MetLife Inc. will not participate in the Treasury Department’s capital purchase program, the New York-based insurer said Monday.
The company issued the statement in response to widespread speculation that life insurers may be the next group of financial services companies to seek a federal bailout.
One rival insurer, Genworth Financial Inc., saw its shares tumble 18 percent Monday, after its bid to qualify for the $700 billion program expired without Treasury approval. That failure cost the insurer its planned purchase of Minnesota-based InterBank, denying Genworth much needed capital.
MetLife, which launched its federally chartered bank holding company, MetLife Bank NA, in 2001, said it has about $5 billion in excess capital and a strong balance sheet. The company said it has already taken actions to reinforce its financial position, including a $2.3 billion stock offering in October and the sale of over $1 billion in debt earlier this year.
“We are confident that we have the financial strength to continue to succeed now and over the long-term,” said C. Robert Henrikson, the company’s chairman, president and chief executive. “We have therefore decided not to participate in the program.”
Investors will get more insight into MetLife’s financial health when it reports its first-quarter results after the market closes on April 30.
MetLife did say it is one of the 19 U.S. banking organizations taking part in Treasury’s capital planning exercise. The “stress test,” as it is commonly called, was started in March to determine which financial institutions might need more capital if the economy eroded further.
A company representative would not say if MetLife expects to seek government funding from other programs launched in response to the economic crisis.
MetLife shares gained $1.77, or 6.6 percent, to close Monday at $28.79 and was up 20 cents in aftermarket electronic activity. The stock has traded between $11.37 and $65.50 in the past 52 weeks and is down about 17 percent since the start of the year.
Copyright 2009 The Associated Press.