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Genworth Financial fails to qualify for US Treasury’s capital injection

The deadline set for approval by OTS of Genworth's application passed before OTS completed its review

Genworth Financial has failed to qualify for a capital injection from the US Department of the Treasury.

Genworth Financial was informed by the US Department of the Treasury that the deadline it set for approval by the Office of Thrift Supervision (OTS) of the company’s application to become a savings and loan holding company passed before OTS completed its review of Genworth’s application and Treasury will not extend the deadline.

Genworth will therefore neither complete its intended acquisition of InterBank, fsb of Maple Grove, Minnesota nor it will be eligible to participate in Treasury’s capital purchase programme (CPP) established for companies that own a thrift.

Michael Fraizer, Genworth’s CEO, said: As we noted on prior occasions, CPP participation by way of a thrift acquisition was only one of the strategic levers Genworth has considered to provide another level of capital flexibility to address unforeseen events, and the nature of that programme has continued to evolve. Since Genworth’s initial CPP application in November 2008, we have made significant progress enhancing our capital levels and flexibility using various strategies including reinsurance, refinements in targeted markets, dividend reductions, risk mitigation and expense streamlining. Genworth will continue to benefit from these actions.

We continue to progress in our evaluation of additional strategic opportunities ranging from selected asset sales to other governmental programmes that could provide additional financial flexibility and we will pursue these where we believe it makes sense.