* Savings deposits fall to about C$128 million
* Sources say planning C$2 billion asset sale
* Shares rise as much as 20 percent
(Adds share price, further details)
By Matt Scuffham
May 11 Canada's biggest non-bank lender Home
Capital Group Inc on Thursday published data showing
the rate at which depositors were withdrawing funds was slowing
and its shares rose by as much as 20 percent.
Home Capital said its high-interest savings deposits were
expected to have fallen to about C$128 million following the
completion of Wednesday's settlements, down from a balance of
C$134 million the day before and C$192 million at the start of
The company is looking to divest about C$2 billion in assets
to help pay down a high-interest loan and delay a potential sale
of the entire company, according to people familiar with the
Shares in Home Capital rose as much as 20 percent to C$10.50
on Thursday, having previously lost more than 80 percent of its
value since March 27.
The stock has doubled in value since the start of the week,
as investors digested moves to stem a flow of customer
withdrawals. It pared some gains to trade up 17 percent at
C$10.25, the highest level since April 26.
Depositors have withdrawn more than 93 percent of funds from
Home Capital's high-interest savings accounts since March 27,
when the company terminated the employment of former Chief
Executive Martin Reid.
The withdrawals accelerated after April 19, when Canada's
biggest securities regulator, the Ontario Securities Commission,
accused Home Capital of making misleading statements to
investors about its mortgage underwriting business.
The company, which is set to report its results after
markets close on Thursday, has said the accusations are without
merit. The OSC will hold a further hearing into the matter on
Home Capital relies on deposits from savers to fund its
lending to borrowers, such as self-employed workers or newcomers
to Canada, who may not meet the strict criteria of the country's
Last month, the company agreed to receive C$2 billion in
emergency funding from the Healthcare of Ontario Pension Plan
(HOOPP). It has so far drawn down C$1.4 billion from that
Home Capital said on Thursday its liquid assets stood at
C$1.02 billion at the end of Wednesday, which, combined with the
funds not drawn down on the HOOPP credit facility, gives it
access to available liquidity and credit capacity of C$1.62
Customer deposits of up to C$100,000 are guaranteed by the
Canada Deposit Insurance Corporation.
($1 = 1.3705 Canadian dollars)
(Additional reporting by Arathy S Nair in Bengaluru; Editing by
Saumyadeb Chakrabarty and Nick Zieminski)