Home Capital announces ‘tremendous progress’

Home Capital provided an update on its business plans and provided some insight into its future in its quarterly conference call.

The alternative lender’s first quarterly earnings call following the appointment of its new CEO Yousry Bissada could likely be best described as cautiously optimistic.

Bissada kicked off the call Thursday morning by thanking Home Capital’s employees who “really rose to the occasion.” He claimed the lender has important decisions to make and that it doesn’t want to move too quickly.

Interim CEO Bonita Then followed by admitting there are challenges ahead but remained positive about the lender’s future outlook.

“We have made a tremendous amount of progress in recent months,” Then said. “Certainly challenges remain but we are now well positioned to face them.”

Home Capital flirted with disaster earlier this year after Ontario's securities regulator alleged the company failed to satisfy its disclosure obligations in a scandal about falsified loan applications that began in 2014.

The news sank Home Capital's stock and the plunge only worsened as customers pulled their deposits, a key source of funding for the alternative mortgage lender, sparking a liquidity crisis.

Home Capital was saved after it secured an emergency loan from the Healthcare of Ontario Pension Plan and then an investment and new line of credit from Warren Buffett's Berkshire Hathaway. The company also settled its case with the Ontario Securities Commission and hired Bissada, a veteran mortgage company executive.

Bissada said he plans to talk with employees, customers, brokers, regulators, investors and other stakeholders about his plans and strategic direction for the company.

Shares in Home Capital fell in morning trading Thursday after the company reported late Wednesday a loss of $111.1 million or $1.73 per share in its latest quarter compared with a profit of $66.3 million or 99 cents per share a year ago.

The results for the quarter ended June 30 included $233.7 million in costs related to the crisis and other one-time items.

MBN

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