Home Cap­i­tal’s new CEO Bis­sada strives to rule out cul­ture shock

On his first day, he ad­mits his ‘chal­lenge’ is to put tur­moil be­hind the mort­gage lender

The Hamilton Spectator - - CANADA & WORLD -

TORONTO — The new CEO of Home Cap­i­tal Group says en­sur­ing the com­pany, which nearly col­lapsed ear­lier this year, has the right corporate cul­ture is crit­i­cal to its fu­ture.

In his first day on the job Thurs­day, Yousry Bis­sada said while the lender’s core ex­ec­u­tive team is strong, there is still much to be done to re­build its busi­ness.

“We still have a lot of hard work ahead of us, but it is go­ing to be a dif­fer­ent kind of chal­lenge,” Bis­sada told a con­fer­ence call to dis­cuss the com­pany’s sec­ond-quar­ter re­sults.

“We’re in a po­si­tion where we can look for­ward and make fresh de­ci­sions about the kind of com­pany we want to be.”

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 for the com­pany.

“There are ex­cel­lent peo­ple here — peo­ple who know this mar­ket and know how best to serve it,” he said.

Late Wed­nes­day, Home Cap­i­tal re­ported 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.

In its out­look, Home Cap­i­tal said it is fo­cused on strength­en­ing its fi­nan­cial po­si­tion and re­turn­ing its lend­ing and de­posit-tak­ing to a more nor­mal level.

It said it plans to fo­cus on guar­an­teed in­vest­ment cer­tifi­cates and term de­posits, while de­mand de­posits are likely to re­main weak.

Home Cap­i­tal also raised con­cerns about pro­posed changes to mort­gage lend­ing rules that it says could hurt its busi­ness.

It said if they are im­ple­mented as pro­posed, the mea­sures could re­duce, pos­si­bly ma­te­ri­ally, the size of the unin­sured mort­gage mar­ket avail­able to the com­pany and others like it.

The Of­fice of the Su­per­in­ten­dent of Fi­nan­cial In­sti­tu­tions has rec­om­mended a new stress test for all unin­sured mort­gages as well as ex­pressly pro­hibit­ing co-lend­ing ar­range­ments that are de­signed or ap­pear to be de­signed to cir­cum­vent reg­u­la­tory re­quire­ments.

FRANK GUNN, THE CANA­DIAN PRESS

Thurs­day was Yousry Bis­sada’s first day on the job as CEO of Home Cap­i­tal. “We still have a lot of hard work ahead of us,” he says.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.