MBIA, the Armonk, New York-based bond insurer, has posted a decline in its second quarter net income as demand for municipal bond insurance continues to fall.
The insurer reported second-quarter net income of $187.6 million, or $1.37 a share, compared to $218.4 million, or $1.49 a share, in the same period last year.
In the US, MBIA said that direct premiums fell 28% to $144 million while in markets overseas they fell 44% to $57.5 million. US structured-finance premiums fell by 15% to $33 million, whereas overseas units premiums rose by 42% to $94.4 million.
Difficult market conditions combined with the falling demand for municipal bond insurance and increased competition are expected to hinder the company’s aim to meet full-year earnings targets. MBIA had forecast 10 to 12% earnings per share growth at the beginning of the year, a target that seems less likely to be reached based on the Q2 results.