Home Capital shares rise as rate of withdrawals at lender slow
TORONTO (Reuters) - Canadian alternative lender Home Capital Group (HCG.TO: Quote) said on Friday that depositors had withdrawn more cash from savings accounts that help fund its mortgage book, although the pace of exits had slowed.
Shares of the company - which plunged earlier this week as it tapped an onerous credit line - perked up 3 percent in early trade, although at C$8.25 the stock was still well below the C$18 range it changed hands prior to the deal.
Home Capital has suffered a crisis of confidence since a securities regulator alleged its top executives hid mortgage broker fraud from investors earlier this month, and has hired bankers to advise on funding and strategic options.
It secured a C$2 billion credit line from Healthcare of Ontario Pension Plan (HOOPP) on Thursday, but the pace of withdrawals raises questions about how quickly it will need to draw on that high-interest loan.
Home Capital said on Friday that around C$290 million ($212 million) was withdrawn from the company's high-interest savings accounts (HISAs) the previous day, compared to C$472 million on Wednesday.
That leaves the company with a HISA balance of C$521 million, the company said.
Total deposits in the lender's less-liquid Guaranteed Investment Certificates (GICs) stood at C$12.97 billion as of April 26, it said, little changed from the prior day's balance.
The company said its Home Trust unit had liquid assets of approximately C$750 million at April 27, compared to C$1.3 billion at April 25.
(Reporting by Alastair Sharp; Editing by Bernard Orr)
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