Challenger flags possible exit from banking

Working with financial advice groups and independent financial advisers has helped Challenger drive an 11% increase in domestic retail annuity sales to $2.4 billion.

At the same time the company has signalled it is reviewing the future of Challenger Bank.

Announcing its full-year results to the Australian Securities Exchange (ASX) today Challenger said it had increased normalised net profit before tax by 19% to $472 million which was at the upper end of its guidance range.

The Board declared a 15% increase in the full year dividend of 23 cents per share fully-franked.

The company has commenced a strategic review of Challenger Bank to consider “if the bank will realise the expected benefits in the timeframe anticipated, and its alignment with Challenger’s strategy”.

The company said that since acquiring the bank in 2020 market conditions had changed and it was becoming apparent the bank is unlikely to realise the expected benefits anticipated.

It said it was considering all options in relation to the bank and had appointed Gresham Partners to assit,.

Commenting on the results, Challenger managing director and chief executive, Nick Hamilton said it was a strong outcome delivered against a challenging external backdrop including market volatility, economic uncertainties as well the ongoing imp ats of the pandemic.

He noted that the Life business had recorded book grown of 14% driven by strong Life sales of $9.7 billion, with institutional sales up 68% to $6.7 billion reflecting the firm’s continued focus on expanding relationships with institutional partners.