Strong underwriting standards for near-prime mortgages Very strong S&P Global Ratings risk-adjusted capital (RAC) ratio, although under some pressure from share repurchases Continuing progress on strengthening profitability, financial flexibility, and governance Concentrated exposure to the riskier near-prime segment of the Canadian mortgage market Dependence on the third-party brokered channel for mortgage and deposit origination Weaker profitability compared with historical levels, although improving since 2017 Limited revenue and geographical diversification S&P Global Ratings' stable outlook reflects its expectation that Home Capital Group Inc.'s (HCG) stronger balance sheet and improving profitability are helping the company reduce the negative effects from the ongoing pandemic related to COVID-19. We expect asset quality metrics could weaken; however, we believe that HCG is well positioned to
