Business as usual for the mortgage broker network
Dominion Lending Centres Inc. (the DLC Group of Companies, or DLCG) has been cleared of anti-competitive conduct allegations by the Competition Bureau.
The Bureau launched an investigation in May 2023 to determine if DLCG's practices stifled competition in the mortgage brokerage industry. DLCG received a court order to produce certain documents, records, and data related to the inquiry.
The watchdog was investigating whether DLCG and its subsidiaries, Mortgage Centre Canada, Mortgage Architects, and Newton Connectivity Systems, were engaging in practices that were limiting mortgage brokers' ability to use technology solutions of their choice, potentially hindering competition.
However, after reviewing documents and records, the Bureau found insufficient evidence to pursue further action. It issued a Notice of Inquiry Discontinuance.
“We are dedicated to regulatory compliance in all aspects of our business and are pleased the inquiry has been discontinued,” Dominion Lending chairman and CEO Gary Mauris said in a statement. “I’d like to thank our management team for their extensive work in responding to the Bureau’s inquiry.”
The British Columbia-headquartered lender operates through its three subsidiaries. Together, these companies form a network that includes over 8,000 agents across more than 520 locations in Canada.
In addition to resolving the inquiry, DLCG recently announced the re-election of its board of directors. The board members re-elected include Gary Mauris, Chris Kayat, Trevor Bruno, James Bell, Kingsley Ward, Ron Gratton, and Dennis Sykora. Ernst & Young LLP was also reappointed as the company's auditor.
DLCG also reported a solid first quarter of 2024. The company saw a 14% increase in funded mortgage volumes compared to Q1 2023, reaching $11.2 billion. Revenues also rose 17% year-over-year to $13.7 million.
Read more: DLCG posts Q1 gains as Canadian housing market "stabilizes"
"We believe the Canadian residential real estate market has stabilized," said Mauris. "DLCG is well-positioned for the real estate market recovery."
DLCG attributes its growth to several factors, including a focus on recruiting and retaining brokers, onboarding efforts for its Velocity connectivity platform, and a new campaign called "Gold Rush" designed to help brokers stay connected with clients.
The company's strong performance translated to its bottom line. Q1 adjusted EBITDA reached $5 million, up from $2.6 million a year ago, and net income jumped to $2.6 million compared to a net loss of $47,000 in Q1 2023.
"With significant mortgage renewals coming up for many Canadians, we're optimistic for fiscal 2024," said Mauris. "We anticipate further positive momentum as the real estate market improves and interest rates potentially decline in the next 12-18 months."
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