Fears that Home Capital Group may not be able to continue as a going concern have eased, the firm’s management says, and there is no longer “material uncertainty” over its future.
In a statement, the lender says that its current liquidity and credit facilities – including the $2 billion line of credit from Berkshire Hathaway which currently has a zero balance – is sufficient to support ongoing business “for the foreseeable future”.
“Home Capital plays a critically important role by helping deserving Canadians realize their dream of home ownership,” said Yousry Bissada, incoming president and CEO. “I am excited about the opportunity to work with the strong team at Home Capital to build on the Company’s leading position in the alternative mortgage lending market.”
The new leader set out a bold ambition for the lender as it reported a second-quarter net loss of $111.1 million and $1.73 loss per share fully diluted, compared with net income of $66.3 million and $0.99 diluted earnings per share a year earlier.
“We want to be the first choice for depositors, borrowers and brokers in the markets we serve, and over the coming months I will be fully engaged in crafting a strategy to make that happen,” added Bissada.
The firm reports that its mortgage portfolio continues to perform well, maintaining low provisions for credit losses of 0.07% as a percentage of gross uninsured loans as of June 30, 2017, compared to 0.08% a year earlier.
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