October 30, 2019 / 12:02 AM / 14 days ago

Australia's Genworth Mortgage third-quarter profit surges 30%, shares hit record high

(Reuters) - Genworth Mortgage Insurance Australia Ltd (GMA.AX) on Wednesday posted a nearly 30% jump in its third-quarter underlying net profit, prompting its shares to hit an all-time high as the company signaled signs of stability in the property market.

Underlying net profit, which excludes one-off items, came in at A$26.5 million ($18.18 million) for the three months ended Sept. 30, compared with A$20.4 million a year ago, the company said.

“We are beginning to see signs of stability across metro Sydney, Melbourne and Brisbane with more favorable market conditions acting as a catalyst for greater activity in the housing market,” said Chief Executive Georgette Nicholas.

Genworth protects lenders from mortgage defaults by investors or homeowners. The company’s quarterly numbers point to signs of a recovery in the Australian property market, following a two-year downturn that had eroded household wealth and undermined the broader economy.

Australian house prices were headed for their strongest month of gains since mid-2017, data showed last week. Record-low interest rates in the country and easier lending laws have prompted a rise in lending volumes.

Shares of the insurer were trading up 12.3% at a record high of A$4.02, as of 2340 GMT, while the broader market dipped 0.3%. The real estate subindex .AXRE rose about 0.5%.

Sydney-based Genworth said its gross written premium rose 24.4% in the quarter due to growth in its traditional lenders mortgage insurance.

In a separate statement, the insurer said it had renewed a contract with Commonwealth Bank of Australia (CBA.AX) to provide mortgage insurance services until end-2022.

Reporting by Ambar Warrick in Bengaluru; Editing by Christian Schmollinger and Sherry Jacob-Phillips

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