Toronto-based Counsel Corp. (TSX: CXS) Monday announced that its board of directors has approved a plan to dispose of the company’s non-core operating business segments.
The decision reflects the company’s strategy, undertaken in recent years, to focus on financial services. Counsel’s core operating business is Street Capital Financial Corp., a Canadian residential mortgage lender that accounted for approximately 80% of Counsel’s revenues in 2012 and which has experienced rapid growth since being acquired by Counsel in 2011.
“Street Capital is a significant growth platform for Counsel,” explained Allan Silber, chairman and CEO of Counsel. “Mortgage originations have increased by more than 60% in 2012 compared to 2011, and our mortgage portfolio has more than doubled to over $12 billion since its acquisition, making Street Capital one of the leading non-bank lenders operating in the mortgage broker channel.
“Street Capital has an exciting growth strategy focused on increasing the volume of mortgages it originates by broadening and deepening its relationships with high quality mortgage brokers,” Mr. Silber said. “Additionally, last December, Street Capital applied to Canada’s Minister of Finance for approval to operate as a federally regulated Schedule I bank. If approved, it would enable the company to broaden its product line into other forms of consumer lending and related services, thereby increasing its value proposition to brokers and retail customers.”
As part of its strategy to focus on financial services, Counsel has been winding down its real estate management business. The decision to dispose of its remaining business segments accelerates this process.