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Genworth CEO optimistic despite profit plummeting by 34%

Genworth CEO optimistic despite profit plummeting by 34%

The LMI provider continues to see its profits slide, but CEO Georgette Nicholas believes that the group’s third-quarter results were strong and reflected the group’s resilience.

On 3 November, Genworth reported a net profit after tax (NPAT) of $120.7 million for the year to 30 September, down by 33.9 per cent on the previous year.

Profits fell by 31.3 per cent over the third quarter of 2017 to $32.1 million (from $46.7 million in 3Q16).

“Our third-quarter results were strong and demonstrate the resilience of the business managing through various cycle[s],” Genworth CEO and managing director Georgette Nicholas said.

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“Our profitability remains strong in light of the small high loan-to-value ratio (LVR) market and continued development of losses in mining areas.

“At this time, our full-year 2017 guidance has been updated from that provided to the market in February, reflecting better-than-expected loss performance.”
Capital management is a key focus for the group as it considered how best to use excess funds.

As part of its ongoing capital management strategy, Genworth has partially completed a $100 million on-market share buy-back to a value of $45 million.

“We plan to continue the buy-back subject to business and market conditions, the prevailing share price, market volumes and other considerations,” Ms Nicholas said.

“Our business focus is to address our customers’ capital and risk management needs and to deliver a sustainable return on equity for shareholders. We remain focused on executing our business strategy to redefine our core business model.”

The mortgage insurer noted that house price growth is continuing to moderate following regulatory measures to slow the growth in investment lending and limit the flow of new interest-only lending.

“Mortgage interest rate increases, particularly for investor and interest-only loans, and recent changes to minimum bank equity requirements may also impact price growth this year,” Genworth said in a trading update.

Genworth CEO optimistic despite profit plummeting by 34%
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