It’s not all bad in Canada’s alternative lending market. Dundee analyst Phil Hardies says, “We believe that those [non-bank lenders] that are regulated deposit-taking institutions or that have established diverse sources of funding will continue to prosper.”
Hardie feels that dwindling competition can only help financially secure non-bank lenders. What’s more, they’ll boost their profits. “With the level of competition declining for non-prime mortgage lenders,” he says, “risk premiums have begun to increase.” In other words, alternative lenders are jacking their rates and widening their spreads, as we reported in August.
Lenders like Equitable Group, Home Capital Group, and First National are some of the lenders that Hardie is upbeat on.
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