MBIA, the largest financial guarantee insurer in the U.S., has reported a net loss of $2.4 billion for the first quarter of 2008, compared with a net income of $198.6 million for 2007's first quarter.
The net loss a share for the quarter was $13.03, compared with net income of $1.46 a share last year.
The loss was the result of a pre-tax unrealized loss of $3.6 billion on insured credit derivatives, which included $0.8 billion of credit impairments.
But the troubled bond insurer is keen to stress that, while the size of the loss is attention-grabbing, it believes the mark-to-market figure is not representative of actual expected losses.
"MBIA continues to be a sound financial institution. We have ample liquidity, our balance sheet is built to withstand credit stress levels many multiples of what we're experiencing now, and our business model is proving that we are adequately capitalized to satisfy any potential claims on our insured portfolio," said Jay Brown, MBIA chairman and chief executive officer. "While our operating results this quarter were clearly disappointing, they are consistent with developments
in the credit markets."
Total revenue for the first quarter of the year was $711.4 million, down 4% on the $741.7 million reported in last year's first quarter.
