's the issue. with like a lot of these types of companies is like you can see how they won't be disrupted over the next maybe even a year or two but then like you kind of wonder with how fast it's evolving like if that's going to be the case in in five years I don't really know this company all that well but I mean it's a relatively small market right if you have a company that's like 400 and like half a million half a billion in market cap like it's not it sounds like without knowing the space too well, it sounds relatively niche. So that's why I think it's probably more

competition from a larger player using AI to kind of just add in some offerings, right? A little bit like the Microsoft Windows way where you're, you know, you're using MS Office already. So why should, why don't you use teams over Zoom because it's already integrated with everything else? Yeah. I mean, the larger companies, obviously these critical companies would probably trust, I guess, to replace it rather than some other random piece of... Yeah, exactly. There's already that established trust and it could come down. And again, I'm not an expert in this, but you know, sometimes there's just, if a company sees, you know what, it's good enough and we're getting incentives to change. We're getting a better deal.

They're going to make it worth our while to having to train staff on it. But the training won't be that intense because our staff is already using that platform to begin with. That's when you start getting the incentive to switch. Because at the end of the day, I don't know, like, just to get back to MS Teams, and I know it's completely different space and there's not that regulatory mode. But if, I don't know if it's improved, but MS Teams is not better than Zoom. But it's good enough. I use the Google one when I have to do a meeting.

So, like, I don't even know. No, but it's just an example, right? For enterprises, like, I think it's just probably the lower cost offering it's bundled in. Is it as good? No, but it's good enough. Yeah. Just gets the job done. Yeah.

Exactly. So, no, that's about it. Any, anything else? Any questions? No. It's all I got. You good? Okay.

Well, I think that's a good spot to wrap it up. Thanks to everyone for listening. We do still have quite a bit of content in terms of news and earnings coming up next week. Obviously, go easy. It'll be a big one that will be covering. Lou Lemon, we didn't have time to cover it. But I think they had a lackluster result. that I saw them now.

I don't know. They were down. Yeah. I mean, I saw it quickly, but we'll probably touch on that next week. I'm sure, you know, the Orange Man, something's going to happen now in South that we'll have to talk about. Trump never disappoints in terms of giving us content to talk about. So make sure you tune in next Thursday and Monday. It should be an interesting one.

Thank you again for listening. And we will be back with our news and earnings at this upcoming Thursday. The Canadian investor podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.