The ratings on Toronto-based Home Capital Group Inc. (Home Capital; TSX: HCG) and Home Trust Co., a federally regulated trust company and a member of the Canadian Deposit Insurance Corp. (CDIC), reflect the company's strong and defendable niche position in the Canadian residential mortgage sector, strong and uninterrupted growth in earnings in the past decade, good asset quality, and very strong regulatory capital ratios. These strengths are somewhat offset by the higher risk profile of Home Capital's customer base, limited business diversification given the company's relative size in the Canadian marketplace, dependence on spread income, and the firm's increased use of securitization as a funding source. Home Capital is the largest alternative provider of residential first mortgages in the Canadian
