NEW YORK, April 9 (Reuters) - Genworth Financial Inc , a U.S. life and mortgage insurer, on Thursday said it will not be eligible for new capital under the government's Troubled Asset Relief Program, causing its shares to sink 20 percent after-hours.
The Richmond, Virginia-based company said the Treasury Department declined to extend a deadline it set for approval by the Office of Thrift Supervision of Genworth's application to become a savings and loan holding company.
Genworth had applied for TARP money in November, and planned to buy Interbank fsb of Maple Grove, Minnesota in connection with obtaining new capital. It said the Treasury decision means it will not go through with that purchase.
OTS spokesman Bill Ruberry said: 'Genworth applied and the OTS has been reviewing the application. That's our only comment.'
Like many life insurers, Genworth has suffered from capital strains as the value of its investments declined. The company lost $321 million in the fourth quarter.
Chief Executive Michael Fraizer in a statement said Genworth would pursue 'strategic opportunities ranging from selected asset sales to other governmental programs that could provide additional financial flexibility.'
Fraizer also said Genworth ended 2008 with about $2 billion more than regulators require.
Genworth shares fell 55 cents to $2.20 in after-hours trading following the announcement. They had risen 31.6 percent on Wednesday and Thursday, after the Treasury Department said some life insurers would be eligible for TARP capital.
(Additional reporting by Karey Wutkowski)
(Reporting by Jonathan Stempel; Editing Bernard Orr) Keywords: GENWORTH/TARP (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The Richmond, Virginia-based company said the Treasury Department declined to extend a deadline it set for approval by the Office of Thrift Supervision of Genworth's application to become a savings and loan holding company.
Genworth had applied for TARP money in November, and planned to buy Interbank fsb of Maple Grove, Minnesota in connection with obtaining new capital. It said the Treasury decision means it will not go through with that purchase.
OTS spokesman Bill Ruberry said: 'Genworth applied and the OTS has been reviewing the application. That's our only comment.'
Like many life insurers, Genworth has suffered from capital strains as the value of its investments declined. The company lost $321 million in the fourth quarter.
Chief Executive Michael Fraizer in a statement said Genworth would pursue 'strategic opportunities ranging from selected asset sales to other governmental programs that could provide additional financial flexibility.'
Fraizer also said Genworth ended 2008 with about $2 billion more than regulators require.
Genworth shares fell 55 cents to $2.20 in after-hours trading following the announcement. They had risen 31.6 percent on Wednesday and Thursday, after the Treasury Department said some life insurers would be eligible for TARP capital.
(Additional reporting by Karey Wutkowski)
(Reporting by Jonathan Stempel; Editing Bernard Orr) Keywords: GENWORTH/TARP (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.