Latitude Financial has reported $76 million of pre-tax costs and provisions relating to the mid-March cyber incident which saw around 225,000 customer records stolen.
The financial services company announced the pre-tax costs and provisions as it reported a statutory loss after tax of $98.2 million from continuing operations for the first half of 2023, which was within a previously announced range.
It also recorded an actual spend of $53 million in cyber post-tax costs as forecasted in its initial market guidance.
Managing director and CEO Bob Belan said management actions were “were beginning to generate the right outcomes, even against the backdrop of what I’d consider to be continued monetary policy tightening”.
“That said, the cyber attack on our company in mid-March clearly impacted business operations and severely affected our first-half performance,” he said.
“For a period of six weeks, new originations stopped, receivables declined, pricing actions were paused, and collections activities were significantly disrupted”.
Belan said the work done by the Latitude’s team “to quickly but safely restore systems and rebuild our business momentum has been extraordinary”.
He said by the end of June “volumes were back to pre-incident levels, plan pricing changes were implemented and incremental actions by our collections team led to a material decline in delinquency rates, which had spiked during the period that our system were offline”.
“The last six months have been the most difficult in our company’s history, and the intensity of this period is frankly quite challenging to describe,” Belan said.
“That said, our company, people and our business model remain resilient.”
Belan added there are still “several matters still to be resolved in the aftermath of the cyber incident.”
Moving forward post-attack
The company will now shift focus to boosting growth and future profitability, according to Belan.
Under a four-pronged approach to restore, rebound, remediate and rebuild, the company has begun work on an enhanced cyber and data security agenda, and launched a new “Path to Full Potential” strategy and initiatives.
“To give you some context in terms of what we have planned ahead, we’ll continue to invest in system security enhancements to protect our company’s assets into the future,” Belan said.
“We will focus on further optimising our operating model and our cost base which includes a workforce re-engineering program planned for the second half of this year.”
The business will also seek out new retail partners, and aim to invest more in core capabilities, customer experience and growth opportunities.
Over the first half, Latitude Financial reported the sale of all of its hallmark insurance business, which returned $99 million in capital back to the balance sheet, Belan said.
He said support from existing retail partnerships had been “extraordinary”, with some new partnerships also added.
Belan said that benefits were also being generated from the company’s 2021 acquisition of Symple, which in part was purchased for its consumer lending technology platform.
“During the first half of 2023, progress made on the integration of the Symple business and technology has been exceptional,” Belan said.
“All new personal loans and auto loans are now being originated on the new Symple platform.
“We’re in the process of decommissioning high-cost legacy systems work that we expect to be completed by the end of this year.”
Belan said the company has taken steps to restructure and expand the executive leadership team, adding new members post-cyber incident.
“We have in place a highly talented and globally experienced group that is committed to our success and leading our core business lines and functions into the future,” he said.
The Latitude Financial board opted to not declare a dividend for the six months to June 30.
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