Genworth has announced it will post a loss for the first quarter on the back of more delinquencies heading to foreclosure.
The mortgage insurer has delayed its mooted IPO as a result. Genworth's American parent company last year announced it would offload a 40% stake in its Australian business to offset financial losses in its US division. The IPO was slated for the second quarter of 2012, but has now been rescheduled for early 2013.
"For the 2012 first quarter, the company expects to report elevated loss experience in Australia as lenders accelerated the processing of later-stage delinquencies from prior years through to foreclosure and claim at a higher rate and severity than expected, particularly in coastal areas of Queensland that experienced natural catastrophes and regional economic slowdowns and among certain groups of small business owners and self-employed borrowers. First quarter experience is anticipated to result in a modest first quarter loss in the Australian MI business," Genworth said in a statement.
The company claimed that its liquidity and risk buffer plans were not dependent on the IPO, and that it held a sufficient amount of cash to delay the offering.
Genworth to offload LMI stake