China in auto power play
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Genworth in deal to buy bank, seeks TARP money
NEW YORK (Reuters) - Life and mortgage insurer Genworth Financial Inc (GNW.N) said on Sunday it applied for capital under a U.S. government program, after reaching a deal to buy a bank, bringing it under federal regulation.
With the move, Genworth joins Hartford Financial Services Group Inc (HIG.N), a large property and life insurer, in seeking to change its regulatory status in order to participate in the Treasury Department's $700 billion Troubled Asset Relief Program (TARP).
Genworth declined to say what amount of capital it was seeking.
Hartford on Friday announced it was buying a small savings and loan, bringing it in line with a federal financial regulation requirement, and thereby making it eligible to raise up to $3.4 billion from TARP.
Genworth said on Sunday it had reached an agreement in principle to buy InterBank fsb of Maple Grove, Minnesota and filed a savings and loan holding company application with the Office of Thrift Supervision, a federal regulator.
InterBank is a community bank with about $1 billion in assets, according to its website.
Richmond, Virginia-based Genworth has been badly battered by investment losses, and concerns that it would run short of capital. Its shares have fallen from $25.45 at the beginning of the year, to as low as $1 last week.
Similar concerns over investment losses and capital shortfalls have dogged Hartford, even after it last month reached an agreement with German insurer Allianz SE (ALVG.DE) to inject $2.5 billion.
Life insurers generally have suffered large investment losses, eating into capital levels. Several in the sector have lobbied for access to TARP, because it could give companies a way to boost capital at better-than-market rates.
Earlier this month, Genworth reported a $258 million net loss for the third quarter and its operating profit missed Wall Street expectations. It also suspended a share buyback plan, withdrew a previous forecast for 2008 operating profit, and said it was exploring ways to bolster capital.
The company was spun off by General Electric Co (GE.N) in 2004.
(Reporting by Paritosh Bansal and Lilla Zuill; Editing by Tim Dobbyn)
