sydney challenger ltd plans to complete a strategic review of its bank by the first half of fiscal 2023 with divestment being one of the options on the table for the loss making unit the company australias largest provider of annuities reported a statutory profit of 2537 million australian dollars us1781 million for the 12 months ended june 30 compared with a592 million a year earlier challengers banking unit incurred a loss before interest and tax of a11 million which the company said reflected significant regulatory and integration expenses following its acquisition of the bank in late 2020 from mylifemymoney superannuation fund also known as catholic super nick hamilton challengers chief executive said the amount of capital needed to fund the units growth could be better spent on the stronger core of the business which is its retirement products and funds management segment the strategy originally saw the bank fitting into supporting preretirees…the observation that weve made is that with the terrific opportunities with the life companyin retirement and also institutional clientsat this stage we dont see it is a significant contributor to the strategy mr hamilton told the wall street journal advisory firm gresham partners has been appointed to assist with the review which mr hamilton said would be completed by the first half of fy 2023 he said on an analyst call tuesday that while all options were on the table clearly one of the options is a divestment of the bank challenger had previously expected the bank to break even in its first year that being fy 2022 but earnings arent expected to improve with the company flagging a further a10 million loss in fy 2023 the assumptions that were made about breakeven now and into the future have not held we have made substantial investment to get us to this point and the reality is that a substantial investment would be required mr hamilton told analysts to succeed in this space you do need a technological advantage and the additional cost to build that vis a vis the other opportunity for the capital have certainly been a consideration ubs analysts said in a research note that the banks losses were the key negative surprise of challengers results mr hamilton also said that challengers partnership with apollo global management inc may result in various financing solutions across a range of sectors the joint venture will aim to address a wide array of client financing needs providing structured and assetbacked lending solutions such as accounts receivable finance invoice and trade finance equipment finance auto finance and agricultural funding among other bespoke credit solutions said challenger in a regulatory filing the joint venture will focus on lending opportunities not well served by traditional syndicated markets and will be equally owned by challenger and apollo