Lenders mortgage insurance (LMI) provider Genworth has experienced a 31.3% drop in net profits, citing a smaller market for high LVR loans and shaky property markets in the mining regions.
In the firm’s third quarter 2017 earnings results released on Friday (3 November), Genworth reported a statutory net profit after tax (NPAT) of $32.1m, a drop from the $46.7m reported the year prior.
“Our third quarter results were strong and demonstrate the resilience of the business managing through various cycles. Our profitability remains strong in light of the small high loan-to-value ratio (LVR) market and continued development of losses in mining areas,” said Georgette Nicholas, CEO and managing director of Genworth.
New business written, measured by new insurance written (NIW), fell 9.8% to $5.5bn in the quarter ending 30 September compared with $6.1bn a year earlier.
Overall, total portfolio delinquencies rose by 4.4% year-on-year, rising to more than 7,100 in the quarter ending 30 September.
While NSW and Victoria perform strongly, Queensland and Western Australia continue to present challenges for Genworth with elevated delinquencies in regional and metro areas affected by the mining slowdown.
“Genworth continues to engage with a wide range of regulators, policy makers and lender customers to promote policies that ensure and enable Australians to achieve the dream of home ownership. We continue to support the framework of a stable financial system that prioritises prudent residential mortgage lending and responsible credit growth,” Nicholas said.
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