Shares in Latitude Group (ASX: LFS) edged up to $1.14 after the mid-cap lender posted a 69% jump in first-half cash profit to $46.2 million and forecast that the positive trend would extend through the remainder of the financial year.
The lender posted statutory net profit after tax (NPAT) of A$39.7 million, up 341% on the prior corresponding period, while cash NPAT rose 69% to A$46.2 million. Cash profit before tax lifted 40% to A$93.5 million.
The board declared an unfranked interim dividend of 4.0 cents per share, compared with 3.0 cents paid for the full year FY24.
Operating highlights
- Total new volumes reached A$4.2 billion, up 12% year-on-year, supported by credit card purchase volumes of A$3.5 billion, up 13%.
- New personal and auto loan originations hit a record A$783 million, up 8%.
- Gross receivables increased 9% to A$7.0 billion, the highest level since 1H20.
- Operating income rose 19% to A$408 million, with margins improving 109 basis points to 12.0%.
- Cash cost-to-income ratio fell around 700 basis points to 45.2%.
Managing director and chief executive Bob Belan said the result reflected continued momentum across the business.
“Spend and lending volumes across our Pay and Money divisions reached A$4.2 billion, a 12% increase compared to last year. That helped lift our receivables to A$7.0 billion – the highest level in 5 years,” Belan said.
He added that consumer confidence improved as interest rates eased, boosting credit card spending. “New partnerships added over the last 12 months also contributed to this increase, further expanding our market leading retail distribution.”
Balance sheet and funding
Latitude raised or refinanced A$1.5 billion of secured financing during the period, including A$1.0 billion from two public debt transactions. Its tangible equity ratio closed at 7.0%, the top end of its 6–7% target range.
The company also completed a A$3.3 million buyback of capital notes.
Outlook
Latitude said macroeconomic tailwinds, including expected further rate cuts, should support asset growth in the second half. Management highlighted predictable credit performance, potential margin expansion through funding and pricing discipline, and continued investment in digital channels, cyber defence and artificial intelligence to drive long-term growth