Genworth releases 1Q 2015 results
Monoline lenders mortgage insurer (LMI) Genworth Mortgage Insurance Australia (ASX: GMA) released its 1Q 2015 earnings report before the open this morning, together with its associated investor presentation.
GMA has struggled to maintain market share seeing its gross written premiums off by 20 per cent from $159.7 million to $127.7 million since the prior comparative period (pcp) 1Q 2014.
Despite this material decline in revenues, relatively steady unemployment and benign inflation have helped to keep delinquency rates favourable for the post 2009 book years, allowing net profit after tax (NPAT) to rise substantially by 29 per cent,
In truth, the increase in NPAT was almost entirely driven by a material pre-tax $28.3 million mark-to-market gain on GMA's investment portfolio, and underlying NPAT was stone dead flat (+0.0 per cent) despite the gross written premium dropping by a fifth from the pcp.
Delinquency rates favourable
More interestingly, deliquency developements - which are traditionally seasonally weak in Q1 - held up well.
Source: ASX: GMA
The portfolio delinquency rate has ticked up marginally to 0.36 per cent from 0.34 per cent in 1Q 2014, but more importantly post 2009 delinquency rates by book year have continued to perform very favourably relative to the preceding five book years.
Homeowners are clearly enjoying 40 year low borrowing rates, with fixed rate products for new borrowers in the past fortnight even surfacing with a incredibly appealing "3 handle".