Shares of Genworth Financial Inc. plummeted Monday, as investors responded to last week's news that the struggling life insurer is ineligible to participate in the Treasury's Troubled Asset Relief Program (Tarp) after missing a deadline the Treasury won't extend, the Wall Street Journal reports.
In afternoon trading, according to a Reuters report, Genworth's shares were down 58 cents, or 21.1%, at $2.17 on the New York Stock Exchange, after earlier falling as much as 30.5% to $1.91.
However, the Journal says the stock is still up 11% on the month due to a general upswing in financial stocks, as well as speculation last week Genworth and other life insurers would be granted access to Tarp funds.
Late last Thursday, reports the Journal, Genworth announced it was notified by Treasury that the deadline it set for approval by the Office of Thrift Supervision to become a bank holding company wouldn't be extended. As a result, Genworth said it won't be able to complete its intended acquisition of Minnesota-based Interbank. The two companies had entered an agreement last November.
Genworth announced it would pursue other options, including asset sales, to enhance its financial position, Reuters says.
"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," said Genworth CEO Michael Fraizer in the company's late-Thursday release. The Journal reports that Frazier added that since November, Genworth has made "significant progress enhancing our capital levels and flexibility."
Last week, INN reported that Hartford Financial Services Group Inc., MetLife Inc., Lincoln National Corp. and Prudential Financial Inc., among other life insurers, were granted access to Tarp funds.
