Home Capital recovery slower than expected, CEO says

The chief executive of Home Capital Group Inc. says restoring loan growth at Canada’s largest non- bank mortgage lender is taking longer than planned, and management’s top priority is to beef up training and technology to meet industry demands and improve results.

“The mortgage community, the mortgage brokers, have been very supportive. ... They’re ready to send business to us,” Yousry Bissada said in an interview with the Financial Post on Wednesday.

“We will do that … when we feel we can meet their demands.”

Home Capital hasn’t fully recovered from the regulatory and financial crisis that rocked the company this year, as third- quarter results released late Tuesday revealed significant lost market share on the residential lending side of the business.

Total mortgage originations in the quarter also plummeted to $ 385 million from $ 2.54 billion a year ago.

Home Capital reported net income of $ 30 million ( 37 cents a share) compared to $ 66.2 million ($ 1.01) a year earlier.

“The most important thing was stabilizing our liquidity and getting our deposits in a position so that we could carry on with our business of lending,” Bissada said, adding that the comfort level that the company could “turn the tap on or off like we used to” was reached only about eight weeks ago.

A couple of forays into the market in July and September convinced him to make additional training and technology a priority.

“Some parts of our business were providing excellent service, turning around deals in one day or less, 24 hours or less, which is what our brokers expect and deserve with their clients,” said Bissada, who was tapped to lead the company in July.

“Other areas, we were not as quick as we would have liked.”

Still, the Toronto- based mortgage lender is in better shape than in May, when it warned that uncertainty around funding had cast “significant doubt on the company’s ability to continue as a going concern.”

Home Capital shares rose 3.34 per cent to close at $ 14.85 in Toronto on Wednesday.