First National shows strong mortgage book growth

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Canada’s largest non-bank mortgage lender posted its quarterly results on Tuesday and the figures show gains in its home loan book. Mortgages under administration were up by 13 per cent in the past year to a record $87 billion (this time last year the figure was $77bn.). Mortgage originations were up by 6 per cent to $2.7 billion. Revenue though was down 3 per cent to $167.5 million and the company made a net loss of $3.5 million; down from a net income of $23.1 million in the same period last year. The lender said that the net loss was due to it securitizing more than the previous period and the surprise interest rate cut in January also led to lost revenue. However its growth in new mortgages and a rate of 64 per cent for single family mortgage renewals in the first quarter compared to the year before point to increasing strength for the business. 
  • John Martin on 2015-04-29 8:38:24 AM

    How does one have a net loss of 3.5 million dollars with the numbers they have posted. Some fancy accounting going on there. Some what border line ridicules.

  • Other Dave on 2015-04-29 9:14:26 AM

    How did they have a loss? Sounds very shady....

  • Ron Butler on 2015-04-29 10:41:40 AM

    John and Dave...... big monolines use hedging to manage their books, they cover both sides of rates up and down. Normally this simply affords safety and aims to provide additional profit to the company. Unexpected movements in Prime or big fluctuations in the bond market impact on those hedges negatively. As one executive said: up is okay and down is okay but unexpected changes suck, volatility costs millions.

    So nothing was shady, it all makes sense. There is a reason that the biggest bond trader on Earth at PIMCO stopped handling GOC bonds he lost too much money when Prime rate changed.

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