Latitude Financial Services Group (LFS) H2 2025 earnings summary

Executive summary

• Achieved strong earnings and asset growth, driven by stable macroeconomic conditions, robust customer demand, and record new customer originations, with new customer accounts up 16% year-on-year and increased market share across all businesses.

• Added over 300,000 new customers, with 59 million credit card transactions and AUD 7.4 billion in purchase volume, both up 10% versus 2024.

• Record new personal and auto loan originations, with personal loans receivables reaching a new high and maintaining #2 market position in Australia.

• Enhanced operational efficiency through disciplined, data-led cost management, enabling increased investment in growth and technology, including AI and cyber security.

• Maintained disciplined approach to balancing growth and margins, with credit performance within historical ranges despite labor market volatility and inflationary pressures.

Financial highlights

• Interest income for FY25 was AUD 1.2 billion, up 11% year-on-year; risk-adjusted income was AUD 573 million, also up 11%.

• Net interest income rose to $814m, up 18% year-on-year; total operating income reached $839m, up 15% year-on-year.

• Cash profit before tax (PBT) was AUD 211 million, up 36%; cash net profit after tax (NPAT) was AUD 105 million, up 59% year-on-year.

• Cash cost-to-income ratio improved to 43.1%, about 800 basis points better than previous year.

• Dividend per share increased to 9.0 cents, with a 2H25 franked dividend yield of 11.5%.

Outlook and guidance

• Expects to benefit from stronger customer demand and recent growth investments, anticipating volume-led growth in receivables.

• Will maintain disciplined margin management, focusing on net interest margins and optimizing revenue yields, with proactive hedging and pricing strategies.

• Credit performance anticipated to remain within targeted ranges, supported by disciplined underwriting and active portfolio management.

• Ongoing investment in cyber security and advanced technology, including AI, to enhance operating leverage and customer experience.

• Remains mindful of labor market, inflation, and central bank rate impacts on households, prepared to adjust pricing and risk strategies as needed.