Genworth Financial
Inc.
(
GNW
) is expected to close the Initial Public Offering ("IPO") of its
Australian mortgage insurance business in early 2013. Initially,
the company intended to sell 40% of the stake in the second quarter
of 2012. However, market conditions, valuation considerations
including business performance and regulatory approvals will play a
major role in its completion.
Given a soft operational performance in Australia in the recent
times, the company decided to push forward its IPO. Genworth
expects higher losses at Australian mortgage insurance business in
the first quarter of 2012. A rise in loss is anticipated as
lenders hastened foreclosures. In particular, this was experienced
in the coastal areas of Queensland, which suffered
catastrophes as well as a weak economy.
The IPO is an effort to reorganize the business portfolio,
support future growth opportunities for the Australian business
with greater access to the capital markets, maintain control
positions of strategic mortgage insurance platforms in Australia
and Canada, as well as free material capital for redeployment.
Genworth has been concentrating on its core business for some
time now by streamlining its businesses. Early April, the company
closed the divestiture of Genworth Financial Investment Services
("GFIS"), its tax and accounting financial advisor unit. Genworth
decided to sell the unit to increase focus on its core asset
management business within the Wealth Management segment.
In 2011, the company sold its Medicare supplement business and
related blocks of in-force business to
Aetna Inc.
(
AET
) in order to focus on the Retirement and Protection segment.
The current Zacks Consensus Estimate for first-quarter 2012 is
pegged at 24 cents per share. For full years 2012 and 2013, the
Zacks Consensus Estimates are $1.14 and $1.70, respectively.
The quantitative Zacks #3 Rank (short-term Hold rating) for the
company indicates no clear directional pressure on the stock over
the near term.
Based in Richmond, Virginia, Genworth Financial offers a variety
of products to customers in areas such as life insurance and
lifestyle protection, long-term care insurance, annuities, asset
management and mortgage insurance through financial intermediaries,
advisors, independent distributors and sales specialists.
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GNW
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