Home Capital sees slight uptick in savings deposits while GICs bleed down
Company has $3M more in its savings accounts, GICs continue to slide lower
Home Capital Group reported a slight uptick in the amount it has in its savings accounts as of Thursday, a sign the alternative mortgage lender may have staunched its bleeding.
The company says it had $120.2 million in savings accounts as of Thursday — an increase of $3.4 million over the previous day. The Oaken Financial online banking unit had $145.2 million, a decline of $800,000.
The parent company has been experiencing a run on the bank ever since the OSC launched a probe into its disclosure practices when the company announced it had cut ties with several dozen mortgage brokers for shoddy documentation of income for mortgage applicants in 2014.
Wave of withdrawals
Home Capital makes money by taking savings deposits and loaning them out in the form of mortgages. But savers started pulling their money out of the bank in fear in recent weeks as questions arose about the company's future.
At the end of March, Home Capital had more than $2 billion in savings accounts. As of Friday, that figure was more than 94 per cent lower.
Both types of savings account are fully CDIC insured for up to $100,000.
While withdrawals from savings accounts seem to have stopped, the amount locked into GICs is still falling.
Home Capital says it had $12.347 billion in GICs as of Thursday morning. A day earlier, they amounted to $12.363 billion.
Cashable GIC's, which holders can redeem without penalty before their maturity date, fell to $146 million on Thursday, compared with $153 million on Wednesday.
The company has shaken up nearly its entire board of directors in recent weeks, adding a slew of new names to management with an aim to convey a sense of stability and experience.