Home Capital CEO Yousry Bissada claims his company “is back,” as the firm saw its net income rise 13% to $34.6m in the first three months of 2018 from the previous quarter. However, the latest result is a 40.4% drop from the $58m net income in the first quarter of 2017.
Bissada’s statement comes after a rough 2017 for the company, when it saw rapidly depleting deposits as it faced allegations from the Ontario Securities Commission that it misled investors in 2015. Last June, Home Capital and three of its former executives agreed to shell out over $30m to reach settlements with regulators and investors over allegations of misleading shareholders about mortgage fraud.
Home Capital saw total mortgage originations reach $1.16bn for the period, up by 32.9% from $872.bn in fourth quarter of 2018. The figure is still a far cry from $2.35bn total mortgage originations in the first three months of 2017.
“We delivered growth in our residential and commercial lending business as result of our constant focus on improving our service to brokers and customers while building a sustainable risk culture,” Bissada said in Home Capital’s latest financial report.
Total loans of $15.22bn were 1% higher than the previous quarter, but were still an 18.1% drop from $18.58bn at the first quarter of 2017.
Single-family residential mortgage originations reached $869.7m, compared with $566.0m in the previous quarter and $1.71bn in the first three months of 2017. Multi-unit residential mortgage originations were $104.9m compared to $194.8m the previous quarters and $294.8m a year before. Non-residential commercial mortgage originations, which include store and apartment mortgages, were $184.7m compared to $111.2m the previous quarter and $338.4m a year before.
"Looking forward, we are ready to grow. Our capital and liquidity position provides flexibility to be competitive in our markets. As we work towards building shareholder value, we are following a responsible growth strategy to be the leading Canadian Alt-A lender, leading in service, technology and market share,” said Bissada.
Troubled lender back from the brink
Home Capital logs 2.1% rise in Q4 net income