Challenger Financial Group might cut more jobs as it looks for further cost savings and efficiencies.
"Headcount continues to be our focus," Challenger chief financial officer Brian Benari said at the group's half-year results presentation yesterday. "We will continue to drive synergies."
In the 2008 calendar year Challenger cut 174 positions or 18 per cent of its workforce.
The group incurred $8 million in redundancy costs in the six-month period ending 31 December 2008, but expects to save $12 million a year as a result of the measure.
Challenger posted a net loss of $107.9 million over the first half of the financial year 2009, compared to a net profit of $95.7 million in the same period last year.
The loss was mainly the result of market volatility, which led to a lower valuation of the group's assets.
But the group said it does not need to raise capital and holds $400 million in surplus capital over its regulatory minimum.
Assets under management had fallen 21 per cent to $37.7 billion by the end of 2008 from $47.3 billion at the end of 2007.
Normalised earnings before interest and taxation (EBIT) in the fund management business fell 65 per cent to $13 million.
But the group said the lower contribution from its fund management business was offset by strong results from its mortgage business, which saw an increase in EBIT of 21 per cent to $63 million over the six-month period.
"Our mortgage business continues to be a strong cash generator, with our extensive distribution platform positioning Challenger as the largest non-bank participant in the Australian mortgage industry," Challenger chief executive Dominic Stevens said.
