A weakening economy in Canada, in conjunction with Home Capital Group Inc.'s business mix, with a heavy concentration in nonprime residential mortgages, makes the franchise more vulnerable to a downturn or disruption in the Canadian housing market, in our view. In addition, recent headwinds associated with the fraudulently originated mortgages have reduced our confidence in Home Capital's risk management framework. We are revising our outlook on Home Capital to negative from stable and affirming our ratings on the company, including our 'BBB-/A-3' issuer credit ratings. The negative outlook reflects a possible downgrade if deteriorating macroeconomic conditions lead to considerable weakening in the bank's credit metrics. We could also lower our ratings if we expect Home Capital's risk-adjusted capital ratio to
