Xceed Lost $3.3 Million in 2009; Originations Up 46%
Last year was challenging for Xceed Mortgage, but Chairman/CEO, Ivan Wahl, has a “renewed sense of optimism” for 2010.
First the bad news…
Net income last quarter was 1/2 of what it was a year ago—thanks to “a reduced net gain on the sale of mortgages and sharply lower securitization income.”
Xceed’s loss for the year was $3.3 million vs. a $12 million loss the prior year
Revenue for fiscal 2009 sank from $22.3 million to $9.4 million.
Wahl says: “An increasing number of Canadians still are unable to renew their mortgages if their overall credit condition has not improved sufficiently for them to qualify for an insured mortgage.” Many of them will be stranded come renewal time.
Interestingly, despite losing money in 2009 (see earnings), Xceed underwrote 46.3% more mortgages. One might expect that more mortgages = more profit. Not last quarter. (Although Xceed did trim its deficit for the year.)
Xceed said that 2009 left it with “lower-spread margins than previously enjoyed.” An industry-wide liquidity shortage and warlike competition in the insured mortgage market (the only market Xceed now plays in) didn’t help.
The good news…
Xceed Mortgage plans to become Xceed Bank, as we wrote back in August. Wahl said that bank status will give Xceed “a new and important avenue for accessing stable capital at a reasonable cost” and will “significantly increase our underwriting capacity.” It will also give Xceed a way to get back into more profitable non-prime lending.
Wahl says, “We believe that the application process is making progress, but the timing of any approval is entirely up to OSFI.”