Home Capital Group Inc HMCBF

Primary Symbol: T.HCG

Home Capital Group Inc. is a Canada-based holding company that operates through its principal subsidiary, Home Trust Company (Home Trust). Home Trust is a federally regulated trust company offering residential and non-residential mortgage lending, securitization of residential mortgage products, consumer lending and credit card services. In addition, Home Trust and its wholly owned subsidiary, Home Bank offer deposits through brokers and financial planners, and through a direct-to-consumer brand, Oaken Financial. Its mortgage lending includes classic single-family residential lending, insured residential lending, residential commercial lending, and non-residential commercial lending. Its consumer lending loan portfolio comprises credit cards, lines of credit and other consumer retail loans. In addition, the Company manages a treasury portfolio to support liquidity requirements and invest excess capital.

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Home Capital Group Inc > Impact of Low rates

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Comment by WBuffett1on Oct 28, 2020 5:10pm

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Post# 31799949

RE:Impact of Low rates

Unlike the big 6 banks, low interest rates is actually benefitting HCG and EQB.

Their net interest margins expanded post-covid because GIC rates fell significantly but their mortgage rates only dropped a bit because of widening credit spread. In other words, they are more profitable now than pre-covid. Of course, you need to look at credit quality of their loan books too. HCG/EQB have been very successful in controlling loan losses. LTV is around 65% so a lot of equity cushion. That is why you see only sigle digit bps of actual write-offs. Also RE has been performing well too so that's additional buffer.