First Impression: Challenger-CGF- FY16 Result

Outlook: Overall this is a solid update, with strong evidence in the presentation that the new partnerships are working, with Colonial and VicSuper drawn out, and with Suncorp, ClearWealth and Link noted as a potential future growth options. “In terms of our financial targets for FY17, Life normalised COE guidance is a range of $620 million to $640 million. Challenger continues to target a normalised return on equity of 18% pre-tax and expects to maintain a fully franked dividend payout ratio of 45% to 50% of normalised profit, subject to prevailing market conditions.”