The global rating agency stated that its positive putlook reflects Home Capital’s consistently robust earnings, which have been driven by a solid net interest margin, strong income-producing asset growth, steady revenue increases across all business segments, good asset quality metrics, and stringent cost controls.

Furthermore, Fitch views the company’s capital and reserve levels as sound, which also mitigates risk.

Despite the ongoing challenges in global credit markets, Fitch noted that the Canadian market has fared better than most. Home Capital has continued to retain sufficient liquidity and possesses no direct exposure to any non-bank sponsored asset backed commercial paper or U.S. sub-prime lending. With no debt at the holding company or any term debt at Home Trust, the company has also increased its use of CMHC mortgage securitizations for funding and capital management. Fitch further noted that if the company is able to maintain solid financial performance despite the challenging macroeconomic environment that is envisioned for 2009, an upgrade of Home’s ratings would be likely.

“This positive outlook reflects our continuing ability, despite the challenges in the credit markets, to generate strong financial results while reducing the company’s risk profile,” says Gerald Soloway, CEO of Home Capital Group Inc. and Home Trust Co.

Toronto-based Home Trust is a federally regulated trust company offering deposit, mortgage lending, retail credit and payment card services.

IE