Good morning. I'm Mark Chen, Challenger's General Manager of Investor Relations, and welcome to today's 22 full year results briefing. We're coming to you today from our Martin Place office in Sydney, and today's briefing will be conducted online. Today's presentation will be followed by a question-and-answer session. You can ask your question via the online portal or via the telephone. Today's presentation will be provided by our Chief Executive Officer, Nick Hamilton, and Chief Financial Officer, Rachel Grimes. They'll be joined by Peter Schliebs, our Life Chief Investment Officer for Q&A. I'll now pass on to Nick to get us underway. Thank you, Mark, and good morning. Let me begin by acknowledging the Gadigal people of the Eora Nation, upon whose traditional lands we meet today, and pay our respects to their elders present and emerging. Welcome to everyone who's joining us today. It is a privilege to be joined by Chief Financial Officer Rachel Grimes to deliver Challenger's 2022 full year result. Today, I'm pleased to report the progress we are making to meet our potential and to deliver for our customers, our employees, and our shareholders. We are living our purpose of helping provide financial security for a better retirement. In today's result, we've demonstrated our capacity to meet the changing macro and market environment. We've demonstrated the value of our core franchises, the improving rate environment for annuities, our success building new customer channels, the strength of our Funds Management business, and the benefit this diversification continues to make. In FY 2022, Challenger delivered improved shareholder returns with both ROE and dividends increasing. I'm sure we all recognize that the current market environment is very dynamic, and you will see in today's result a business well-positioned with a strategy to deliver long-term growth and value. The macro environment is generally supportive for our business, and we are strongly capitalized as we move into the new financial year. We have achieved a lot as a business this year, and what I'm most pleased about is the great capacity of the Challenger team to remain focused, to understand our strategic imperatives, and to work together. There are four areas we will be covering with you this morning, our positive financial performance, the operational highlights which set us up for future success, the macro and market environment for which we are well-positioned, and a view into the future in terms of strategy and outlook, including comments on today's announced strategic review of the Bank. Normalized net profit before tax came into the upper end of our guidance at AUD 472 million, an increase of 19% on the previous year. Widening credit spreads and market volatility saw unrealized mark-to-market investment experience of -AUD 81 million. Since June, we've seen credit spreads start to tighten. The unrealized mark-to-market impact can be seen in our statutory profit, which was AUD 254 million for the year. Total life sales were up an impressive 40% to AUD 9.7 billion with strong reinvestment rates on maturities. We're starting to see the positive impact of higher interest rates. For example, our three-year benchmark term annuity is at 4.3% this week as compared to 1.4% this time last year, which is a materially better client proposition. In the second half, our retail sales benefited from higher rates in our lifetime and term business, and we have seen demand for longer tenor annuities increase. We recognize that the recent environment has proved challenging to deliver meaningful shareholder value. We remain committed to our Group ROE target of RBA cash rate plus 12%. Our Group ROE was up 70 basis points to 11.9%, and excluding the Bank would have been 12.5% and above target, underscoring the strength of the business. Despite the market volatility in the final quarter, we ended the year with AUD 1.8 billion of Group excess regulatory capital. This represents 1.68 x the minimum required amount, and the life company's capital was towards the top end of our 1.3-1.7 range. The strength and flexibility of our capital position will give shareholders further confidence in Challenger's future. The board has declared a full year dividend of AUD 0.23 per share, fully franked up 15% from last year. In FY 2022, we made important strategic decisions that will support the future of the company. As we outlined in May at our Investor Day, we announced a plan to broaden our customer and product reach and to grow the role we play in our customers' lives, all underpinned by our One Challenger approach. This recognizes the whole, such as our strong brand and unique capabilities across the Group, is much greater than their individual parts. The work supporting our One Challenger approach includes numerous initiatives which are well underway and will continue to progress this year. CIP Asset Management will soon rebrand as Challenger Investment Management. Our multi-affiliate platform, Fidante, will undergo a brand refresh, maintaining the contemporary position of the business. We are expanding our brand to encompass a wider retirement offering. In March, the market-linked annuity was launched, providing our customers an expanded lifetime retirement offering and broadens the discussions we can have with financial advisors. We've seen good interest from financial advisors for a product that combines the benefit of a lifetime income stream and exposure to investment markets. With the passing of the Retirement Income Covenant, we've seen a noticeable pickup in work by Australian super funds to develop long-term retirement solutions. Recognizing this, we've brought together our Group solutions and life investment capabilities under single leadership to ensure we are focused on the role that we can play. The evidence of the role of a lifetime income is compelling. A retiree who shifts part of their assets from savings to a lifetime income stream is given the confidence to spend, or said differently, is directly linked to a retiree gaining greater enjoyment from the savings that they have accumulated through a lifetime of work. Australia has an opportunity to design the world standard in retirement income, which would maximize the welfare of Australian retirees. Our market-leading distribution capability was again recognized with Fidante named Zenith Distributor of the Year. To build Group alignment, we have reorganized our sales, marketing, product, and servicing capabilities into a central customer division, streamlining and focusing our customer-facing teams. The needs of the customer are now very much at the center of our business. Through our Fidante team, we offer investors an exceptional range of managers and asset classes. This year, we added two new affiliates, Ox Capital and Cultivate, further diversifying our offering and building growth for the long term. We have progressed plans to expand our strategic partnerships via two new joint venture opportunities with SimCorp for investment administration and Apollo for lending, which I'll talk more about in a moment. Our operating performance can be summarized by the clear shift towards the One Challenger approach, putting the customer at the center of our business, launching innovative new products, and establishing a range of new partnerships to support long-term growth. These initiatives will go toward building a more diversified business and meeting more customer needs. They support and build upon our core franchise and position us well for growth in the future. This is a strong sales outcome, benefiting from our diversification strategy and more recently, the changing and supportive macro environment. Total life sales were up 40%, benefiting from new institutional clients and strong reinvestment across institutional. In our retail business, there are signs that higher rates are starting to stimulate demand. Strong annuity sales across each of our segments translated to book growth of 14% for the year. Breaking this down, we can see the clear benefit in Challenger Life's diversification strategy. Institutional sales were particularly strong, up 68% to AUD 6.7 billion, which included new clients and reinvestments. Our attractive term and Index Plus product offering is resonating broadly across institutional channels. This strategy has served us well, with higher institutional sales working in recent years to offset lower retail sales. With the rapidly changing macro environment, we've started to see the impact of higher rates across our retail sales, which were up 11% to AUD 2.4 billion. In the final quarter, retail term sales were up by over 30%. Challenger has strong long-term relationships across IFA and advisor networks, and the team have been successful adding new relationships this half, further broadening our customer reach. These results demonstrate our life business is in great shape, well-positioned to capture the opportunities presented by the environment for savers over the past few years. Today's high rate environment has become more supportive for savers, and we expect it will stimulate new business sales for Challenger while also supporting future profitability and ROE. As a practical example, our benchmark three-year term annuity rate is up 290 basis points over the year. We've maintained our pricing discipline through this period, ensuring we balance returns and offering attractive rates to our customers. The steeper yield curve is starting to help lengthen the product tenor. The yield curve translates to higher pricing for longer durations, increasing the attractiveness of our longer dated products. You can see this shift to longer term products quarter on quarter over the year in the right-hand graph. In Q4, for example, around 75% of new business term sales were greater than two years, demonstrating the impact higher interest rates has on product tenure. Volatility in global and domestic investment markets and widening credit spreads impacted the valuation of Life's investment portfolio. This chart shows the expansion in credit indices over the second half and is consistent with the movements we saw across our fixed income portfolio, which resulted in unrealized mark-to-market losses. Given we hold our investments to maturity, our expectation is that these unrealized losses reverse over the duration of our holding period. Pleasingly, our capital position remains strong at 1.6 x PCA. Looking forward, wider credit spreads are supportive for our new business margins, especially where we write longer dated business. Funds Management has delivered a solid outcome this year, thanks to our retail distribution strength and diversified platform of managers. Higher earnings benefited from higher average FUM and stable margins. In what was a volatile market, we were especially pleased with the flows performance of our newer affiliates, which underpins future growth. Fidante welcomed two new managers this year with Ox Capital, an emerging markets equity affiliate, and Cultivate, a new affiliate targeting emerging opportunities in the agricultural sector. There remains significant capacity for growth in Funds Management from both existing managers and new managers. The team have a growth strategy that includes new product and broadening our distribution reach. The recent appointment of Victor Rodriguez as CEO of Funds Management will support further growth in this business. Vic is a highly respected leader and has led significant success in our fixed income business, developing new products that have secured the highest investment ratings, winning new institutional clients, including the Australian Office of Financial Management, and overseeing a critical component of the Life investment program. I'd like to spend some time on our strategic partnerships. These are key to our diversification strategy because they build out from our core business to generate new and diverse sources of revenue and long-term value. We have a track record of building strong partnerships, evidenced by the suite of affiliates in our Funds Management business and MS&AD Group in Japan. We're building further on our MS&AD relationship with Challenger's real estate business, recently awarded a mandate to acquire and manage Japanese real estate on behalf of Mitsui Sumitomo Primary Life Insurance. With Apollo, we've now entered into a shareholder agreement to establish a joint venture to build a lending business in Australia and New Zealand. Challenger and Apollo have been working closely over the past period, building our relationship and deepening our understanding of the opportunity. The joint venture will provide various financing solutions across a range of sectors. The joint venture will be equally owned, bringing together Challenger's operating platform and domestic expertise with Apollo's extensive global scale and multi-asset credit investing capabilities. Our investment administration joint venture with SimCorp is progressing well. With our partner, SimCorp, we've now formed its board and will soon announce an independent chair who is highly experienced and highly respected in investment management circles. Interest from prospective clients of this venture is encouraging, and we've commenced early-stage discussions with a number of parties. We expect the business to be formally operational later this calendar year. These are exciting partnerships, given the global leadership position of the partners. We've established them because they combine the best of both partners' capabilities, creating competitive advantages in the areas where we've chosen to play, much of it unrealized or underserved. Our business is in great shape, benefiting from our diversified operating model. I'll now hand over to Rachel to take you through the financial results in more detail. Thank you, Nick, and good morning, everyone. As you have heard, Challenger has delivered a very strong result that reflects the underlying strength of our platform and the diversification of our business. In FY 2022, we achieved normalized earnings before tax of AUD 472 million, which was towards the upper end of our guidance range of AUD 430 million-AUD 480 million. Normalized earnings before tax increased 19%, driven by strong contributions from Life and Funds Management, which were up 19% and 17% respectively. This was partially offset by losses from the Bank. Statutory profit after tax was normalized profit at AUD 254 million due to lower investment markets and wider fixed income credit spreads, resulting in an unrealized investment experience after tax loss of AUD 81 million. I will cover this in more detail later in this presentation. Looking at the Group results in more detail. Challenger's total income increased by 14%, reflecting stable margins and growth in average assets under management. Expenses increased by 7% or AUD 19 million, of which AUD 13 million relates to the Bank. Excluding the Bank, expenses increased by only 2%. I'll take you through the drivers of income and expenses in more detail shortly. Normalized NPAT was AUD 321 million, an increase of 15%. Significant items were a post-tax gain of AUD 14 million with a AUD 31 million gain from the sale of Whitehelm Capital and a AUD 13 million gain from the sale of Accurium. This was partially offset by AUD 19 million impairment of goodwill on the bank acquisition and AUD 11 million relating to other costs. Pre-tax return on equity was 11.9%, which was up 70 basis points from last year and marginally below our ROE target due to the impact of the Bank. Excluding the Bank, Challenger's normalized ROE would have been 12.5%. Group assets under management closed the half at AUD 99 billion, down 10% on the corresponding prior period, with strong life book growth offset by lower FUM from markets and outflows. Now looking at the income and expense drivers. Income was AUD 777 million, an increase of AUD 95 million or 14%, driven by an increase in average assets under management and stable margins across both Life and Funds Management. It's important to note that in Funds Management, while the income margin was stable in FY 2022, we saw FUM-based margin increase. Life income or normalized cash operating earnings increased by 14%, reflecting greater cash earnings from a 14% increase in average investment assets. In Funds Management, the net income increase of 13% reflected a 13% increase in average FUM. Expenses were AUD 301 million, an increase of 7%. This largely reflected costs associated with the recently acquired b ank and personnel costs due to higher FTE and lower levels of annual leave taken throughout the year. Other expenses were 5% down due to the non-reoccurrence of a AUD 10 million software impairment that we took in the second half of 2021. Excluding the Bank, expenses were up 2%, demonstrating our disciplined cost focus. The Group cost-to-income ratio was 38.7% and decreased by 50 basis points on last year. Looking at the Life business performance in more detail. As mentioned by Nick, the continued success of our sales diversification strategy resulted in strong Life sales of AUD 9.7 billion, including annuity sales of AUD 5.1 billion. Institutional sales increased by 68% to AUD 6.7 billion, reflecting our focus on expanding relationships with institutional partners. The strong sales translated into Life book growth of 14.3%, which in turn drove growth in investment assets. Average investment assets increased by 14% on FY 2021, and with a stable normalized cash operating earnings margin of 2.6%, cash operating earnings growth was also 14%. Expenses decreased by AUD 3 million or 3%, largely reflecting lower brand and marketing costs and reduced travel expenses. With higher income and lower expenses, Life EBIT was AUD 472 million, 18% above FY 2021. Life's PCA ratio was down 3 basis points to 1.6 x, which is toward the top end of Life's PCA ratio range of 1.3x-1.7x. The Life company continues to remain very strongly capitalized and has significant financial flexibility. Now turning to Life's margin trends. We have provided you today a summary of the key margin movements, and there is further detail in the analyst pack. The FY 2021 margin benefited from the early repayment of an asset-backed security, representing AUD 12 million or 6 basis points. In FY 2022, we generated a cash operating earnings margin of 2.6%, which is stable on FY 2021. Excluding the impact of the asset-backed security fee, the product cash margin was up 1 basis point, with lower asset returns of 16 basis points offset by a 17 basis point reduction in interest expenses. It is important to note that other income was stable despite the impact of the Accurium sale, which was offset by higher Life risk income. Accurium historically represented 3 basis points of margin. Lower asset returns were due to lower yields on fixed income securities and lower property yields. These were fully offset by annuity pricing initiatives. We operate a spread-based model with the cost of funds or our annuity pricing adjusted for changes in investment yields in order to generate a net spread. You can see from the chart on the right-hand side that the product spread has remained broadly stable over the last couple of halves. Normalized capital growth was four basis points higher as a result of an increased allocation to equities, and the return on shareholder capital was up, reflecting the higher interest rates. Life sales. Life continues to deliver strong sales and book growth, underlining the success of our strategy to diversify our product offering and distribution channels. This has been against a backdrop of low interest rates and challenging market conditions, which also have included regulatory change and the impact of COVID-19. These conditions and the actions Challenger has taken to address them, including developing an institutional term annuity business, has reshaped our sales mix. Which in turn has changed the maturity profile. The flattening of the yield curve post-COVID resulted in customers not receiving a premium for term, which drove a greater proportion of annuity sales being of shorter duration, particularly one year. This slide highlights one-year institutional term sales were 9% in FY 2020, and this has increased to 35% in FY 2022. Central banks have lifted interest rates in the fourth quarter, we have a steepening of the yield curve, which has resulted in customers seeking longer duration products. As shown earlier, 74% of new business term sales in the fourth quarter were for tenors greater than two years. This compares to 50% of new business term sales in the first quarter when the yield curve was flat. Following significant levels of one-year institutional sales made in FY 2022 of AUD 1.8 billion, the maturity rate for annuities is expected to increase to 34% in FY 2023. Excluding the institutional term annuity maturities, the FY 2023 retail maturity rate is expected to be 24%, with retail annuity maturities reflecting the focus on longer duration sales. We have a strong track record of reinvesting maturities. We have achieved reinvestment rates of greater than 80% across institutional annuities, which increases the effective duration. While the maturity rate is increasing due to sales mix, what is important is the effective duration is longer through the high reinvestment rates. Now looking at the liability and asset portfolio. On a discounted basis, liabilities increased by 4% to AUD 18 billion, driven entirely by Index Plus growth. The discounted value of annuity liabilities was reduced slightly at AUD 13.6 billion, with annuity book growth of AUD 1 billion, fully offset by an increase in the discount rate reflecting the higher interest rates. Undiscounted liabilities were AUD 19.8 billion, up 8% for the year, reflecting the life book growth. Life investment assets were AUD 22.2 billion, up 3% for the year. We continue to maintain a high-quality investment portfolio to allow us to meet our liability obligations. Fixed income represents 75% of Life's investment portfolio. Within the fixed income portfolio, investment grade represented 78%, which was above our target to hold at least 75% investment grade and 1% below FY 2021, reflecting relative value decisions. Within investment grade, the quality of the portfolio improved, with BBB reducing from 22% to 17%, with increased holdings in cash and equivalents, AAA and AA-rated securities. For the year, there was a 1% increase in the allocation to equities and a 1% increase in the allocation to alternatives, with a corresponding decrease in fixed income and property. These changes reflect an increase in allocation to equities and alternatives, the outperformance of alternatives, and fair value adjustments on the total portfolio included the impact of rising interest rates. Property reflects the sale of a single property. As highlighted at Challenger's Investor Day in May by Peter Schliebs, our CIO, we are not looking to make material changes over the next year. However, within the portfolio, the following small changes will be made. Proceeds from the sale of the property will be reallocated across other asset classes, primarily into insurance-linked securities and absolute return funds in an uncorrelated nature to equity markets. Looking at investment experience in more detail. Overall, we reported a pre-tax investment experience loss of AUD 115 million for the year. This was mainly driven by wider fixed income credit spreads and lower equity markets. Fixed income recorded a negative investment experience of AUD 384 million. This reflected a significant widening of credit spreads in the second half. Investment-grade spreads increased by 80 basis points, and sub-investment-grade spreads increased by 210 basis points across the portfolio, resulting in the unrealized investment losses. As mentioned earlier, we have seen a partial reversal of spreads in July and throughout August. Credit performance remained resilient, with only 5 basis points of defaults for the year, well below the 35 basis points per annum assumption. For property, the AUD 153 million of positive investment experience largely reflects the reversal of unrealized losses we took across the property portfolio during the pandemic. All properties were subject to independent valuation in FY 2022. The equity and infrastructure losses were AUD 119 million, driven by lower domestic and international equity markets. The alternatives portfolio largely consists of absolute return funds and posted a gain of AUD 89 million and delivered a return of 11% post distributions. For policy liabilities, which are also mark-to-market, the valuation impact was an AUD 146 million gain and reflects an AUD 165 million illiquidity premium gain, which partially offsets the impact of wider credit spreads on the fixed income portfolio. A gain of AUD 23 million on policy liabilities held for hedging purposes, offset by a new business strain loss of AUD 42 million. Now let's turn to Funds Management. Funds Management EBIT was AUD 83 million for the half, an increase of 17%. The increase in EBIT was driven by higher FUM-based fee income with average FUM up 13% or AUD 12 billion. This was partially offset by lower performance fees and higher expenses. While average FUM was up, it is important to note that closing FUM ended down AUD 12.4 billion or 12% for the full year. I will cover the drivers of the movements in FUM in more detail shortly. Funds Management expenses increased by AUD 11 million or 11% as we invested in our people and added capability to support our growth initiatives. Pleasingly, investment performance has remained strong, with 98% of FUM outperforming the benchmark over three years. Now looking at Funds Management margins and FUM growth. The total net income margin was 18.4 basis points, stable on the prior year. This reflected higher FUM-based income driven by a more favorable FUM mix, offset by lower performance fees. The FUM-based margin increased by 1 basis point to 17.1 basis points, supported by a change in business mix, including higher retail business and the sale of Whitehelm Capital. As stated, FUM closed the year at AUD 93.4 billion, down AUD 12.4 billion or 12%. The decrease can primarily be attributable to institutional outflows in Fidante and negative market movements. Looking more closely at the net flows, Funds Management net flows were AUD 8.5 billion and were almost exclusively driven by Fidante. Fidante's institutional business recorded outflows of AUD 8.9 billion, reflecting the AUD 5.2 billion derecognition of FUM following the sale of Whitehelm Capital and AUD 6 billion of institutional outflows that included a AUD 5.6 billion low margin fixed income mandate redemption by a single investor. Institutional outflows were partially offset by retail inflows, which remained strong at AUD 2.3 billion for the year. The strength in our retail flows provides the opportunity to remix FUM and to optimize our margins. The Funds Management business continues to be well positioned in the current economic environment. We have a diversified model that consists of superior alpha solutions across fixed income, equities, real estate and alternatives. We continue to welcome new affiliate managers, including Ox Capital and Cultivate during the year. We are committed to delivering investors access to high-quality, differentiated investment management. Our alpha capability provides us with broad customer reach, especially in our domestic retail advised channel. We see significant opportunity with approximately AUD 130 billion of available capacity to support continued growth. Now let's turn to the Bank. In FY 2022, the Bank incurred a loss of AUD 11 million, largely reflecting costs associated with regulatory requirements and integrating the business. The net interest margin was 0.93%. Since acquisition, we have taken a disciplined approach to growing deposits as we built the bank's lending capability. Bank deposit sales were AUD 219 million since July 2021. As you may recall, when we acquired the bank, we previously expected to break even in its first year, which would have been this year, FY 2022. Bank earnings are not expected to improve in FY 2023, with a loss of AUD 10 million before tax forecasted. As Nick stated, we have commenced a strategic review of the bank, and we have also impaired the bank goodwill on acquisition, which has been included as a AUD 19 million loss in significant items this year. Turning to capital management, we continue to be strongly capitalized and maintain significant financial flexibility across the Group. We have provided a consolidated or level three equivalent capital position for the entire business, which includes our two regulated APRA entities, the Life company and the Bank. Our Group minimum regulatory requirement ratio closed the year at 1.68 x, which means Challenger is holding 68% more regulatory capital than minimum requirements. As stated earlier, Life's PCA ratio finished the year at 1.6 x, which is toward the top end of our target range of 1.3x-1.7 x. Challenger's financial strength was affirmed by Standard & Poor's, who recently reconfirmed Challenger Life's A rating with a stable outlook. Now on to dividends. Underscoring confidence in our business, the board declared a fully franked final dividend of AUD 0.115 per share, bringing the full year dividend to AUD 0.23 per share, up 15% on last year. The normalized dividend payout ratio was 48.3% in line with our target. In conclusion, we have delivered a strong FY 2022 result, which was toward the upper end of our guidance range. We remain strongly capitalized, and our Life and Funds Management businesses are positioned for growth. I will now hand back to Nick and I look forward to rejoining you for Q&A. Thank you. Thank you, Rachel. Our business is well positioned. It's an exciting time for the Australian retirement system. The focus moving from our world-class accumulation to developing a world-class retirement proposition. This sets Challenger up for a bright future. Challenger's significant competitive advantages will ensure we benefit from these structural shifts. We are a company enabled by talented people. Our businesses play in areas where we are leaders and innovators. Challenger is Australia's leading retirement income brand. Our Funds Management business is one of the country's largest active managers and with superior investment performance. We have a powerful fixed income franchise, which is Australia's largest. Supporting our capabilities are external tailwinds that will benefit our business in the long term. The macro environment is evolving, presenting both challenges and opportunities for our business, as we have outlined today. High rates are, of course, welcome news for many retirees, and we have begun to see the benefits of this in our annuity sales. At our recent Investor Day, we detailed our plans to leverage our strong brand, our expertise, and capability to meet the needs of more customers in more ways. Our new customer division will support this, bringing together people from across the Group with the skills, the resources, and talent to deliver more for our customers. Ongoing engagement with the superannuation funds provides us with confidence of the role we can play, seeking to partner with them to bring better retirement solutions to their customers. We'll further diversify our business via our announced strategic partnerships, which will create new revenue streams, leverage our core strengths, and deliver long-term benefits for all parties. Turning now to the guidance. Challenger is well-placed. We have a business that today has demonstrated our strength, our potential, and a clarity of strategy to deliver long-term value. In FY 2023, we expect normalized net profit before tax to be within the range of AUD 485 million-AUD 535 million. Our range reflects the variability of components of the income that we generate. It is a range we are confident to operate within. As we've outlined today, the underlying trends for the life company earnings are supportive for growing our COE margin. We have reflected in our guidance the lower starting fund position in the Funds Management business, and we've reflected our expectations of the Bank operating earnings. Expenses are running slightly higher this year at 5%-6%, which reflects the inflationary environment and some specific investments for growth. Since announcing the bank acquisition in December 2020, market conditions have changed, and it is becoming apparent the Bank is unlikely to realize the assumed benefits in the timeframe anticipated. As a consequence, today, I announce that we have commenced a strategic review of the business, and that we have appointed Gresham Partners to assist in the process. This is not a reflection of the team in the Bank, rather external factors, meaning our original business case is unlikely to be realized. As noted, we do not expect Bank earnings to improve, and next year we forecast a loss in the Bank of AUD 10 million before tax. We expect the review to be completed in the first half of FY 2023, and there will be no change to the Bank's operations while the review is occurring. We remain committed to our through-the-cycle ROE target of RBA cash rate, plus a margin of 12%. Ensuring we remain strongly capitalized, we'll continue to operate within our target range of 1.3x-1.7 x the PCA, and target a dividend payout ratio of 45%-50%. To summarize, today's result shows our diversification strategy is delivering. Normalized profit result was strong and towards the upper end of our guidance range. Our core life and Funds Management businesses performed well throughout significant market volatility. Capital is strong and towards the top end of our range. We have a business well-positioned to benefit from the changing macroeconomic environment, with rising interest rates supporting growth. Retirement income and financial security are needs of our community and core to Challenger's purpose. We're delivering stronger shareholder returns, with both ROE and dividends increasing. None of this could be possible without the incredibly committed team at Challenger, who I would like to thank for their dedication this year, particularly for their support of my first eight months as CEO. Rachel, Peter Schliebs, our CIO, and I will now look forward to taking your questions. I'll pass now back to Mark. Thank you, Nick. We'll now turn to the question-and-answer session. As a matter of process, we'll take questions firstly over the telephone, and then we'll turn to the online portal. Operator, are there any questions via the telephone? Thank you. Your first question comes from Matt Burnell with Bank of America. Please go ahead. Yeah, thank you, Nick and Rachel, for taking my questions. My first one, just on the second half 2022 life margin of 2.63%. You've talked to higher shareholder fund yield, lower funding rates. Are you able to talk to what the exit margin is? Thanks, Matt, for the question. In relation to the 2.63%, that we're not giving guidance for FY 2024 on the margin, but that is, you know, we've seen really positive pieces come through in terms of the interest rate increase that really only took place in the fourth quarter. We think that is the best step-off point that you should look to in relation to the margin. FY 2023. Sorry. Yes, FY 23. Apologies. Okay. Thanks, Rachel. Just following on from that, can you talk through some of the moving parts within that FY 2023 guidance? It seems like the second half margin improvement would get you towards the bottom end of that guidance. Are you able to unpack what you're thinking about life book growth, Funds Management performance fee, some of those swing factors? Sure. I'll start that, and my colleagues can join in. We've set the guidance range of AUD 485-AUD 535, Matt, and it's a range that we, you know, confident we can operate within. In building this range, I'll make a few observations. We have, you know, there's a lot of moving parts with impacts of markets, et cetera, and we've actually recut the budget a number of times leading up to it. The things that you've got to consider, specifically are the lower starting FUM for the Funds Management business, the loss that I've just spoken about in the Bank for FY 2023. I spoke to slightly higher, you know, expenses to support some new growth initiatives. As we say, there are elements of the result or our guidance in any given year which will be less certain. If I think about that from the life company side, that's the alternatives from the Funds Management side. You know, that's the dividends we've received from the affiliates, depending on markets, but also performance fees. We've factored, you know, all of that in. In terms of guidance on book growth, we don't provide that. We've spoken to the maturity rate on the book today and our confidence in what we've seen in terms of the trends for sales. As we exit FY 2022, you know, we've seen very strong trends, particularly in the retail sales around some of the longer-dated term business. I'd probably leave my comments there unless, Rachel, you'd like to add anything. No, I think you've covered that well. Thank you, Nick. Sorry, Nick, just to clarify, you're saying the guidance factors in the 80% reinvestment rate you've talked to? Yes, that's correct. Our guidance assumes reinvestment rates. Thank you very much. I'll leave it there. Thank you. Your next question comes from Kieren Chidgey with Jarden. Please go ahead. Morning, Nick and Rachel. Couple of questions if I can, maybe starting on the Bank. Nick, I'm just hoping you can unpack in a little bit more detail what exactly has changed over the past 12 months since you took ownership of the Bank. You know, is it the competitive environment? Is it the additional investment in systems and technology? Just a little bit more clarity around sort of, I guess, what has changed. The strategic outlook for the Bank would be useful. Thanks. Thanks, Kieren. Let me give you some, as much as I can. You know, I've been in the role now for eight months. You know, we came to this conclusion just recently that it was right to call strategic review. A number of things, a number of facts, frankly, have changed. If I think about where we were with the original business case, you know, we walked back from break-even in FY 2022. We've just called out the continuing losses on the Bank. You know, the additional, whether it be that loss or the additional capital that would be required to drive the Bank to a reasonable outcome and a reasonable return, is when you risk adjust it, just a very long way off, at this stage. The other, you know, countervailing force there is that, you know, the environment and circumstances for the rest of our businesses are very strong. For the life company, you know, the rising rate environment, you know, is clearly, you know, a real positive. You pointed to technology, and that will definitely, that's definitely a key part of it. You know, to succeed in this space, you do probably need a technology advantage, and the additional investment and cost to build that, vis-à-vis the other opportunities for the capital, you know, have certainly been a consideration. Probably the final one is that, you know, through the original business case, there was assumptions around the ability to leverage the Group capabilities and platform. That, you know, for various reasons has not proven to be the case. We’ve seen, you know, the cost base increase materially, you know, vis-à-vis the initial plan. Okay. I mean, how long do you expect this strategic review to take? I mean, you said it's business as usual for the bank in the interim, but I guess we had expected a ramp up in activity in the Bank over the course of 2023. Is that on hold? Kieren, that you know, that's a fair assumption. We're not going to. We don't want this to proceed beyond the first half of the financial year. You know, we're committed to being open and transparent and in appointing Gresham Partners at this stage. You know, we're definitely looking to get our skates on and move through the review quickly. As you noted, we are still open for business. The review is underway, and we look to conclude it within the first half. Okay. Just a point of clarity on the Bank guidance of -10. Does that include impairments for 2023? Is that a normalized ex impairment number? Yes. No, that's just an operating loss. That's the Rachel's called out that we've impaired the goodwill on the bank this year. I just mean. You're talking about. to credit provision. Oh, credit. Yeah. Credit impairments. Largely it does. We've applied the ECL. You've seen that increase in this period, and we would imagine that that would be at similar rates, Kieren, so not looking for an additional impairment on top of that. Okay. Secondly, just on the life business, the maturity, you know, obviously quite a step up, and I think you've explained why that's the case in terms of the mix of sales that occurred sort of over the last 12 months being much shorter duration. You know, as you've guided to slide 8 on a quarterly basis, that is starting to reverse in terms of seeing more sales above the one-year duration. This 34% maturity rate, how transitional is the 23-year in regard to maturity rates? And can you give us a bit of feeling for where you see that trending sort of more over the medium term? Okay. Well, I'll pick up some comments and I think Pete might like to add or Rachel to this. You know, we've clearly been through an environment where with very low rates it was we saw the tenor of the business shorten. With the institutional business, it was by virtue of the style of business, shorter again. If I break that apart with institutional, and we wanted to talk about the maturity reinvestment rate and the idea of effective tenor on the basis we are seeing high reinvestments. You know, the opportunity there for us, it's not just rate, but it's about our ability to offer a competitive spread. They're also using those strategies in various means across their portfolio. It's quite a diversified rationale and increasingly diversified client base there. It is institutional business. It's lumpy. You know, we just need to be mindful of that. We can feel confident, but I don't wanna say it's by any means certain. What we have actively been trying to do across the whole book, both institutional and retail, is use the opportunity that's been presented by higher rate to push the tenor of the book out. You know, clearly, you used the word transitional period. You know, history will judge that, but we're certainly making every effort across both retail and institutional to extend the tenor of the business because you know, we think it's a great opportunity for customers. You know, it's clearly from our perspective. It's business that we can, you know, extract, particularly illiquidity premium, on through the investment program. It's better. It's more profitable for us. Rachel, anything else? Well, really, I think you've captured everything there, Nick. Mm-hmm. I think our experience, Kieren, of what we're seeing, the tenor, people are looking for greater than, you know, around the two-year mark, and that's been our sales experience in the fourth quarter. While we're not giving guidance on that maturity rate, it may move as a result of people trying to find, you know, the additional credit spread opportunities there in the institutional space. Okay. The experience so far, I know we're sort of only halfway through first quarter of 2023, but can you just give us a feel for if sort of that experience has continued and, you know, the pickup in retail annuity sales is persisting? Yeah. That trend has continued, Kieren. We feel good about how we've entered FY 2023 on the retail side for sure. Okay. Just a last question on Group costs. You're guiding to 5%-6% growth. I'm just wondering what sort of impact the SimCorp and Apollo JVs are likely to have within the 2023. They're all factored into that increase, Kieren. The pleasing thing about our expenses is that it is about positioning us for growth, as well as some salary inflation, but those costs are built into our expense base. Okay. Are they material costs though, Rachel, in terms of, I mean, what? No What do they add to the cost growth for the Group? Perhaps in terms of what sort of resources, skills, is that what you're asking me? Or dollars? Just dollars. Yeah. Dollars. Just dollars. Look, it's immaterial at this point in time. You know, as those two businesses build, you know, they'll factor in. It's early days in that piece, and it's not material at this stage for FY 2023. Okay. Thank you. Thank you. Just as a matter of protocol, can I please ask callers to ask all their questions all at once, just so we can ensure that we get through all the questions today. Operator, can we just move to the next question, please? Thank you. Your next question comes from Nigel Pittaway with Citi. Please go ahead. Good morning, Nick and Rachel. Just first of all, on the Challenger Index Plus sales. Clearly, you've got to sort of sell quite a lot even to stand still in those institutional areas. How, you know, how should we think about the prospects for growth in that area, given, as I say, you've got to sell a lot even to stand still as you reinvest those maturities? Thanks. Yeah, thanks, Nigel. You know, clearly it's been very successful sales program there. The ticket sizes, as you note, are quite large for those sales. You know, what we've noted today is we've increased the number of clients to increase diversification of client, you know, which obviously reduces the single client risks as one comment. Yeah, however, I also spoke to the opportunities that we have with higher rate to drive longer dated sales. A real priority of ours is to push the tenor, whether it be the Index Plus, but that does tend to be short term, but across the whole life book, longer as a general statement of priority for us right now, vis-à-vis outright growth of book. I don't know if, Pete, if you'd add anything to that? The only thing I would add is that, you know, we continue to look at product development, both in the retail and institutional space. You know, a lot of that focus is around ensuring that we've got a product fit for a longer maturity business. Mm-hmm. you know, it's not just, you know, retail product development that we're doing, we're also doing quite a bit of work on the institutional side as well. Okay. Thanks for that. Just on your guidance, obviously, for COE margins to be up for next year, I mean, clearly there is a bit of a tailwind there, as you've said, from investment income on shareholders' funds. In terms of sort of the other forces sort of driving that more in the product margin, I mean, do you think favorable spreads will actually benefit margin, or are you having to give it that away in pricing? You know, clearly there's a minor headwind from life risk and presumably still some pressure from the short dated nature of sales. Can you maybe unpick those forces for us as to how we should think about that moving forward? Yeah. Okay, Nigel, I'll pick up and just talk about margin, you know, for a second. We price obviously over spread. If you look at the information that we've released, or we release, around where our pricing is, and you look at that relative to swap, you'll see that we have been able to use this environment, you know, as we frame it, more disciplined around, our pricing, which has been supportive, which is, you know, clearly a strategy you can use in a rising rate environment as long as you can maintain a really attractive, sales proposition or product proposition. That is across, you know, across, the curve. If you know, if you look at our one-year pricing today, the spread to swap is in the 30s where that would have been in the 60s, you know, a year and a bit ago. We're definitely, you know, being disciplined around pricing. In terms of the other trends, you know, we note the widening credit spreads and higher rates, but that really supports future sales, which again goes to the comment of, you know, focusing a longer tenor business where, you know, those drivers can be more meaningful to us. I'm gonna look at Pete again and see if he'd like to add anything to that. Yeah. I think the only thing I'd add with, you know, a lot of the commentary has been focused on margin. You know, where we're seeing a lot of our attractive opportunities are in fixed income. You know, that is a lower- Mm-hmm Capital-intensive business. You know, by nature it does come with a lower margin. Our focus from the investment side is actually maximizing ROE. We feel like the opportunities in front of us are more at this stage slanted towards fixed income investments, which are accretive to our ROE, but may not be as accretive to margin. Okay. Thank you. Thank you. Your next question comes from Anthony Hoo with CLSA. Please go ahead. Morning, guys. Can I just explore a little bit on the maturity side of your annuities? Obviously institutional annuities have grown a lot over the past few years as a proportion of your sales. If by its very nature seems to be a lot more short term, is there anything within your control that you can do to actually lengthen the tenure of institutional annuities, or is it really just, you know, driven by the customer and by its nature is always going to be, you know, very short term as opposed to retail annuities where you can, you know, use pricing perhaps to try and lengthen that a bit more? Thank you, Anthony. I think your comments are sort of reasonably there. The experience to date has been they have been shorter term business. You know, if you recall, this is a new diversification line or customer channel really for the last four or five years or three or four years. It's allowed us to build closer relationships with the superannuation funds, where on the life company side we had fewer of them. You're absolutely right to say there are ways that we can lengthen the tenor and we certainly are active in having those discussions. Providing a really attractive proposition to them in these types of businesses is one way. I made the comments about these strategies are used across a range of their investment programs. You know, they're not just filling a cash replacement or a sort of a short-term fixed income replacement strategy. They do fit more broadly in our clients' portfolios than that. We've had a very good experience of reinvestments over these past couple of years. You know, but it is large business. You know, we're working very closely with the funds around you know those you know the funds who are clients and new clients. I think those comments are right. The final one I'd make is that in building relationships with the super funds, now with the passage of the Retirement Income Covenant, we are, you know, we're engaged in more substantive discussions with supers about how they're gonna develop products for their members in retirement. You know, clearly for us, if we look long term, that, you know, that is a very high priority of Challenger in an area where we believe we have a really strong proposition to support the super funds develop their strategy. I'd see it in the context. Hopefully those comments answer your question. Just on the Retirement Income Covenant, with the discussion in relation to that, how do you expect that to play out in terms of, you know, will the products look a lot different to what you're selling at the moment? Or would it be kind of more of the same, but perhaps with a longer term tail? Anthony, I think what you need I mean, for us, Challenger is a brand leader in retirement domestically. We have a significant balance sheet and set of skills around providing guaranteed incomes. We're having a really broad range of conversations across a lot of clients right now and prospective clients around how they're thinking of developing their retirement solutions. You know, it's hard to categorize exactly where the opportunities ultimately will fall for us. You know, we feel really good about it because there's a range of potential product and solution possibilities that we can support the super funds who, you know, have built very strong allegiance with their members and who are ideally placed to support their members through the accumulation to the decumulation phase. Okay. Thanks, Nick. Thank you. Your next question comes from Simon Fitzgerald with Jefferies. Please go ahead. Hi there. Thanks for taking my questions. I've got three here, and I'll ask them fairly quickly. Nick, I just want to explore with you firstly about the ROE target. When Challenger first came up with this target that includes an RBA metric, it was probably more sort of at the mind of a stable sort of environment. Now we've got these rapid rate rises. I mean, can you sort of talk to whether it's sort of suitable. I mean, you're talking about sort of 13.8% target from 2023 onwards. I mean, even in the absence of those Bank losses, I think it would be hard to hit that target for you guys, just given the jump that it would require. Maybe you can comment on that. We're not gonna hit our FY 2023. Given what I've said about guidance, to hit the FY, if you were to extract what we expect as the loss in the Bank and also, you know, not earning the Group ROE on that capital, you know, we feel good about the rest of the business. We feel very good about where life is tracking towards, and you know, clearly funds is a low capital business. The we've always said that the transmission of higher rate through the portfolio is just not mechanistic. You know, there's a number of things that go into it, and it will take time. We're committed to the ROE target, but we do say it's through the cycle. Sure. You're saying that even in the absence of the Bank losses, you wouldn't have been able to hit that target for 2023? No. In the absence of, if we were able to earn the ROE on the Bank capital, the prospect of hitting it on our forecast would have been far closer. Okay. Understood. The second point, just in terms of what some of the banks are suggesting at the moment in terms of a term deposit war, can you sort of talk to what the sort of pricing environment is like at the moment for reinvestments and, you know, in terms of, you know, whether that sort of term deposit war is creating a bit of pricing pressure for you? Like, are you in a more competitive environment at the start of 2023 than you were at the start of 2022? Probably a couple of comments around this. I mean, we saw the term deposit market shrink materially over the last number of years, so there's very significant potential expansion back even to where it was in our previous really low rates environment. If you think about it from the life company side, we've made comments about the opportunity to offer both attractive rate but be disciplined around our pricing, or our spread. That's an important lever for us. You know, the term annuity or the annuity product does have different characteristics to the term deposit, which can be a feature benefit. The term deposit rates are not always available in all the places that customers are seeking them, and particularly I'm thinking here about you know the retail advice market through platforms. It's a little bit more nuanced than that. You know, we are on our term annuities right now very competitive relative to the highest what we see is the higher term deposit rates, so we feel we can easily you know we can compete against Sure. term deposits. Okay, also on the Apollo JV, when do you actually expect to start writing your first loans in that JV? Thanks. Yes, Simon, good question. We've obviously formally announced the entering of the joint venture. You know, there's a lot happening across lending markets domestically, and I think that's firmed up our view of the opportunity over the longer term. The teams on our side and the team on Apollo's side have built a really good rapport over this last 6-8 months, engaging, looking at the opportunities. I mean, we're going to be patient both on the opportunities that we're looking at. But you know, we'll commit to keeping you fully informed. I mean, definitely it's an attractive proposition for us, you know, longer term. Probably one comment there to add to is that, you know, already in the relationship between the two parties, you know, we are seeing referral discussions for lending activity prior to the entering of the joint venture between, you know, our fixed income teams and, you know, their origination teams in Apollo. Sorry, just one final question just on the Bank issue at the moment in terms of strategic review. I remember at the investor day, Challenger was talking about liaising with the regulator in terms of getting the lending platform all bedded down. It seems to me that potentially the capital imposed on that lending structure was a lot higher than what you first thought it would be. Would that be fair to assess? Simon, I think at strategy day, we talked about receiving approvals for. Yeah Certain of the corporate inquiry activities, which I think we characterized as taking longer than what we had anticipated. Yeah. You know, the rationale for calling a review is separate to that. You know, the base assumptions that were made at the time of the acquisition, our experience to date and what we see as we look ahead, we just, you know, to be frank, there's new facts there, and we see better uses for Group capital across the broader business than what would be required, you know, to scale the Bank here from technology and other resources perspective. Okay. That's clear. Thank you. Thank you. Your next question comes from Siddharth Parameswaran with JPMorgan. Please go ahead. Good morning, everybody. A couple questions if I can. Firstly, just on the margins in Life. You do show on slide 16 that your product spread margins have been declining very slightly, but you do also flag, I think, that, you know, you've seen the gap, I think, between the swap and the term rate close as the term and yield rate closed, I think, quite recently. I was just wondering if you could give us a guide for whether we should actually expect margins on the product side to continue to, well, I mean, to actually continue to decline or to improve. Also just wanted to clarify something you've said before, which is that insto and retail margins are similar. I just wanted to clarify if that's still the case or whether just with their different opinions, whether you actually have to invest in them differently? Okay. I might start off. Now, we're not providing sort of specific guidance around credit margins, but the trends that you'd reasonably expect would play into that are positive. We've talked about the disciplined pricing, and to the extent we can drive longer tenure business and the opportunity through wider credit spreads, you know, speak to that. It's a big portfolio. It just takes sort of time to come through. Before I answer the second question, I might just check with Rachel if you'd want to add anything to that. Yes. Thanks, Sid. In terms of that, Nick's right. It's just a matter of things taking time. When you have a look at that piece, they are slightly declining. You'll recall in my first presentation that that included the 12 basis points one-off fee. You know, we believe the product margin is stabilizing and looking for it to improve, as Nick has called out, in terms of the lower cost of funds, et cetera, what we're seeing in terms of that spread of what we're offering. It does take a while for that to season through. In terms of the swap component, happy to hand back to Pete or Nick. On the second part of the question, Sid, you know, the institutional and retail businesses, as we've said in the past, institutional business rate the same sort of ROE as the retail business. Okay. Thank you. If I could just ask a second question just around the capital targets that you have just for the Life business. When you say you target operating at about that 1.6 level, just, and within the range of 1.3-1.7, I just want to clarify. If you drift below that range, I mean, in terms of actions that you would take, should we think that you will actually take actions to actually try and move back to that 1.6 level? Or are you basically saying that you're happy to just sit there and just do, you know, I suppose, let the business run as usual? I'm just asking in the context of how we should think about actions if the capital position changes going forward. Yeah. Sid, I'll start off and Pete might like to jump in. Yeah, we guide to a range of 1.3-1.7 to allow us the financial flexibility on the balance sheet for it to roll through markets. You know, there's a number of factors that go into where we land on the PCA. You know, we talk to a range. We're sitting towards the top end of it. It gives us a lot of financial flexibility, and I think, you know, we should get a lot of confidence with how the balance sheet has and our capital position has performed through, you know, this first six months of the year. Pete, do you want to add to that? Yeah. I mean, over the last few years, we have made a change to our risk appetite. You know, that was a deliberate thing that we did. It wasn't, you know, specifically related to COVID. You know, I think if we're gonna be a, you know, a major player, and to increase our franchise value, you know, that decision was made. That does mean that, you know, we have got more financial flexibility in terms of managing the portfolio in a risk off environment. I think the other thing, you know, just to note is that, you know, that range is an outworking of our internal capital models. That, you know, is largely a function of our asset allocation, which does change through time. you know, whilst it's a measure that we report to the market, you know, what You know, what we look at is you know where we're sitting versus our internal capital models, which you know from time to time may you know drift around a little bit and yeah may not necessarily be around that 1.6 level. The question was just how we should interpret that 1.6, because we've always had a range before, but I just want to be clear that what you know, how you act with that target. Like if you're below, do you take action to get back to the target, or do you just wait for markets to recover? Or how should we think about that? That's the big question that I'm asking. Probably before Pete answers. I mean, what we've talked about today is the landing point of the PCA for June 30, 2022 was 1.6. What we've articulated in our messaging is that we manage the PCA through the range of 1.3-1.7. Yeah, I mean, the only other comment I would make is, you know, as part of the internal capital framework that we operate in, you know, we do have certain actions that we undertake. Yeah, I think by reducing our risk appetite and having a higher target, that has given us more flexibility to manage through a risk-off event than what we had previously. You know, if we end up with another GFC, then obviously we need to take action within the portfolio. If it dips a little bit below our target, then that's something that you know, we will work through and you know, we're not always rebalancing back to the target. Yeah. Okay. No, that's very clear. Thank you. Thank you for that. Just a final question on Apollo. Is there any? Could there be any expansion in this? I think there was. You're looking at a variety of initiatives. Is there anything on the insurance side where you could look at sharing of risk, or is this it with Apollo? There's a couple of things. One is the entering of the joint venture for lending suite, and we've talked about that. I've spoken about referral the opportunities between their origination and our investment teams, our origination and their investment teams, around opportunities to work on similar credits. There are range of discussions around how both parties could support each other, whether it be domestically in distribution, or in other similar sort of activities. Certainly, you know, the important thing is that we're developing a very close, you know, partnership approach with them and knowledge of each other's businesses. To the extent there are opportunities that are, I think we describe mutually beneficial, and they've got to be mutually beneficial, you know, then certainly we are open to those discussions. Thank you very much. Thank you. Your next question comes from Andrei Stadnik with Morgan Stanley. Please go ahead. Good morning. Can I ask two questions? Firstly, just again, on Apollo JV. I think it makes sort of sense that will, you know, help to generate, you know, a higher ROE, and a small earnings stream. You know, in terms of when, you know, this can actually make a meaningful contribution to your Group earnings mix, should we be thinking this is a 4-5-year journey? Yeah, Andrei, it's a fair question. You know, it's early days for us, but both parties have reasonable ambition around this or strong ambition around it. The teams have been working very diligently, you know, for an extended period right now, building both confidence in the opportunity and the ability to work together. You know, we will commit to keeping the market updated. You know, I wouldn't put it out as four to five years. I think that's too conservative. You know, we'd be looking to move clearly a lot sooner than that. It's just hard to provide more detail on that, but you know, as soon as we can, we will. Thank you. Look, my second question, just, can you talk a little bit about, you know, what the recent expansion and a small contraction in terms of credit spreads, what that means, you know, for your margin going forward? You know, for example, you know, was there a window of elevated spreads there that allow Challenger to, you know, lock in some better margins? Well, I might get Pete, if you wanna just talk about credit generally in the portfolio, if you wanna make a few remarks on experience. Yeah. Obviously we saw a widening of credit spreads going to June 30, 2022 and, you know, we've touched on through the presentation the fact that, you know, we have seen a rally back there, that they are index-based spreads. You know, we do operate, you know, mainly in the physical cash market, which, you know, does have some divergence. We're still seeing a lot of attractive fixed income opportunities in the current environment, despite the recent contraction that we've outlined there. We're comfortable in terms of, you know, the assumptions that we've put in, that the recent contraction is not gonna have an impact on them. Yeah. That certainly speaks to the importance of us targeting, you know, longer dated, or longer tenor, annuities to support the opportunities in the market, which is what we're doing. Thank you. Thank you. Your next question comes from Andy Chuk with Macquarie. Please go ahead. Morning. The first question is just around the COE margin you gain in credit spreads. You've outlined that the portfolio expanded credit spreads by 110 basis points in the second half, yet the product spread declined 2 basis points. Could you provide some color on why we're not seeing that margin expansion come through and when the credit spread will grow? Yeah, sure. Well, it's I mean, it's a diversified portfolio as one sort of initial comment, but I don't know if Rachel, you want to Well, just quickly to add on that, you know, the Accurium sale that took place in November last year, that impacted us for 3 basis points across that piece. Sort of come down slightly as a result of that. We've seen that offset through some of the life risk business, though, you know, we have to acknowledge that that's come out for the second half in its entirety, and we'll work through from there. As I said before, the product margin, you know, is benefiting from the conditions. It's just taking some time to work through slowly. Happy to hand back to Pete. I mean, the only thing I would add there, and I touched on this in one of my answers before, was the fact that, you know, we are focused on ROE. You have seen an uptick in, you know, the very short end of business that we're writing. The investment universe that we have to back that is short-term fixed income. You know, even though it's priced attractively from an ROE perspective, that is gonna have an impact on margins. Some of the impact that you're seeing in terms of that product spread is the fact that the universe of investments that we have available are actually quite low margin. Okay. Got it. Just one quick question on the new business tenor. Can I confirm what that was in the second half of 2022? Let us come back to that one just to confirm the exact number. Just bear with us for a minute. Great. Thanks. Yeah, sure. Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Lafitani Sotiriou with MST Financial. Please go ahead. Hey, good morning, guys. Just one remaining question from me, and it's a follow-up on the Bank. It's still not clear to me from following Kieren's questions what's actually gone wrong here. Did the product rollout not go according to plan? Were there any delays in getting regulatory approval for any new types of products you were looking to launch? Because there was a lot of talk surrounding the Bank around specific loans for retirement and term deposits that would replicate the annuity form and that the distribution was all getting set up. But then all of a sudden, there's guidance that there's AUD -10 million next year and you're doing a strategic review. Can you just add a little bit more color specifically on what's gone wrong from a product perspective? Can you be clear as well that does the strategic review include the possibility of actually cutting loose the Bank and moving on? Sure. You know, I appreciate the desire for, you know, the full information, but I mean, there are a number of facts that have changed that go into the decision that we've taken today. You know, just to be, you know, really sure that everyone's clear on it, the assumptions that were made, you know, at the beginning, around break even now and into the future have not held. We have made substantial investment to get us to this point, and the reality is very substantial investment would be required, less so on the product side, more so on the lending side, and also, on the product side for the customer interaction. I mean, the products themselves are quite simple, in terms of the term deposit from a liability side. In terms of building out other lending activities, the investment would be very, very material. You know, as one looks ahead at the amount of capital that would be required, the amount of organizational effort and also expense, new expense that would be required, you have to then put that against the opportunities that we have across the broader business. Unto itself, it is not attractive to us and against the other opportunities that we have, you know, where we do believe we've got some real momentum, and are also capital, you know, businesses that you know need capital over time. You know, there's a whole, you know, there's a number of things I've said there. In terms of making an announcement to appoint Gresham Partners, you know, clearly, one of the options is a divestment of the Bank. Sure. Can I just be clear here? Like, what assumptions have actually changed since you made the original guidance from, you know, when you made the acquisition? Like, what's specifically changed in your assumptions versus your actual experience to warrant. Because all those investments you're talking about shouldn't be a surprise, right? Making investment on new products and building it out, these are all things that you'd expect on a Bank. I still don't understand what specifically has railroaded your previous expectations to what we see today. Sure. Well, I mean, I've spent the first eight months in this job making sure I'm across all parts of the business beyond that which I was responsible for before. In the more recent period, as we've been going through the detailed financial analysis and looking forward, I appreciate that there should have been a number of things known, but I can only operate with the facts that I've got in front of me. The view that we have reached is based on that information. Yes, we have acquired a Bank. We've invested to integrate it to Challenger. It has cost more, which in and of itself is an expense line. The prospects for us earning a reasonable return on not just the current but future required capital is you know the part that I'm very focused on. Why do you need an external consultant to work that out for you? Can't you see it yourself? I appreciate, you know, that question, but clearly, if an option is to divest it, that is an important role to use an external for. All right, thank you. Thank you. Your next question comes from Brett Le Mesurier with Perpetual. Thank you. Thanks very much. From December last year to June this year, the cash and equivalents in the life business has fallen by AUD 500 million. The sub-investment grade, or perhaps more colloquially known as junk, has increased by over AUD 100 million. Why have you taken that approach at a time when asset quality is likely to deteriorate? Brett, thanks for the question. I hope, you know, the asset allocation, 75% is fixed income. 75% of that, of the balance sheet, is investment grade. We've got a very long track record of investing across credit markets. As noted in today's result, the credit experience has been, you know, has actually been very small. We've seen significant value emerge across the curve. The team have redeployed as you would, you know, as you would expect. To the specific question on cash and cash equivalents, I don't know if you wanna add anything on liquidity. Look, we have internal targets we manage towards. You know, we had excess liquidity back in December, that's subsequently been deployed. You know, we are very comfortable operating, you know, at an overall perspective of within our capital targets. Yeah, I mean, the cash and equivalents will fluctuate from time to time as we divest investments. I would point to the fact that, towards the end of May, we did divest a large property as well. You know, things did fluctuate within the portfolio from time to time, but everything is within target. I think we flagged before that, you know, we're not expecting to make material changes to asset allocation, and we are running an AUD 22 billion balance sheet. You know, some of the numbers that you've quoted there are actually quite small in terms of relativities. Just to come back to tenure on new business for annuity sales for the second half, it was 4.8 years as opposed to 5.1 years for first half 2022, which gave us the 4.9 years for FY 2022. I think that was Andrei who asked that question. Andy, sorry. The outlook. Yeah. The outlook for credit quality? Oh, sorry, Brett. The outlook for? Credit quality. Yeah, I think you know, everyone's aware of the environment that we're in, you know, in terms of the impact of the increasing inflation, increasing rates that are gonna impact, you know, I guess, consumers, SMEs, and corporates. We have been, you know, very selective in terms of our credit underwriting. We've got a demonstrated track record in terms of, you know, very low defaults through various risk cycles over, you know, the past 15 years. I'm very comfortable with the expertise that sits within our fixed income portfolio. You know, while I expect conditions will continue to be volatile, we are just going through, you know, a business cycle. You know, we are, you know, being selective around the sectors and the credits that we're looking at. You know, I don't expect that we're going through another GFC or COVID experience. Thank you. Thank you. Your next question is a follow-up from Andrei Stadnik with Morgan Stanley. Please go ahead. Good afternoon, Alan. Just a quick one. Is there any potential for a capital release if the Bank is sold? Andrei, it's probably a bit soon to speak to that. There is, as noted in the reports, very significant surplus capital, sitting within the Bank. Thank you. Thank you. There are no further phone questions at this time. I'll now hand back to Mark Chen. Thank you, operator. We'll just quickly go to the online questions. We've received two questions from, I believe, a retail investor, Donald Payne, which we'll cover off. "Why was net profit down so much this year? Could you provide a breakdown on the items?" is the first question. The second one is, "Why continue with a loss-making Bank for another year? Okay. Well, thanks, Donald, for the question. I'm gonna take the second one first, if that's okay. You know, a Bank is a deposit-taking institution that's regulated by APRA. We seek to continue the operations of the Bank, because that's the right thing to do through a strategic review. I do note your comment about loss-making. Certainly, that's factored into our guidance for FY 2023, but we also have a very strong obligation to deposit holders within the Bank, which I would note. In terms of the statutory net profit, which you note is down, I'll let Rachel just go through the numbers for you there. Thank you very much for the question, Donald. You're right. The normalized profit, the statutory profit after tax was down. Largely that's due to the lower investment markets that we experienced. We're required to mark-to-market our portfolio, and therefore, that drove the largest decrease for us. Excellent. There are no further questions either online or via the telephone. That closes today's briefing. Just for the market, both Irene and I are available via the telephones today. Should you have any questions, feel free to give us a call. Thanks for your interest in Challenger. Talk soon. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.