Catholic Super sells bank to Challenger
Catholic Super has offloaded its bank MyLife MyFinance to Challenger for $35 million as part of the annuity giant’s strategy to fast track its access to the $1 trillion term deposits market without the headache of getting a bank licence.
“Challenger has spent considerable time over the past two years investigating the requirements of an ADI licence to complement our existing businesses,” Challenger CEO Richard Howes said in a statement.
“This acquisition will enable us to accelerate this strategic initiative and access Australia’s term deposit market,” he said.
It is understood that key staff of the business will be retained by Challenger.
Indeed, in the statement Howes sees a number of opportunities for the business.
“Adding a digital domestic banking capability to sit alongside our existing Life and Funds Management operations will further broaden the ways in which we provide financial security for retirement and will further diversify our distribution channels,” Howes said.
“Term deposits represent a significant asset class for Australian retirees and entering the market provides an opportunity to play a greater role supporting the retirement incomes of our customers, while also attracting a new cohort of customers,” he said.
“Authorised deposit-taking institutions have had great success in attracting government guaranteed retail deposits. We see a significant opportunity to leverage our leading retirement income position and capability to manufacture guaranteed returns for our customers.”
Howes also acknowledged that MyLife MyFinance has invested heavily in its technology, “putting Challenger in a strong position to scale the business and streamline services for customers”.
Not surprisingly the sale of the bank by Catholic Super was due to its decision to focus on its core business of superannuation and comes at time as it announced its joint venture with Equip to grow the fund to $50 billion by 2025.
The sale is expected to be finalised in March 2021 and is subject to approval by both APRA and the government.