TORONTO, Oct. 16, 2017 /CNW/ - Home Capital Group Inc.
("Home Capital" or "the Company") (TSX: HCG) today announced it has
entered into an agreement with a third party to sell the Company's
payment processing and prepaid card business including its Payment
Services Interactive Gateway (PSiGate) subsidiaries. The
Company previously announced it had determined to exit these
businesses with its Q2 2017 financial results.
"This sale reflects our commitment to focus on our core lending
and deposits business to drive future long-term growth," said
Yousry Bissada, President and Chief
Executive Officer, Home Capital.
The Company expects approximately $20
million in annual salary and other operating cost savings,
as well as a corresponding reduction in fee and other income of
approximately $18 million, from
exiting these businesses. The resulting impact to net income on a
full year basis is insignificant. The Company does not expect any
significant costs to complete the sale transaction.
Additionally, as part of the agreement, Home has agreed to enter
into a transition services agreement and will continue to provide
services for certain clients for up to a year, at which time Home
Capital will have completely exited this business line.
This sale is expected to close in 2017, subject to receipt of
necessary third party approvals and customary closing conditions.
Raymond James acted as financial
advisor to Home Capital in connection with this transaction.
Caution Regarding Forward-looking Statements
This press release contains forward-looking information within the
meaning of applicable Canadian securities legislation. Please refer
to Home Capital's 2016 Annual Report, available on Home Capital's
website at www.homecapital.com, and on the Canadian Securities
Administrators' website at www.sedar.com, for Home Capital's
Caution Regarding Forward-looking Statements.
About Home Capital Group Inc.
Home Capital Group Inc. is a public company, traded on the Toronto
Stock Exchange (HCG), operating through its principal subsidiary,
Home Trust Company. Home Trust is a federally regulated trust
company offering residential and non-residential mortgage lending,
securitization of insured residential mortgage products, consumer
lending and credit card services. In addition, Home Trust offers
deposits via brokers and financial planners, and through its direct
to consumer deposit brand, Oaken Financial. Home Trust also
conducts business through its wholly owned subsidiary, Home Bank.
Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British
Columbia, Nova Scotia,
Quebec and Manitoba.
SOURCE Home Capital Group Inc.