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.
For further information: Laura Lepore, Assistant Vice President, Investor Relations, (416) 933-5652, [email protected]