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Shares in Genworth Mortgage Insurance Australia (ASX:GMA) have slumped to the benchmark index’s worst performer after Westpac Banking Corporation (ASX:WBC) pulled a deal with the company.
The mortgage lender insurance firm has advised Westpac is terminating an agreement for the provision of lenders mortgage insurance with Genworth following a strategic review.
Genworth protects lenders against loss should borrowers default on their home loans and counts the major banks as some of its customers.
The company says the full effect from the termination of Westpac’s contract on Genworth’s net earned premium will likely be felt in the 2016 financial year and beyond.
The company’s stock has moved more than 18 per cent lower in morning trade but is also trading ex-dividend, paying a 24.6 cent fully franked dividend.
Genworth Mortgage Insurance Australia reported a net profit of $324.1 million over the 2014 calendar year.
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