Half Year 2022 Challenger Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Just a couple of questions. Maybe just starting on group costs. 16% cost growth this half on pcp. And I know sort of the bank coming in, obviously, contributed to that, but I think you said ex that it was 13%, which just sounded a little bit high given the headcount. Didn't seem up that materially on an average basis relative to last year. I think it was up only 2% on our calculation. So just wondering if you can unpack that a little bit more and then sort of give us a feel for how you're thinking on a go-forward basis relative to the $147 million base this half. What sort of wage inflation you're seeing moving through the organization and how much additional headcount around factors like the bank needs to come in, in the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 16, 2022 / 11:30PM, CGF.AX - Half Year 2022 Challenger Ltd Earnings Call

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Okay. And maybe just rolling that discussion into sort of a broader question around the guidance -- it's been raised a few times more divisional levels, but the midpoint of your range for this year would require your second half to be 8% below first half. So what -- which across each of the divisions, I'm just struggling to understand given sort of wider credit spreads in Life and industry rates coming through pretty annuity book at the end of the period. Funds Management seems to have pretty good traction as well. Why that would be the case that we'd get profits going backwards in the second half of the year? It doesn't sound like your flagging costs will be particularly large step-up across the group in the second half?

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Rachel, just on the $7 million contribution from alternatives, which you spoke about bringing forward some of the margin from second half, you seem to be calling out $5 million high one-off distribution costs, which largely offset that. And that doesn't really seem to be a net drag into second half. Should we be viewing that net contribution across both those items?

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : All right. And maybe just a final question for Nick around sort of the broader Life business -- taking over as CEO, we've seen some of your predecessors use that as an opportunity to reconsider the normalized earnings framework and some of the assumptions underpinning that around the Life division. Just wondering if you could offer your thoughts on that and sort of -- particularly in light of the fact over the last 10-or-so years, it's underperformed those assumptions.