The ratings on Toronto-based Home Capital Group Inc. (Home Capital; TSX: HCG) and Home Trust Co. (Home Trust), a federally regulated trust company and a member of the Canadian Deposit Insurance Corp. (CDIC), reflect what we consider to be the company's strong and defendable position in the Canadian residential mortgage sector, strong and uninterrupted growth in earnings over the past decade, satisfactory asset quality, and very strong capital position. These strengths are somewhat offset by what we view as its limited business and geographic diversification, the higher risk profile of its non-prime mortgage customers, reliance on retail brokers to originate both deposits and mortgages, single-name exposures within the commercial mortgage book, and the soft Canadian economy. Home Capital is the
