Home Capital names veteran as new CEO
Established mortgage industry worker to rebuild credibility
A veteran of the Canadian financial services and mortgage industry has been appointed the next CEO of Home Capital Group Inc., which is working to restore investor and customer confidence after the company appeared to be on the brink of collapse earlier this year.
Yousry Bissada, 57, will join the Toronto-based alternative mortgage lender on Aug. 3.
The announcement comes three weeks after Home Capital earned a vote of confidence from famed American billionaire Warren Buffett, whose Berkshire Hathaway is investing in the company and providing much needed funding.
Berkshire Hathaway has agreed to buy up to $400 million in stock — about 39 per cent Home Capital’s total equity — and provide a $2 billion line of credit to offset cash that Home Capital customers have withdrawn from their savings accounts.
One of Bissada’s top priorities will be to select a new chief financial officer as Home Capital, the country’s largest supplier of alternative mortgages, undergoes sweeping changes to its senior management team and board of directors.
“We want to be the first choice for depositors, borrowers and brokers,” Bissada said in a statement Wednesday.
During the 1990s, Bissada had executive roles in mortgage operations at CIBC and TD Canada Trust. He was CEO of Filogix, a software and service provider to the mortgage industry, from 2000 to 2007. Since 2011, he has been CEO of Kanetix Ltd., a technology company that operates an online platform for insurance quotes.
He also serves as a director of Equity Financial Holdings Inc., another non-bank mortgage provider.
And Bissada is a past chair of two mortgage lenders, Canadian Financial Corp. and Paradigm Quest Inc.
Brenda Eprile, who has been chair of Home Capital’s board of directors since May, said that Bissada has proven his ability to balance an entrepreneurial culture with operational and regulatory discipline.
“These are precisely the characteristics we see driving our future success,” Eprile said.
In a research note, DBRS said it views Bissada’s experience with operations as a positive given Home Capital’s recent issues.
“With this important appointment, DBRS will look for the new CEO to articulate a strategy that will repair the group’s relationships with both the mortgage and deposit broker community, rebuild profitability and address HCG’s ability to source funding at competitive market rates,” the debt-rating agency said Wednesday.
Home Capital required an emergency $2 billion line of credit from the Healthcare of Ontario Pension Plan in April after its customers started withdrawing their savings, which the company uses to fund its mortgage lending.
That came after the Ontario Securities Commission alleged that the company had misled investors in its handling of a scandal involving falsified loan applications.
Home Capital agreed to settle both the OSC case and a class-action lawsuit filed by investors, prior to Berkshire’s investment.
The allegations by the OSC sent Home Capital’s shares tumbling. They have bounced back but are still down more than 50 per cent for the year.
The shares fell 1.37 per cent or 20 cents to close at $14.39 on the Toronto Stock Exchange on Wednesday.