“We maintained stringent operating expense control in the quarter despite the additional costs we are carrying to prepare to become a Schedule I bank,” says Ed Gettings, CEO of Street Capital
Group Inc. “We feel that we are well-positioned to receive our bank license in the short-term and look forward to broadening our retail lending platform.”
The CFF Bank purchase, worth about $15-million, adds about $1.4-billion in loans and $235-million in assets to Toronto-based Home Capital, from the Oakville, Ont.-based bank from Canadian First Financial Group.
The deal “represents a major step towards realizing our long-term plan to achieve greater funding diversification,” for the company’s operating unit, Home Trust
, said Home Capital Chief Executive Officer Gerald Soloway.
Group released its Q2 financial results this week, showing significant revenue gains that were attributed to a 46 per cent increase in new originations and renewal volume, double the numbers the same quarter a year ago.
Those big numbers were part of a “stringent operating expense control” as Street Capital
transitions to schedule 1 status.
A schedule 1 banking designation provides lenders like Home Capital and Street Capital
with the ability to accept deposits and have those deposits eligible for insurance by the Canada Deposit and Insurance Corp., like the country’s largest lenders.
With the recent purchase of CFF Bank by Home Capital Group, there appears to be an industry shift to transitioning schedule 1 banks into the mortgage channel.