Xceed Mortgage's dream of becoming a bank take step forward

By The Canadian Press

TORONTO - Xceed Mortgage Corp. (TSX: XMC.TO), originally a specialist in lending to home buyers who don't qualify for loans from Canada's big financial institutions, is proceeding with plans to become a deposit-taking bank.

"As a bank, Xceed will benefit by increasing our channels for obtaining additional funds that we can use for underwriting new mortgages and renewing existing ones in our nearly $2 billion portfolio of assets under management," Ivan Wahl, Xceed's chairman and chief executive officer, said Friday in a statement.

"We will be able to attract retail deposits, by issuing guaranteed investment certificates, at rates that are competitive in the marketplace while providing a reasonable cost for Xceed."

The Toronto-based company's shareholders voted late Thursday to approve the plan to become a Schedule 1 bank.

The plan requires approval Office of the Superintendent of Financial Institutions.

Earlier Thursday, Xceed announced it had a $7.5 million loss in its third quarter, offsetting gains in the first half of the year and reversing year-ago profits.

The loss for the period ended July 31 amounted to 27 cents a share, reversing year-earlier net income of $1.6 million or six cents a share.

Xceed booked a negative revenue of $3.1 million due as $1 million earned from interest was offset by expenses.

Xceed's revenue during the same quarter last year was $7.5 million.

Mortgages and other assets under administration totalled $2 billion, down from $2.273 billion last year.

The company's shares closed Thursday at $1.69, down 29 cents on the Toronto Stock Exchange.