Home Capital Group Inc. Investor Day 2012
TORONTO, June 6, 2012 /CNW/ - Home Capital Group Inc. (TSX: HCG) successfully held its inaugural Investor Day yesterday, where senior management provided an update on the Company's ability to continue delivering sustainable growth and profitability.
The event featured presentations by Gerald M. Soloway, Chief Executive Officer, Martin Reid, President, and other members of the Home Capital executive team, and provided in-depth reviews of the Company's major business areas.
"We see a long period of sustained growth for Home Capital going forward," said Gerald Soloway. "We foresee a marketplace where there is demand for all of our products, and where our prudent risk management practices, proprietary lending criteria and operational efficiencies will contribute to Home's position as a leader in the lending industry."
Pino Decina, Sr. Vice President, Residential Mortgage Lending, reviewed the strong demand in the marketplace for Home Capital's residential mortgage products. By capitalizing on market opportunities, the Company will sustain its growth through steady demand for its products. Approximately 20% of the Canadian marketplace is currently underserved by larger financial institutions, resulting in a large segment of the Canadian population that requires residential mortgage financing. Home Capital has successfully focused on this niche over the past 25 years and expects that this segment will continue to grow going forward.
Home Capital's Chief Risk Officer, Kerry Reinke, discussed the Company's prudent risk management practices, including its history of careful lending and ability to align its risk-taking philosophy with its core strategy. With a focus on lower-risk borrowers, improving portfolio credit quality and solid risk management practices, the Company has maintained an extremely low level of write-offs over the past 15 years. Home Capital has adopted a conservative financial risk profile, implemented extensive, customized risk evaluation practices and controls, and instituted proactive assessments of all risk exposures, and remains well capitalized to help weather potential economic storms.
Robert Blowes, Chief Financial Officer, reviewed Home Capital's financial position and discussed balance sheet management opportunities. Home Capital continues to be a low cost operator, maintaining an efficiency ratio of approximately 30% over the last 15 years. The SAP operating platform, implemented in 2011, will support the Company's future growth without a need for commensurate additions to staff, and has already afforded the Company a number of cost savings and efficiencies. Management's focus on operational effectiveness and stringent cost containment provides Home Capital with the ability to continue delivering consistently strong returns on equity for its investors.
A review of Home Capital's commercial mortgage business was provided by John Harry, Sr. Vice President, Commercial Mortgage Lending. This segment of the business is focused on credit quality, profitability and opportunities in the marketplace. With an asset base of $1 billion, the commercial mortgage lending line of business provides the Company with a well-diversified portfolio, with low arrears and strong performance, and there is ample opportunity for future growth.
Cathy Boon, Vice President, Retail Credit Services, provided an overview of this profitable and growing business segment. Retail Credit Services provides installment financing for customers making purchases from established businesses. The portfolio consists mainly of high margin, low risk, small ticket items with diversified assets and a broad range of customers. This line of business is well positioned for further growth in the home improvement industry and water heater business.
Gerald Soloway also provided an outlook on the Canadian housing and mortgage market. "The Canadian housing market will generally remain resilient to global economic uncertainty with a balanced supply and demand across most of the country," he said. "Canada remains in a very enviable position with lower unemployment rates, continuing strong real estate fundamentals and Canadian consumers continuing to perform well in servicing their debts."
Martin Reid stated, "We feel that the Canadian real estate market will remain stable despite current economic uncertainty and that we will see solid growth across all of our business lines. We will build and maintain our position as Canada's leading alternative financial institution and we will continue to deliver solid returns for our investors."
The webcast and presentation will be archived on the Company's website at www.homecapital.com for 90 days following the event.
Caution Regarding Forward-Looking Statements
From time to time Home Capital Group Inc. (the "Company" or "Home Capital") makes written and verbal forward-looking statements. These are included in the Annual Report, periodic reports to shareholders, regulatory filings, press releases, Company presentations and other Company communications. Forward-looking statements are made in connection with business objectives and targets, Company strategies, operations, anticipated financial results and the outlook for the Company, its industry, and the Canadian economy. These statements regarding expected future performance are "financial outlooks" within the meaning of National Instrument 51-102. Please see the risk factors, which are set forth in detail on pages 48 through 58 of the Company's 2011 Annual Report, as well as its other publicly filed information, which are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors that could cause the Company's actual results to differ materially from these statements. These risk factors are material risk factors a reader should consider, and include credit risk, liquidity and funding risk, structural interest rate risk, operational risk, investment risk, strategic and business risk, reputational risk and regulatory and legal risk along with additional risk factors that may affect future results. Forward-looking statements can be found in the Report to the Shareholders and the Outlook Section in the Company's most recent quarterly report. Forward-looking statements are typically identified by words such as "will," "believe," "expect," "anticipate," "estimate," "plan," "may," and "could" or other similar expressions.
By their very nature, these statements require the Company to make assumptions and are subject to inherent risks and uncertainties, general and specific, which may cause actual results to differ materially from the expectations expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, global capital market activity, changes in government monetary and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments, competition and technological change. The preceding list is not exhaustive of possible factors.
These and other factors should be considered carefully and readers are cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any forward-looking statements, whether written or verbal, that may be made from time to time by it or on its behalf, except as required by securities laws.
Home Capital Group Inc. is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering deposit, residential and non-residential mortgage lending, securitization of insured residential first mortgage products, consumer lending, Visa and payment card services. Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British Columbia, Nova Scotia and Quebec.
SOURCE Home Capital Group Inc.
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