TORONTO, Home Capital Group Inc. (TSX: HCG) has terminated its president and CEO Martin K. Reid, effective immediately.
The Toronto-based mortgage lender made the announcement after markets closed Monday.
"Home Capital requires leadership that can bring to bear a renewed operational discipline, emphasis on risk management and controls, and focus on improving performance,'' Kevin P.D. Smith, chair of Home Capital's board of directors, said in a statement.
Reid, who had been appointed CEO just over a year ago, declined to comment on his termination.
The announcement comes as Home Capital finds itself confronting declining stock value and earnings as well as scrutiny from Ontario's securities regulator.
Last month, the company said it had received an enforcement notice from the Ontario Securities Commission relating to its disclosure in 2014 and 2015 that some loan applications had been falsified and that remedial steps, including the suspension of brokers, have been taken.
Home Capital reported net earnings for the 2016 fiscal year of $247.4 million, down from $287.3 million the year before. Its stock is also down about 20 per cent from a year ago.
Reid has also been removed from the boards of directors of the company's subsidiaries, including Home Trust
Bonita J. Then, a member of Home Capital's board of directors, will serve as interim leader while the company searches for a new full-time replacement.