TORONTO (Reuters) - Canadian alternative lender Home Capital Group HCG.TO said on Friday that depositors had withdrawn more cash from savings accounts that help fund its mortgage book, although the pace of exits had slowed.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Home Capital said on Friday that around C$290 million ($212 million) was withdrawn from the company’s high-interest savings accounts (HISAs) the previous day, compared to C$472 million on Wednesday.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