Home Capital Group Reports Lower Q2 2022 Earnings Due to Margin Compression and Provisions
Home Capital Group Inc. (the Group) reported Q2 2022 net income of $41.3 million, an 8% decline quarter over quarter (QOQ), primarily owing to lower net interest income and an increase in provisions for credit losses, while being partially offset by lower operating expenses. Net interest margin for the Group continues its downward trend, decreasing by 21 basis points (bps) QOQ to 1.97%, driven by continued interest rate hikes by the Bank of Canada. The Group saw an improvement of 140 bps in the efficiency ratio QOQ to 50.3%, owing to a decline in operating expenses that was somewhat tempered by declining revenue.Home Capital Group is a holding company that operates primarily through its principal subsidiary, Home Trust Company, which provides insured and uninsured deposits, residential and non-residential commercial mortgage lending and consumer lending. Co. also conducts business through its wholly owned subsidiary, CFF Bank, a Canadian retail bank. Co.'s subsidiary, Payment Services Interactive Gateway Inc. (PSiGate) provides payment card services. Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.
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