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Mortgage strife concentrates for Genworth

04 May 2017 4:18PM
Mortgage delinquencies managed by insurer Genworth Australia nudged higher over the three months to March 2017 quarter and have crept up by around one quarter over the last year or so.The proportion of high range loan to valuation ratio loans insured by Genworth also continues to wane (see graph, right), an indicator that APRA's first round of macroprudential measures (aimed at restraining investor loan growth) had their desired effect.A presentation posted yesterday sets out the climb in the delinquency rate at Genworth since early 2015, when the rate was 0.36 per cent.At the end of March 2017 the rate hit 0.48 per cent, a rise of two basis points over three months and eight bps over one year.By geography, delinquencies conform to some degree to past patterns. On the other hand, mortgage stress in "resource" states has worsened markedly.In Western Australia the delinquency rate for Genworth lifted 25 bps to 0.78 per cent. In Queensland the lift was 13 bps to 0.68 per cent.In the supercharged property markets of New South Wales and Victoria the rates at the end of March were 0.31 per cent and 0.38 per cent respectively.Genworth Mortgage Insurance Australia Ltd otherwise produced an ordered first quarter profit, one yet to be disturbed by the (approaching) loss of its second largest customer.Genworth reported a net profit of A$52.2 million (down 22 per cent from the same quarter in 2016) and underlying NPAT of $68.3 million for the quarter ended March 2017, the latter up ten per cent.The company said it expects gross written premium in 2017 to between ten per cent to 15 per cent per cent less than in 2016, "subject to the timing and extent of any changes in the customer portfolio."

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