Genworth Mortgage Insurance Australia Limited (ASX: GMA) today announced the renewal of service contract with National Australia Bank for the term of two years, commencing today.
Under the terms of contract, Genworth will provide Lenders Mortgage Insurance (LMI) for NABâs broker business.
Genworth Chief Executive Officer and Managing Director, Ms Georgette Nicholas stated that Genworth looks forward to continuing the long-standing relationship with NAB under the terms of new supply contract which meets the companyâs pricing ROE profile and risk appetite.Â
Ms. Nicholas added companyâs value proposition to lender customer stands strong and the company continue to invest in its relationship with NAB through advanced product offerings, technology and services.
Lender, Genworth Mortgage, recently announced the appointment of new Chief Financial Officer.
As per the ASX release dated 20 November 2018, Mr. Michael Bencsik, a Certified Practising Accountant and Chartered Certified Accountant, has been appointed to the role of GMAâs Chief Financial Officer, commencing in early 2019.
With over 25 yearsâ experience in banking and financial services across Australia, New Zealand, United Kingdom, Europe, the Middle East, and Asia Pacific, most recently, Mr. Bencsik held the role of Deputy Chief Financial Officer, Bank of Queensland and St Andrewâs Insurance Australia.
For the three months ended 30 September 2018, Genworth reported significant downturn in the financial performance of the company driven by the subdued cure rates from a moderating housing market.
Statutory net profit after tax (NPAT) of 3Q18 declined 38.9% to $19.6 million, compared to the previous corresponding period and underlying NPAT for the same period was $20.4 million, down 49.6% on 3Q17. Net Insurance written contracted 7.3% to stand at $5.1 billion for three months ended 30 September 2018.
Ms. Georgette Nicholas, Chief Executive Officer and Managing Director of Genworth stated companyâs 2018 third quarter results reflects the continued trends of tighter credit standards, softening cure rates ahead of moderating housing market, and increase in mortgage interest rates.
However, the company managed to achieve marginal growth in Gross Written Premium which increased to $92.1 million in 3Q18, up 3.6% on 3Q17. This reflects significant improvement in Genworthâs Lenders Mortgage Insurance (LMI) flow business despite facing headwinds from tighter credit conditions and cooling housing markets.
Ahead of 2017 Earnings Curve Review and crackdown of housing lending, Genworth expects a decline of approximately 25% to 30% in its FY18 NEP. The lower NEP will impact the full year loss ratio of the company as meltdown in housing market with RBAâs tighter lending regulation will continue to soften cure rate, resulting in a more muted seasonal uplift than usually experienced in the second half of the year.
Given these factors, Genworth expects its 2018 full year loss ratio to be between 50% to 55%. However, the company continues to target an ordinary dividend payout ratio range of 50% to 80% of underlying NPAT.
On the news of renewal of contract with NBA, Genworthâs share price edged up by 0.227% to trade at $2.205 on 21 November 2018 (12:55 PM AEST). But over the past one year, the stock has witnessed a negative performance change of 27.81%.
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