October 16, 2017 - 12:46 PM
TORONTO - Home Capital Group Inc. (TSX:HCG) says it has reached an agreement to sell its payment processing and prepaid card business as it looks to further streamline operations.
The Toronto-based alternative mortgage lender says the sale of the business will save about $20 million in annual salary and other operating costs, while giving up the $18 million in fees and other income it brought in.
Home Capital had already signalled its intention to sell the division as a non-core operation, and says the impact from the sale on its full-year net income is insignificant.
Earlier in October, the company said it had cut 65 jobs as part of a program to eliminate $15 million in annual costs that was largely complete.
The company has been looking to restore soundness after allegations by regulators that it misled investors prompted a run on deposits by customers in April.
Home Capital says it is still facing elevated expenses because of the scrutiny, and the need to borrow funds at higher rates to make it through the liquidity crunch.
News from © The Canadian Press, 2017