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The listed lender has forecast a half-year profit in the range of $115 million to $120 million, a rise of at least 70 per cent on the prior corresponding period.
Latitude Financial has signalled that it is anticipating a cash net profit after tax (NPAT) rise of 70 to 80 per cent for the first half of 2021, compared with a year prior. The board is intending to declare an unfranked dividend of 7.85 cents per share, a payout totalling around $78.5 million to shareholders.
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Latitude has also drawn up an expected volume of around $3.7 billion, an increase of 7 per cent, with personal loans volume tipped to inflate by 25 per cent in Australia and by 50 per cent in New Zealand on the prior corresponding period (pcp).
The growth in volume has taken place despite border closures dragging the international and travel category by around half (46 per cent) on the pcp and 74 per cent from 2019.
Latitude managing director and chief executive Ahmed Fahour commented that volumes have otherwise recovered strongly in all other areas.
“Instalments volumes have been pleasing, particularly in the home segment, and we see this performance continuing,” Mr Fahour said.
“Personal loans and auto loans volumes are growing strongly, and Latitude is now the number two originator of new personal loans in Australia and one of the leaders in New Zealand. We remain optimistic that travel volumes will recover quickly when borders reopen, although the reopening has been further delayed.”
Latitude has rolled out the pilot for LatitudePay+, its buy now, pay later product into the market, with a full launch to come in the second half of the year.
The lender will apply for licences to build out the instalments business in Singapore and Malaysia in the coming months.
Gross loan receivables are also likely to remain stable relative to the prior half’s levels of $6.5 billion, due to early customer repayments in response to the government’s cash stimulus measures and lower spending.
The lender has credited its simplification program for reducing costs, which are anticipated to decline by a tenth on the pcp.
Net charge offs are also tipped to fall by 40 per cent on the pcp, with Latitude reporting an improvement in book credit quality.
But the current Victorian snap lockdown is not expected to impact the group’s results.
“The business is sufficiently buffered to handle disruptions like the short lockdowns we’ve experienced now across several states,” Mr Fahour said.
Latitude listed on the ASX in April, issuing 1 billion shares valued at $2.60 each.
As at Friday (28 May), the company’s share price was $2.54.
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