* To advance share buy-back plan to 2012 from 2013-14
* Says potential split may not be executed in near term
(Adds details, background)
By Brenton Cordeiro and Rachel Chitra
BANGALORE, July 29 Mortgage insurer Genworth
Financial is taking steps to possibly split up the
company, its Chief Executive Michael Fraizer said on a
post-earnings conference call.
Genworth shares were up 6 percent on Friday afternoon after
the insurer spoke of potentially splitting up the company and
said it was advancing its share buy-back plan to 2012 from
"We recognize that the characteristics of our life insurance
and wealth management business compared with our mortgage
insurance businesses may appeal to different groups of
investors," the CEO said.
However, he added that it is not a "strategy to execute in
the near term."
Genworth currently reports results in three segments -- U.S.
mortgage, retirement and protection, and its international
"I'm not clear about it. But tentatively, I feel they are
talking of a split-up only to report results differently,"
Sandler O' Neill analyst Edward Shields told Reuters.
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On Thursday, Genworth, which has a market capitalization of
about $3.9 billion, reported a quarterly profit that missed
analysts' estimates as it added to reserves in its loss-making
U.S. mortgage insurance operations business.
Genworth's mortgage insurance units in Canada and Australia
have been doing well, but its U.S. unit -- among the largest
mortgage insurers in the country -- is still suffering.
Earlier this month, Standard & Poor's cut its rating on the
company's mortgage insurance unit, but left its other ratings
untouched, suggesting that it sees strength in the company as a
MGIC Investment Corp , Radian Group and PMI
Group , the three largest publicly traded U.S. mortgage
insurers, have been wrestling with defaults and losses for more
than three years as Americans continue to struggle with home
loan payments amid rising joblessness and a fragile recovery.
"They (Genworth) could possibly report all the mortgage
insurance results together," analyst Shields said.
To enable a possible split, Fraizer said they were thinking
of realigning some of their businesses, bringing down debt and
"transitioning certain business platforms towards more
stand-alone capital structures."
Last month, Genworth sold its medicare supplement business
to health insurer Aetna Inc for $290 million.
Genworth shares were trading up 6 percent at $8.30 on Friday
afternoon on the New York Stock Exchange.
(Reporting by Rachel Chitra & Brenton Cordeiro in Bangalore;
Editing by Roshni Menon)