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Latitude Financial has racked up a whopping $98 million bill in the aftermath of the cyber incident it suffered back in March.
The company reported a half-year loss of $98.2 million, with $76 million of that loss being attributed to provisions put aside to deal with damages caused by the cyber attack.
Latitude said that the actual spend came to $53 million, which matches what it estimated in its initial market guidance.
In its 1H23 results announcement, Latitude managing director and chief executive Bob Belan said that while the cyber incident had a major impact on its operations and revenue, recovery had begun and shareholders can expect improvements to come.
“The cyber incident was a material setback to volumes and margins. As the recovery gains momentum, planned initiatives are implemented and cash rates likely nearing the terminal point, we expect interest income yields to improve further,” the announcement said.
“With inflationary pressures persisting and cash rates remaining high, we anticipate delinquency, charge-offs, and repayment rates to normalise to long-run averages. The overall credit environment remains conducive with unemployment expected to remain at supportive levels in the near to medium term.”
The company has reiterated its FY23 cash net profit after tax (NPAT) guidance of within the range of $15 million to $25 million.
Belan applauded the company’s quick response to the cyber incident for the recovery positive outlook on the future, saying that its action to “quickly but safely restore systems and rebuild our business momentum has been extraordinary”.
He added that by the time the new financial year came around, “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 [was] offline”.
Despite this, Belan admitted that there were still several issues that Latitude needed to resolve.
The company now plans to rise like a phoenix out of the ashes of the incident and gear its focus towards future profitability and growth with a four-tiered approach.
The four-prong strategic approach – restore, rebound, remediate, rebuild – will see the company establish stronger cyber and data security measures and more.
Restore and rebound, which saw operations return to normal and enhancements implemented, along with the reactivation of digital marketing and sales channels, have already been completed. Remediate and rebuild will see customer remediation programs engaged, as well as establishing the new cyber security agenda and the launch of the “Path to Full Potential” strategy.
“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,” said Belan.
“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.”
Latitude has also met a number of goals, including the loss of no retail partners and the signing of new partners, originations returning to pre-incident levels, stable number of active accounts with a limited impact and elevated focus on collections driving results.
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