Q1 AUM HCG vs EQBAdjust for the 300 million+ of excess capital and you get 15% ROE for HCG based on your numbers.
Sure, but that capital sitting in the bank earning 1% is not deployed and is not leveraged up to be earning 15% ROE
Either way, HCG should be trading at a much narrower discount to EQB if any at all.
You are long HCG and have no shares of EQB so you're probably not objective. I own both but admittedly prefer EQB by a bit.
On the asset deployment front:
Home Capital Q1 growth:
Loans under admin Q1 2020 /Q4 2019: 23036283 / 22955512 = 0.3% growth
Equitable Q1 growth: Loans under admin Q1 2020 /Q4 2019: 31496058 / 31123254 = 1.2% growth It would appear that EQB's loans under admin grew 4x as quickly as HCG's, despite HCG having a lot of excess capital.
This furthers my thoughts that there are constraints to rapidly deploying that capital, and just assuming it can be done rapidly may not be accurate.
I appreciate the back and forth! This is more in depth than shallow discussions that are not enlightening.
I had not looked at those comparative numbers above before, but our discussion prompted me to do so, and it proved of some value.