Home Capital Group Inc. said clients continue to pull their demand deposits from the alternative mortgage lender’s subsidiary, with $29o million in withdrawals from high interest savings accounts on Thursday alone.
What exactly is Home Capital and why is it so important to the mortgage industry?
Here’s a look at the company, its role in the Canadian mortgage landscape and how the discovery of fraud among its brokers two years ago continues to have ripple effects today. Read on
That’s on top of the $472 million drop in demand deposits — which help Home Capital fund mortgage lending — at its subsidiary Home Trust on Wednesday, the Toronto-based company said in a statement, as concerns mount about the company’s ability to fund its operations going forward.
Shares of Home Capital rose nearly 34 per cent on Thursday to close at $8.02 in late trading in Toronto, partially recouping the 65 per cent it lost on Wednesday. Friday morning, the shares fluctuated from a high of $8.52 to a low of $7.71.
Home Capital expects to have $521 million in high interest savings account deposit balances on Friday, after the settlement of Thursday’s transactions. That’s down 63 per cent from the $1.4 billion it stood at on Monday.
A spokeswoman for the Office of the Superintendent of Financial Institutions told the Financial Post in an email on Thursday that it is “continuing to monitor the situation closely.”
Is Home Capital Group's GIC CDIC insured for $100,000 limit?
http://business.financialpost.com/investing/home-capital-benches-two-key-players-facing-ontario-watchdogs-allegations-after-stock-plunges
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