Home Capital Group Inc (TSX:HCG) released its third-quarter results and although they are down from a year ago, they are an improvement from Q2.
Revenue of $95 million is down 34% year-over-year while profits of $30 million are less than half the $66 million that Home Capital posted a year ago.
The company has seen a lot of issues this year and the non-bank lender has faced multiple lawsuits relating to the actions of its senior management which resulted in a lot of mistrust of the company by not only investors, but customers as well. Ultimately we saw the company lose a lot of business as customers took their money out of Home Capital and that led to a disastrous Q2 that saw the company post a net loss of over $111 million.
However, an investment and a $2 billion line of credit from Warren Buffett helped the stock regain some confidence from investors and the share price has been able to stabilize.
Home Capital has recently undertaken many changes to improve its financial position and image, including appointing new senior management, selling its payment processing division, completing Project EXPO which is expected so save $15 million a year, and it also paid off the $2 billion line of credit it received from Buffett’s company, Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B).
The company plans to get back some of the market share it lost as a result of the troubling year it’s had this year, and it plans to do this by improving service and offering competitive products.
