**Genworth Financial Set to Receive $750 Million from Santander PPI Ruling**
Genworth Financial Inc. anticipates receiving approximately $750 million following a UK court’s ruling that found Banco Santander SA responsible for losses related to the mis-selling of payment protection insurance (PPI) policies prior to 2005. These policies were originally sold by GE Capital Bank, which Santander acquired in 2009. The underwriting of these policies was handled by two Genworth units that were sold to Axa SA in 2015.
On Friday, the UK court determined that Santander was liable for Axa’s losses associated with these PPI policies, awarding Axa around £680 million. In accordance with a previous agreement with Axa, Genworth stated it expects to receive about $750 million from this judgment. Axa, in a separate announcement, indicated it would be entitled to approximately £120 million from the ruling.
Following the news, Genworth’s shares surged by as much as 8.7% in New York. In response to the ruling, Santander issued a statement expressing that it does not anticipate the net impact of the judgment to be significant, citing existing provisions and potential legal avenues available to them. The bank also confirmed its intention to appeal the decision.
The mis-selling of PPI policies has been recognized as the most costly scandal in British banking history. These policies were designed to cover some or all of a borrower’s loan repayments in cases of accident, illness, involuntary unemployment, or death. However, they were often sold using aggressive tactics, frequently without full disclosure of their terms. The cost of these policies could range from 13% to over 50% of the total loan amount. Regulatory scrutiny began in the mid-2000s, leading to British banks paying out tens of billions of pounds in refunds in subsequent years.
**FAQ**
**What is the significance of the UK court ruling for Genworth Financial?**
The UK court ruling is significant for Genworth Financial as it expects to receive approximately $750 million from Banco Santander due to losses related to the mis-selling of payment protection insurance policies, marking a substantial financial gain for the company.
