Latitude Financial has announced that it expects to incur a first-half statutory loss ranging between $95 million and $105 million due to a cyber attack that severely disrupted its operations for five weeks. The attack, which occurred in March, resulted in a significant data breach and hindered the company’s ability to generate income during the affected period. The projected financial impact encompasses the loss of payment collections, the inability to accept new sign-ups, and provisions for remediation costs.
As a provider of credit cards and personal loans through various retailers, Latitude Financial disclosed in an ASX filing that its account originations and collections were either closed or severely limited for approximately five weeks. While the company confirmed the full restoration of regular operations, it acknowledged the income loss suffered during the period. Latitude Financial is allocating approximately $53 million after tax in the first half to cover expenses related to the cyber incident. This provision includes $7 million in already incurred costs and an additional $46 million after tax for other remediation efforts.
However, the provision does not account for potential regulatory fines, class actions, future system enhancements, or insurance proceeds, meaning the total financial impact of the incident remains uncertain. Consequently, the company anticipates reporting statutory losses for both the half-year and full-year, and it is unlikely to declare a dividend for the six months ending on June 30.
The cyber attack resulted in the compromise of around 14 million records containing personally identifiable information. Latitude Financial assured its ongoing support to affected customers, including both current and former clients. The incident remains under investigation by federal police, and the company is cooperating with a joint privacy investigation conducted by Australian and New Zealand authorities. Latitude Financial cautioned that it expects further extensive inquiries from regulators in the months ahead.
At the time of publication, Latitude Financial’s share price had declined by 6.56 percent.