Very strong S&P Global Ratings risk-adjusted capital ratio, albeit declining Strategic focus and residential nonprime mortgage sector expertise Substantial market share in the niche, nonprime mortgage segment of the Canadian market Concentrated exposure to the riskier nonprime segment of the Canadian mortgage market makes the company particularly susceptible to further economic weakness High dependence on third-party channels, particularly the brokered channel for mortgage and deposit origination Apparent control weaknesses relating to income and employment verification, as evidenced by fraudulent activity in broker-originated mortgages several years ago Our outlook on Home Capital Group Inc. is negative, reflecting our view that the company's significant concentration in nonprime residential mortgages during a period of elevated home prices and consumer leverage is weighing on
