Consumer lender Latitude posted significantly higher profits as its bad debt charges declined significantly and it gained market share in personal and auto loans.
Latitude’s half-year results on Monday showed after-tax net cash income (NPAT) rose 81% to $ 121 million, which was slightly above the upper limit of its forecast.
Latitude, which launched this year, will pay an unreleased dividend of CA 7.85 on October 14.
Latitude’s lending volumes were up 5% from the first half of last year, while its net write-offs fell 41.7% to $ 58.3 million, boosting bottom line.
Despite the weakness of the pandemic-affected travel loan category, the result showed an expansion in market share, with Latitude becoming the second-largest personal lender in the country.
“This is a solid result that offers a cash NPAT just above the upper limit of the forecast of $ 120 million for 1H21. The 37% volume growth in our personal and auto loan business in Australia and New Zealand has been particularly satisfactory, ”said Managing Director Ahmed Fahour.
Amid a land grab in the buy now, pay later (BNPL) sector, Mr. Fahour said Latitude was ramping up its BNPL product for purchases of up to $ 10,000.
Latitude said that although lockdowns temporarily slowed the economy, the company expected spending to rebound quickly once restrictions were relaxed.
The company said it would keep the dividend at the same level in the second half of the year, but the distribution would be fully franked.
Shares of the $ 2.3 billion company closed at $ 2.33 on Friday and are down 13.7% since its float in April.