TORONTO, Sept. 29 /CNW/ - As previously announced, HOMEQ Corporation (TSX:HEQ) ("HOMEQ") is in the process of applying to the Minister of Finance for its subsidiary, Canadian Home Income Plan ("CHIP"), to be continued as a federally regulated Schedule I bank to be known as HomEquity Bank. Significant progress has been made in this regard including the build-out of operating, control and compliance platforms to encompass the additional requirements of a deposit taking federally regulated financial institution. Management is confident that the required infrastructure, policies and procedures are in place for a successful launch.
HOMEQ's goal was to commence operating HomEquity Bank in the third quarter of 2009, however, the final outcome and timing of the approval of the application is at the discretion of the Minister, and Management now expects the launch to occur after the end of the third quarter. Normal operations will be unaffected because HOMEQ's existing cash resources are sufficient to last into 2010 and Management has determined that should additional cash resources be required, traditional sources of funding are more available and appropriately priced than in the recent past.
HOMEQ plans to begin paying a quarterly dividend of $0.07 per share in the fiscal quarter in which CHIP is continued as a bank.
About HOMEQ Corporation
HOMEQ Corporation earns a return from a portfolio of reverse mortgages originated by its wholly owned subsidiary Canadian Home Income Plan Corporation. As of June 30, 2009, the portfolio generating cash returns comprised approximately 7,000 reverse mortgages with an accrued value of $833 million, secured by residential properties across Canada worth approximately $2.3 billion. CHIP (www.chip.ca), has been the main underwriter of reverse mortgages in Canada since pioneering the concept in 1986.
HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ. Additional information on HOMEQ, including annual and quarterly reports can be viewed at www.homeq.ca.
Forward Looking Statements
HOMEQ Corporation from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular the anticipated dividend of HOMEQ Corporation, the establishment of HomEquity Bank, and the likelihood of HOMEQ's success in developing and expanding its business. These may be included in the Annual Reports, regulatory filings, reports to shareholders, press releases, presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies as described in HOMEQ's Annual Information Form and the Management Discussion and Analysis in its most recent financial statements, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time except as required by applicable securities laws.
SOURCE HOMEQ Corporation
For further information: For further information: Steven K. Ranson, President and Chief Executive Officer, (416) 413-4663; or Gary Krikler, Senior Vice President and Chief Financial Officer, (416) 413-4679