Genworth Financial was told by the U.S. Department of the Treasury that the deadline it set for approval by the Office of Thrift Supervision (OTS) of Genworth's application to become a savings and loan holding company passed before the OTS completed its review of the insurance firm's application. The Treasury Department will not extend the deadline.
Genworth will thus not complete its intended purchase of InterBank, which is based in Maple Grove, Minnesota, nor will it be eligible to participate in Treasury's Capital Purchase Program (CPP). The CPP was established for firms that own a thrift.
"As we noted on prior occasions, CPP participation by way of a thrift acquisition was only one of the strategic levers Genworth has considered to provide another level of capital flexibility to address unforeseen events, and the nature of that program has continued to evolve," said Michael Fraizer, Genworth chief executive officer. "Since Genworth's initial CPP application in November, we have made significant progress enhancing our capital levels and flexibility using various strategies including reinsurance, refinements in targeted markets, dividend reductions, risk mitigation and expense streamlining. Genworth will continue to benefit from these actions. In addition, we remain comfortable with our target of a consolidated life insurance company risk-based capital ratio of 350 percent or above for year end 2009. We ended 2008 with about $2.0 billion of capital across Genworth in excess of levels required for targeted ratings or regulatory requirements. We continue to progress in our evaluation of additional strategic opportunities ranging from selected asset sales to other governmental programs that could provide additional financial flexibility, and we will pursue these where we believe it makes sense."