OPINION: Six months into his new job, Nick Hamilton is undertaking a strategic reset that is likely to mean getting out of banking two years after buying into it.
as chief executive of Challenger was greeted with the sort of sharemarket battering normally reserved for a company in deep trouble.
Also, the 57 per cent decline in statutory net profit to $253.7 million did not help sentiment. This was caused by the plunge in the value of assets in the life company, which has about $3.77 billion in sub-investment grade debt.Hamilton issued new guidance on Tuesday for the 2023 financial year of net profit before tax of between $485 million and $535 million. But the midpoint of this forecast was below the broker consensus of $530 million.
Hamilton says he is pleased with the growth in institutional sales of annuities which is mainly coming from industry superannuation funds. He highlights the forecast that $76 billion in super savings will move each year from the accumulation phase to the retirement phase.
When the bank was purchased, Challenger’s previous CEO, Richard Howes, said it was “highly strategic”. But the cost of integration and operational costs of running it make it uneconomic for Challenger.
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