Home Cap­i­tal names veteran as new CEO

Es­tab­lished mort­gage in­dus­try worker to re­build cred­i­bil­ity

The Hamilton Spectator - - BUSINESS - DAVID PADDON TORONTO —

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.

FRANK GUNN, THE CANA­DIAN PRESS

Home Cap­i­tal Group Inc. new CEO Yousry Bis­sada. Firm now has the fi­nan­cial back­ing of Warren Buf­fett, too.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.