An alternative lender’s funding problems and intensified fear about the housing market’s stability have made themselves felt in Canada’s banking stocks.
Home Capital Group Inc. has been buffeted by multiple crises including a regulatory probe into its disclosures. The lender said it had hired bankers to help it acquire funding for its hemorrhaging coffers and evaluate its strategic options.
“It’s a crisis affecting a company which happens to be operating in the mortgage market,” TD Securities chief macro strategist Fred Demers said, as quoted by Reuters.
Demers quickly added, however, that there was little risk of a domino effect that characterized the 2008-09 financial crisis.
The developments have led to a noticeable decline in the nation’s benchmark stock last Thursday (April 27). Toronto Stock Exchange’s S&P/TSX composite index dropped by 0.91 per cent or 143.07 points, ending at 15,506.47. Crucially, 7 of the index’s 10 most significant declines were financial stocks, with the financial sector as a whole sliding down by nearly 1.7 per cent.
of Canada declined 1.9 per cent to $93.66, and Toronto-Dominion Bank lost 2.4 per cent to $64.17. Meanwhile, Bank of Nova Scotia
fell 2.7 per cent to $75.31.
seeks line of credit as deposits, shares plummet
Home Capital announces leadership shakeup