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UPDATE 2-Home Capital says 'top notch' shortlist for CEO role

* Expects CEO appointment soon

* Expects to record second-quarter loss

* Expenses rise in second-quarter (Recasts, adds comments from chair, director)

June 29 (Reuters) - Canadian lender Home Capital Group Inc's Chair Brenda Eprile on Thursday told shareholders at the company's annual meeting it had attracted a "top notch" list of candidates for its chief executive role and would make an appointment soon.

The company has been searching for a new CEO since March 27 when it terminated the employment of former chief executive Martin Reid.

Reid's departure sparked a withdrawal of funds from Home Capital's high interest savings accounts which accelerated after April 19, when Canada's biggest securities regulator, the Ontario Securities Commission, accused Home Capital of making misleading statements to investors about its mortgage underwriting business.

Home Capital reached a settlement with the commission earlier in June and accepted responsibility for misleading investors about mortgage underwriting problems.

Last week, it received $2 billion in new financing from U.S. billionaire Warren Buffett's Berkshire Hathaway, which it has said gives it a critical platform to recover investor and depositor's confidence.

However, it still needs to address challenges including attracting a new chief executive and chief financial officer.

"It's too early to declare victory," Director Alan Hibben told shareholders.

Earlier on Thursday, Home Capital said it expects to record a loss in the second quarter due to costs related to its efforts to shore up liquidity.

The lender, which is expected to release second-quarter results on Aug. 2, said its expenses would increase by C$233 million ($179 million) before taxes, which includes C$210 million in costs related to its recent liquidity issue.

"The serious liquidity event that occurred late in April required the Company to take quick and dramatic steps, liquidating assets and arranging a rescue financing facility," interim Chief Financial Officer Robert Blowes said.

Home Capital also said it received conditional listing approval from the Toronto Stock Exchange for Berkshire's initial investment of C$153.2 million for a stake of about 20 percent.

The lender, which will conduct its annual shareholder meeting on Thursday, said average daily Guaranteed Investment Certificate (GIC) deposit inflows increased to C$38 million in the week ended June 23 from C$5 million in the week ended May 5.

"We believe that the improvement in deposit taking indicates a significant increase in depositor confidence in the Company", said Hibben.

Shares in Home Capital were up 3 percent to C$17.70 at 1105 EST. ($1 = 1.3009 Canadian dollars) (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty and Clive McKeef)