Home Capital says former RBC exec will replace founder on board; stock up

Home Capital adds former RBC exec to board

TORONTO — Home Capital Group Inc. (TSX:HCG) is adding a former Royal Bank of Canada executive to its board, replacing company founder Gerald Soloway, in a bid to renew its leadership and boost investor confidence.

Shares of the Toronto-based mortgage lender were up 3.7 per cent to $6.23 on Friday after the appointment of Alan Hibben was announced.

“This is the start of our governance renewal,” board chairman Kevin Smith said in a news release, adding that more changes are coming.

“We have made considerable progress in identifying new candidates for the board and in our search for a new chief executive officer. The new CEO will in turn be involved in the hiring of a new chief financial officer, providing a major refresh in our corporate leadership as part of the process of rebuilding the company.”

Home Capital’s share price has been under pressure in recent weeks as the company grapples with a loss of deposits following allegations from Ontario’s securities watchdog.

Customers have been pulling their money out after staff at the Ontario Securities Commission alleged that Home Capital, Soloway, former CEO Martin Reid and current CFO Robert Morton misled investors in their handling of a scandal involving falsified loan applications.

The company has said that the allegations are without merit and has vowed to defend itself. Lawyers for all three men did not respond to a request for comment on Thursday. Reid declined to comment several weeks ago when the OSC first announced the allegations.

The OSC has scheduled a June 2 hearing to deal with that matter.

Home Capital has secured a $2 billion line of credit from the Healthcare of Ontario Pension Plan to help make up the lost capital.

Veritas analyst Mike Rizvanovic says bringing in someone as credible as Hibben is a small positive, but noted Home Capital is still dealing with an outflow of the cash it uses to fund lending.

“We can’t say that bringing new people in is going to necessarily stem the outflow of deposits,” Rizvanovic said.

“It’s not like you bring this individual in and then suddenly they’ve got their access back to the deposit market. It’s way too early to know that.”

Hibben’s resume includes experience as head of strategy at Royal Bank and managing director of mergers and acquisitions for RBC Capital Markets until his retirement from the bank in 2014.

Since retiring from RBC in 2014, Hibben has been an independent financial adviser and a director of several companies. He was appointed last year to the board of trustees for OPTrust, which manages funds for an Ontario public-sector pension plan.

Home Capital announced last week that Soloway would step down from the board of directors once a replacement is found.

Alexandra Posadzki, The Canadian Press

Just Posted

Outbreak affects eight people in Vernon

UPDATE: Gastrointestinal illness reported at Vernon Jubilee Hospital

Military service honoured for Vernon captain

Lisa Devine presented with Canadian Forces Decoration clasp.

Help RCMP lock out auto crimes

With the holiday season here, RCMP urge people to protect their valuables and vehicles

Ice fishing returns to Lake Country

The annual Learn to Ice Fish event takes place at Beaver Lake

Women and families in need of a holiday hand

Vernon Women’s Transition House Society collecting donations and funds

Christmas tradition goes back in time

Emmanual Baptist Church’s eighth annual Bethlehem Star production a hit

Bomb detonated in Kamloops neighbourhood

Kamloops RCMP are investigating after an improvised explosive device was detonated Wednesday morning

No More Shootouts: Strong defence will be Canada’s backbone at world juniors

Head coach doesn’t want a situation where a hot goalie or a lucky bounce can determine a team’s fate

‘Assemble your own meal’ kits grow into $120M industry in Canada

Kits offer a middle ground between eating out and grocery shopping

Millennials closing in as B.C.’s biggest wine drinkers

Generation X leads the way in current consumption of B.C. wine, as more wine drinkers are enjoying local varietals

Canadians lag behind Americans in giving to charity

Only one-in-five Canadians donated to charities in 2017

B.C. children adoption rates lagging, despite increased funding: watchdog

More than 1,000 children are still waiting to be adopted, new report shows

Hurdles ahead for Sicamous off-road vehicle bylaw

RCMP, ICBC and province not yet on-board with district

FortisBC to lower natural gas rates in 2018

Rate changes to impact the Lower Mainland, Kootenays, Interior and Vancouver Island

Most Read