MCAN Financial Group reported second-quarter net income of $20.2 million ($0.51 per share), up from $19.7 million ($0.52) a year earlier, driven by higher mortgage spread income and increased earnings from its stake in MCAP.
Return on average shareholders’ equity was 13.19%, compared to 13.63% in Q2 2024. The results were partly offset by higher provisions for credit losses, which rose to $2.2 million from $1.4 million a year ago.
CEO Derek Sutherland credited the 22% quarter-over-quarter and 2% annual profit gains to “record originations in our insured residential lending business while maintaining our spreads.”
He said credit quality remains resilient and highlighted the July launch of an uninsured residential mortgage securitization program with a major Canadian bank as a key growth opportunity.
Although the company recorded higher provisions for credit losses than the prior year, “our credit quality remains resilient as it has since our founding,” he added.
MCAN said the Q2 provision was mainly due to worsening economic forecasts tied to the current economic and geopolitical environment, interest provisioning on impaired residential construction loans, and a slight increase in uninsured residential mortgage arrears. The lender noted that its uninsured residential mortgage loan portfolio has an average loan-to-value of 64.0% as of June 30.
Quarterly highlights
| Q2 2025 |
Quarterly change | Annual change |
|
|---|---|---|---|
| Net income | $20.2M | +22% | +2% |
| Earnings per share | $0.51 | +19% | -2% |
| Assets under management | $6.7B | +8% | +11% |
| Securitized mortgages | $2.4B | +3% | +12% |
| Uninsured mortgages | $1.2B | +2% | +11% |
| Provisions for Credit Losses (PCL) | $2.2M | -28% | +55% |
| Mortgage arrears | $128.7M | +17% | +28% |
| Total capital ratio | 19.22% | -0.21% | -0.13% |
MCAN originated $231 million in uninsured residential mortgages in the first half of 2025, up 17% from last year, and renewed $245 million. Insured residential mortgage securitization volumes in Q2 rose 34% year-over-year to $211 million, though year-to-date volumes were down 29%.
The company’s new uninsured securitization program saw $80.2 million sold in July. MCAN said the initiative supports diversification and capital optimization.
Strategic focus and market expansion
MCAN said it expects a moderate increase in home purchase activity once more significant interest rate cuts materialize, but also heightened competition for both new originations and renewals.
The lender said it will “remain open for business while taking a prudent approach to the mortgage originations we undertake,” continue scaling its new uninsured residential mortgage securitization program, and invest in systems to enhance service for borrowers and brokers.
Sutherland noted that MCAN is expanding its presence in Alberta and British Columbia’s urban markets, with record quarterly originations in insured residential mortgages and growing uninsured volumes through the new securitization channel.
On the construction side, he said the company is “focused on maintaining the pipeline” with higher-yield residential construction and completed-inventory loans to “experienced developers with a successful track record of project completion and loan repayment,” particularly in Ontario, BC and Alberta where population growth and a shortage of affordable housing are driving demand.
He also highlighted MCAP as “a key driver of returns for our shareholders,” with partnership income rising 3% year-over-year as the mortgage finance company delivered record results in the quarter.
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Last modified: August 8, 2025
