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

Hawthorne Park decision could come from Surrey City Council tonight

Failed petition will be presented to municipal politicians

Information flows following White Rock’s water-utility-price agreement

Critics ‘have egg on their face’ following announcement, says mayor

Former Langley roadbuilder faces fraud sentencing

A judge will weigh the fate of Matthew Brooks, who pleaded guilty to a $6 million fraud.

Delta staff to review ice arena refrigeration systems

Safety check comes after an ammonia leak killed three people at Fernie Memorial Arena on Oct. 17

Police warn of ‘virtual kidnapping’ scam

The targets are generally female Chinese nationals.

WATCH: Speedskaters race at Langley Sportsplex

The first big local meeting of the season drew 105 skaters.

B.C. NDP convention set for Victoria

Premier, federal leader Jagmeet Singh to add energy

Silver Creek farm search expands north

RCMP were seen collecting evidence three kilometres north of the farm where human remains were found

Surrey francophone group marks 30th anniversary with concert, exhibit

Montreal-based jazz singer Florence K will perform at Surrey City Hall theatre

Development cost charges could triple in parts of Metro Vancouver under new proposal

Utilities commission chair says rates aren’t keeping up with growth

Ferries re-routed due to fluid spill at Nanaimo’s Duke Point

At least one sailing from Tsawwassen to Duke Point was redirected to Departure Bay

‘Angels’ help save life of Langley senior

Wilf Driedger believes he wouldn’t be here today if not for the quick action of two strangers

Chilliwack homeless camp dismantled on Monday

Mostly co-operative group emerged from the woods with possessions and dispersed

Most Read