Genworth (GNW) Surges 9% as Firm Expects $750-Million Additional Cash

We recently published 10 Shares Explode as Earnings Impress. Genworth Financial, Inc. (NYSE:GNW) is one of the best-performing stocks on Friday.

Genworth Financial saw its share prices rally by 8.99 percent on Friday to end at $8 apiece as investors cheered a UK court’s favorable ruling to insurance giant AXA that could help the former recoup $750 million in cash payments.

The case stemmed from the mis-selling of payment protection insurance (PPI) before 2005 by GE Capital Bank, which was acquired by Santander in 2009, that resulted in AXA’s losses related to more than 650,000 individual customer complaints about PPI policies.

AXA, which inherited the liabilities for its acquisition of two subsidiaries of Genworth Financial, Inc. (NYSE:GNW), paid almost 5700 million pounds worth of redress to consumers and compensated complaints.

The UK judge eventually ruled that AXA “has a valid claim for an indemnity” against Santander in relation to the redress payments and ombudsman fees.

For its part, Genworth Financial, Inc. (NYSE:GNW) is entitled to receive $750 million as part of its agreement with AXA as soon as the latter recovers losses.

“Genworth plans to deploy any recoveries in line with our stated capital allocation priorities: investing in growth through CareScout, returning cash to shareholders through our buyback program, and opportunistically paying down debt,” the company said.