Helia Group (ASX:HLI) said its supply and service contract with Commonwealth Bank of Australia (ASX:CBA) could potentially not be renewed beyond the expiry on Dec. 31, according to a Monday Australian bourse filing.
The banking group informed the firm that it was engaged in exclusive negotiations with an alternate provider for the provision of external lenders mortgage insurance services to the lender and if the talks are successful, the firm anticipates that its contract will not be renewed.
Helia will continue to generate gross written premiums from the lender until the end of fiscal 2025 and recognize revenue associated with inforce policies over the next 15 years, per the filing.
The absence of new business from the banking group from fiscal 2026 will likely "increase the level of organic capital generation and scope for further capital management activity." Helia's previously issued guidance remains unchanged.
Helia Group's shares fell past 27% in early trading on Monday, while Commonwealth Bank of Australia's shares gained about 1%.
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