Genworth CFO Says Mortgage Unit to Recover With Housing
Genworth Financial Inc. (GNW), the insurer that announced a plan today to isolate its unprofitable U.S. mortgage insurer, said the unit’s results may improve amid a U.S. housing rebound.
“We do feel increasingly like the business is in recovery and earnings we expect to be much improved,” Chief Financial Officer Martin Klein said today in a phone interview. “We’ve seen a fairly slow but steady recovery, not just in the U.S. economy, but in the housing market.”
Genworth said today it’s reorganizing to separate most of the company from mortgage-insurance operations that saddled the firm with losses and threatened its investment-grade credit rating. The U.S. mortgage insurer posted operating losses of $106 million in the first nine months of last year and $513 million in 2011. The unit may be profitable in one or two quarters this year, Klein said today on a conference call.
“As we head into 2013, the business is going to continue to recover,” Klein said.
Genworth rallied 9.2 percent to $8.88 at 3:24 p.m. in New York, the biggest advance since Oct. 31. The bonds gained and credit-default swaps narrowed. Genworth, based in Richmond, Virginia, also sells life insurance and long-term care coverage.
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