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Challenger upgrades FY22 net profit guidance

Challenger’s assets under management dipped 8 per cent on the quarter following the sale of Whitehelm Capital.

Challenger expects its normalised FY22 net profit before tax guidance to sit towards the upper end of the $430 million to $480 million guidance range.

In an ASX listing on Thursday, Challenger reported a third quarter life sales of $2.7 billion, up 10 per cent driven by strong institutional and retail annuity sales.

Total life new flows were $491 million for the quarter, including annuity net inflows of $286 million and other life inflows of $205 million.

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“The life business maintained its impressive performance, with book growth of 2.8 per cent for the quarter. Sales growth exceeded 10 per cent across both institutional and retail, reinforcing the success of our strategy to extend our customer reach and broaden our distribution channels,” said managing director and chief executive officer, Nick Hamilton.

Funds Management funds under management (FUM) was $100 billion, down 8 per cent for the quarter, primarily reflecting the “derecognition” of $5.2 billion of FUM following the previously announced sale of Fidante Partners’ 30 per cent equity interest in Whitehelm Capital to PATRIZIA AG.

Excluding this impact, FUM reduced by 3 per cent for the quarter and included negative investment market movements of $1.9 billion and net outflows of $1.7 billion.

“The Funds Management business continues to see significant opportunities in both Australia and offshore,” Mr Hamilton said.

Turning to its newly acquired banking business, Challenger said the integration of the bank is “well advanced”.

In the first half of 2022, Challenger completed the acquisition of its digital bank, MyLife MyFinance Limited (MLMF).

“We expect to commence corporate and SME lending shortly, which will support sales growth and margins,” Mr Hamilton said.

Looking ahead, the CEO said “Challenger remains on track to achieve full-year profit guidance and now expects to be towards the upper end of the range”.

“As we look to the future, we are well placed to continue our growth trajectory, meet the needs of more customers and deliver on our purpose to provide financial security for a better retirement.” 

Challenger upgrades FY22 net profit guidance
net profit guidance
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