Tax break lifts Genworth

A favourable tax ruling helped lift the profit of Genworth Financial in Australia in the June 2010 quarter, financial statements for the US-based mortgage insurance firm show.

Genworth said profit in Australia and New Zealand increased to US$59 million in the June 2010 quarter from US$32 million in the June 2009 quarter. The favourable tax change - the nature of which is not clear - added US$16 million to the bottom line in the latest quarter.

New business levels were lower with US$6.0 billion of home loans insured for banks over the June quarter and down from US$8.7 billion in loans insured in the corresponding quarter in 2009.

However, Genworth sold pool insurance on US$1.2 billion in loans after no such sales in 2009, itself a reflection of the mild recovery of securitisation.

Genworth said its regulatory capital ratio in Australia was 155 per cent at the end of the quarter.

Genworth also said its GAAP book value for its Australian mortgage insurance business at June 2010 was US$1.5 billion.