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Latitude reveals impact of cyber attack in 1H23 results

The non-bank lender has released its 1H23 results for the period ended 30 June 2023, which revealed the impact of its cyber breach earlier this year.

Latitude Financial Group Holdings Limited (Latitude) has revealed in its half-year results for the period ended 30 June 2023 a statutory loss (after-tax) of $98.2 million from continuing operations, which included $76 million of pre-tax costs and provisions related to the cyber attack that occurred in March this year.

According to the group, new origination volumes in 1H23 were $3.6 billion, down 3 per cent year on year due to the disruption caused to the cyber incident and down 15 per cent on 2H22 (including seasonality). Prior to the breach, Latitude reported new origination volumes up 12.5 per cent year on year in January/February.

The group’s gross loan receivables were $6.2 billion, which remained flat year on year and down 2 per cent on 2H22, again reflecting the impact of the cyber breach.

However, repayment rates remained above pre-pandemic levels, despite a 400-bp reduction to 94 per cent.

During Latitude’s annual general meeting (AGM) on 26 April 2023, the group announced “record loan originations” in its money division at $1.7 billion, however, it noted a significant drop in overall lending.

Latitude managing director and chief executive Bob Belan apologised for the cyber attack during its AGM, which resulted in almost 8 million driver’s licence numbers and hundreds of thousands of passport numbers being stolen.

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Latitude was ordered by the offenders to pay a ransom for the information, however, the group declined consistent with government advice.

On the 1H23 results, Mr Belan commented: “While the first six months of 2023 have been among the most challenging in Latitude’s history.

“That said, I am proud of the extraordinary resilience and response of my colleagues and pleased with the strength of the rebound we are now beginning to see.

“Latitude’s half-year result reflect[s] what has been a persistently difficult macro environment for financial services businesses and of course, the operational disruptions caused by the March cyber attack on our company.”

He added that the group has continued to “work diligently” to consistently review and improve the security of its systems, along with accelerating the delivery of Latitude’s refreshed strategy, which is focused on enhancing customer experience and elevating financial performance.

“As we continue to simplify our operations, we expect to generate further operating efficiencies, creating capacity to incrementally invest in our capabilities and high-yielding growth opportunities,” Mr Belan concluded.

[RELATED: Gaps in cyber security exposed by APRA]

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