1

Q1 2020 earnings

presentation

May 7, 2020

2

From time to time Home Capital Group Inc. (the Company) makes written and verbal forward-looking statements. These are included in the Annual Report,

periodic reports to shareholders, regulatory filings, press releases, Company presentations and other Company communications. Forward-looking statements are

made in connection with business objectives and targets, Company strategies, operations, anticipated financial results and the outlook for the Company, its

industry, and the Canadian economy. These statements regarding expected future performance are “financial outlooks” within the meaning of National Instrument

51-102. Please see the risk factors, which are set forth in detail in the Risk Management section of the 2020 First Quarter Report, as well as the Company’s other

publicly filed information, which is available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors

that could cause the Company’s actual results to differ materially from these statements. These risk factors are material risk factors a reader should consider, and

include credit risk, liquidity and funding risk, structural interest rate risk, operational risk, investment risk, strategic risk, reputational risk, compliance risk and capital

adequacy risk along with additional risk factors that may affect future results. Forward-looking statements can be found in the Report to the Shareholders and the

Outlook section in the 2020 First Quarter Report. Forward-looking statements are typically identified by words such as “will,” “believe,” “expect,” “anticipate,”

“intend,” “should,” “estimate,” “plan,” “forecast,” “may,” and “could” or other similar expressions.

By their very nature, these statements require the Company to make assumptions and are subject to inherent risks and uncertainty, general and specific, which

may cause actual results to differ materially from the expectations expressed in the forward-looking statements. These risks and uncertainties include, but are not

limited to, the impacts of the novel coronavirus disease (COVID-19) pandemic and government responses to it, global capital market activity, changes in

government monetary and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments,

climate change, competition and technological change. The preceding list is not exhaustive of possible factors.

These and other factors should be considered carefully and readers are cautioned not to place undue reliance on these forward-looking statements. The Company

presents forward-looking statements to assist shareholders in understanding the Company’s assumptions and expectations about the future that are relevant in

management’s setting of performance goals, strategic priorities and outlook. The Company presents its outlook to assist shareholders in understanding

management’s expectations on how the future will impact the financial performance of the Company. These forward-looking statements may not be appropriate for

other purposes. The Company does not undertake to update any forward-looking statements, whether written or verbal, that may be made from time to time by it or

on its behalf, except as required by securities laws.

Forward-looking statements

3

Overview

Yousry Bissada, CEO

4

Home responds to COVID-19: We’re here to help

Our people Our customers

• 98% moved to working from home

• Additional IT tools and resources as

needed

• Regular communications and updates

• Webinars on health and wellness

concerns

• Payment deferral options initially for up to

two months

• VPN-enabled remote workplace for

customer privacy and data security

• Additional resources added to customer

contact centre

• Information on relief solutions and

government programs added to website

5

Highlights of Q1 2020

Support for employees

and customers

during COVID-19 conditions

Advanced CRM

system for best-in-class broker

reporting capability

DASH:

Straight-

through

processing

of deposits

DART: Robotic Process

Automation for

processing deferrals

Growth in residential and

commercial loan

originations from Q1 2019

6

Financial

resultsBrad Kotush, CFO

7

$27.8 $27.7 $29.9

$-

$10.0

$20.0

$30.0

$40.0

Q1 2019 Q1 2020 Q1 2020 Adjusted1

Net income - millions

Q1 highlights

$27.00

$29.44

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

Q1 2019 Q1 2020

Book value per share

61.0

51.8

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q1 2019 Q1 2020

Shares outstanding at year-end (millions)

1 See definition of Adjusted Net Income and Adjusted Diluted Earnings per Share in

the Company’s 2020 First Quarter Report.

0.450.52

0.56

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

Q1 2019 Q1 2020 Q1 2020 Adjusted1

Earnings per share

8

Earnings per share growth from margin expansion offset by

higher provisions expense

9

Summary of adjustments related to Home Trust’s Ignite Program

Resulting from changes in estimated useful life of legacy IT investment and implementation expenses

1 See definition of Adjusted Net Income, Adjusted Earnings per Share, Adjusted Efficiency Ratio and Adjusted

Return on Shareholders’ Equity under Non-GAAP Measures in the Company’s 2020 First Quarter Report.

Q1 2020 Q4 2019

ReportedAdjustment for

Ignite ProgramAdjusted1 Reported

Adjustment for

Ignite ProgramAdjusted1

Net income (millions) $27.72 $2.16 $29.88 $37.23 $3.92 $41.15

ReportedAdjustment for

Ignite ProgramAdjusted1 Reported

Adjustment for

Ignite ProgramAdjusted1

Earnings per share $0.52 $0.04 $0.56 $0.65 $0.07 $0.72

Efficiency ratio (TEB) 46.7% (2.3%) 44.4% 55.6% (4.3%) 51.3%

Return on equity

(annualized)6.9% 0.6% 7.5% 9.0% 0.9% 9.9%

10

$212.1

$403.5

$70.7

$164.0

$-

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Q1 2019 Q1 2020

Millions

Residential commercial Non-residential commercial

Growth in originations Q1 2020 versus Q1 2019

$902.0$968.3

$31.2

$81.4

$0.0

$200.0

$400.0

$600.0

$800.0

$1,000.0

$1,200.0

Q1 2019 Q1 2020

Millions

Classic single-family Accelerator single-family

11

Loan growth

$16.5 $16.7

$17.0 $17.2 $17.1

$14.0

$14.5

$15.0

$15.5

$16.0

$16.5

$17.0

$17.5

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Total loan portfolio (billions)+3.8% y/y

12

Net interest margin up 37 bps compared with Q1 2019

1.91%

2.03%

1.99% 2.01%

2.09%

2.22%

2.31%

2.38%

1.85%

1.95%

2.05%

2.15%

2.25%

2.35%

2.45%

Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Net interest margin (TEB1)

1 Net interest margin is a measure of profitability of assets. Net interest margin (TEB) is calculated by taking net interest income, on a taxable equivalent

basis, divided by the average total assets.

Higher average

yields on non-

securitized

products

Reduced deposit

rates

13

Oaken deposits continue to grow with focus on GICs

Oaken now accounts for 24.9% of deposits with majority in the form of term deposits

$3.0

$0.5

$3.5

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

Q1 2020

Oaken deposits by product in $billions

GICs Savings accounts Total

14.7%

85.3%

$10.6 $10.4 $10.2 $10.2 $10.4

$2.9 $3.1 $3.3 $3.4 $3.5

$13.5 $13.5 $13.5 $13.6 $13.9

$-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Broker and Oaken deposits in $billions

Broker Oaken Total

14

Update on Funding

➢First RMBS transaction at the end of Q3 2019 has been well received by

the market

➢Credit, maturity and prepayment experience are in line with initial estimates

➢Market conditions forced us to postpone a second offering last quarter. We

still plan on being a serial issuer of RMBS subject to market conditions

➢At the end of April 2020, Home Trust made a 30-day draw of $100 million

from the Bank of Canada’s Standing Term Liquidity Facility

15

Profile of residential mortgage book

Sustainable risk culture underlying prudent underwriting of residential loans

682 705

0

100

200

300

400

500

600

700

800

Classic originations during Q1 Total Classic portfolio

Weighted-average FICO score

70.3%

61.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

New uninsured single-familyresidential mortgages originated

in Q1 2020

All uninsured single-familyresidential mortgages

Weighted-average loan to value

16

• Provisions for credit losses of 0.70% of gross loans on an annualized basis

• Net write-offs of 0.03% of gross loans on an annualized basis

• Single-family residential mortgage net write-offs remain low at 0.02% in the quarter

Provisions and write-offs as a percentage of gross loans

Results in 2018, 2019 and 2020 are reported under IFRS 9 and results in 2016 and 2017 are

reported under IAS 39 which may limit comparability to prior periods.

0.70%

0.03%

-0.20%

-0.10%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Provisions (annualized) as a % of gross loans Net write-offs (annualized) as a % of gross loans

17

Allowance for credit losses in Q1 2020

$25.9 $29.5

$17.2$24.0

$3.5

$3.9$15.8

$33.8 $62.4

$91.3

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$100.0

Q4 2019 Q1 2020

Millions

Components of allowance for credit losses

Other consumer retail Credit card and lines of credit

Commercial mortgages Single family residential mortgages

Total

34.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

NPL Allowance as % of Gross NPL

18

Change in components of allowance for credit losses

Sequential change in components of allowance

(in 000s) Stages 1 and 2 Stage 3 Total

Single-family residential mortgages$ 3,932 $ (332) $ 3,600

Commercial mortgages$ 4,400 $ 2,375 $ 6,775

Credit card loans and lines of credit$ 508 $ (41) $ 467

Other consumer retail loans$ 13,418 $ 4,590 $ 18,008

Total$ 22,258 $ 6,592 $ 28,850

77% of increase attributable to Stages 1 and 2 loans

19

Net non-performing loans as a percentage of gross loans

Results in 2018, 2019 and 2020 are reported under IFRS 9 and results in

2016 and 2017 are reported under IAS 39 which may limit comparability

to prior periods.

0.36%

0.31%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Net Non-Performing Loans as % of Gross Loans

Net Non-Performing Loans as a % of Gross Single-Family Residential Loans

20

Liquidity risk management

Liquid assets and near-term maturities

Aggregate available liquidity of $1.93 billion at the end of Q1 including $500 million undrawn credit

facilityNear-term loan maturities exceed deposit

maturities

$1,358 $1,323 $1,341 $1,366 $1,429

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Millions

Liquid assets at carrying valueAs % of Total assets

$3.0

$8.1

$2.5

$0.4

$14.0

$1.8

$4.8 $4.8

$1.8

$13.2

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

0-3 months 3-12months

1-3 years Over 3years

Total

Billions

Non-Securitized Contractual Loan Maturities

Contractual Fixed Term Deposit Maturities

21

Capital and leverage metrics1

Well capitalized to withstand challenging economic environment

Leverage is within internal risk limits and well above regulatory requirements

7.00%

17.73%

REGULATORY MINIMUM

ACTUAL

1 Ratios are based on Home Trust Company’s consolidated financial

position.

Basel III Common Equity Tier 1 at Q1 2020 Leverage ratio at Q1 2020

3.00%

7.03%

REGULATORYMINIMUM

ACTUAL

22

Questions?

23

Q1 Financial highlights

Q1 2020 Q4 2019 Q1 2019 Sequential changeYear-over-year

change

Originations (millions) $1,617.2 $1,619.9 $1,216.1 (0.2%) 33.0%

Revenue (millions) $127.2 $123.8 $103.8 2.7% 22.5%

Net interest margin (TEB) 2.38% 2.31% 2.01% 7 bps 37 bps

Provisions as % of Gross Loans

(annualized) 0.70% 0.09% 0.15% 61 bps 55 bps

Efficiency ratio (TEB) – reported 46.7% 55.6% 57.7% (890) bps (1,100) bps

Efficiency ratio (TEB) – adjusted1 44.4% 51.3% 54.7% (690) bps (1,030) bps

Net income (millions) – reported $27.7 $37.2 $27.8 (25.6%) (0.4%)

Net income (millions) – adjusted1 $29.9 $41.2 $30.2 (27.4%) (0.9%)

Earnings per share – reported $0.52 $0.65 $0.45 (20.0%) 15.6%

Earnings per share – adjusted1 $0.56 $0.72 $0.49 (22.2%) 14.3%

Return on equity (annualized) – reported 6.9% 9.0% 6.8% (210) bps 10 bps

Return on equity (annualized) – adjusted1 7.5% 9.9% 7.3% (240) bps 20 bps

1 See definition of Adjusted Efficiency Ratio, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Return on Shareholders’ Equity under

Non-GAAP Measures in the Company’s 2020 First Quarter Report.

24

Q1 Financial highlights

Q1 2020 Q4 2019 Q1 2019Sequential

change

Year-over-year

change

Total loan portfolio (billions) $17.12 $17.15 $16.50 (0.2%) 3.8%

Loans under administration

(billions)$23.04 $22.96 $23.11 0.4% (0.3%)

Assets under administration

(billions)$25.07 $24.79 $24.94 1.1% 0.5%

Net non-performing loans as %

of gross loans0.36% 0.44% 0.49% (8) bps (13) bps

CET1 ratio1 17.73% 17.64% 18.99% 9 bps (126) bps

Book value per share $29.44 $29.33 $27.00 0.4% 9.0%

Shares outstanding (millions) 51.8 57.3 61.0 (5.5) (9.2)

1CET1 ratio relates to the Company’s operating subsidiary, Home Trust Company