Challenger Group reported a 21 per cent jump in underlying net profit and confirmed guidance for the full year as the financial services powerhouse struck a non-binding agreement with major shareholder private equity firm Apollo to build a non-bank lending business.

Chief executive Nick Hamilton, who was elevated to the chief executive position in December after previously heading up Challenger’s Fidante Partners and asset management arms, said group assets under management rose 20 per cent to $115 billion, driven by strong growth in the life and funds management businesses.