Personal lender appoints new CEO, announces growth

Mr Belan is currently Latitude’s executive general manager of the money division, a position he has held since the group’s acquisition of Symple Loans (a business he co-founded) in November 2021.

The new MD and CEO will take up his role from Ahmed Fahour, who announced earlier this year that he was to leave the company, on 1 April 2023. 

Mr Fahour will leave the company on 31 March 2023 to help ensure “a smooth leadership transition”. 

Mr Belan’s appointment reportedly came following an “extensive global search”.

He has more than 20 years’ experience in consumer finance businesses across Australia, Asia, and the US at Symple, ANZ, JPMorgan Chase, and American Express.  

Commenting on the appointment, Latitude chairman Mike Tilley (who will also be leaving the company later this year) said: “It is very pleasing that after embarking on a global search over many months, the best candidate to lead Latitude through the next phase of its life as a listed entity was already part of our team.

“Bob has made an outstanding contribution to Latitude since joining in 2021, not only in the integration of Symple and Latitude’s personal and auto lending activities but also in his role as a leader across all facets of our business. Bob’s vision for the future of Latitude is aligned with that of the board.” 

Acknowledging Mr Fahour’s legacy, Mr Tilley added: “Ahmed has led Latitude through some of its most important and most difficult times, including its listing in 2021 at the height of COVID lockdown restrictions and through the significant customer and operational challenges of COVID over almost 2.5 years. 

“Being based in Melbourne which experienced extensive and debilitating lockdowns resulted in very significant operational challenges. Ahmed’s extensive experience as a CEO was incredibly valuable in dealing with these challenges. 

“On behalf of the Latitude Board and all the employees at Latitude I would like to thank Ahmed and acknowledge a great contribution from a genuine leader.”  

Speaking of his new role as incoming leader of Latitude, Mr Belan stated: “I am delighted to be in a position to lead this great business and to be working with a talented executive team on delivering Latitude’s purpose of enabling a better lifestyle for its customers. 

“We operate in a dynamic, often ambiguous and highly competitive environment that is evolving rapidly. 

“I believe we are well positioned to capitalise on the opportunities that this creates — pivoting our strategies to achieve market-leading receivables growth, leveraging our inherent strengths to unlock our full commercial potential and ensuring laser focus on generating positive outcomes for our customers, employees, and shareholders alike.” 

Latitude grows its book

The announcement came as the lender released its financial results for the full year to 31 December 2022 (FY22).

According to the lender and payments provider, it delivered 8 per cent growth in volumes in its last financial year, taking volumes up to $7.95 billion.

It noted there was “growing momentum” too, which was reflected in 2H22 volumes of $4.24 billion (up 15 per cent on 2H21).

Gross loan receivables were up 3 per cent to $6.5 billion and were up 3 per cent half-on-half in 2H22. According to Latitude, this marked the first half-on-half growth in five halves, as “elevated repayment rates slowly start to normalise”. For example, 2H22 repayment rates were at 101 per cent, down 333 bps on 2H21).

The volumes for its credit card arm of the business were up 7 per cent to $6.25 billion as credit card spending rebounded. 

Sales finance volumes were flat for the year at $4 billion but grew 9 per cent in the second half, sequentially, as “pandemic-related trends of increased cash purchases and lower store traffic, along with low interest rates, began to [reverse]”.

The group flagged that the integration of the “consumer-friendly Symple Loans technology platform” proceeded to plan, with the front book fully integrated and allowing the introduction of digital variable rate products. 

Integration of the Australia/New Zealand personal and auto loan back book is expected to be completed by the second quarter of 2023.

Latitude said it expects the momentum in volumes to continue in 2023 while unemployment remains relatively low, but added that receivables growth may “continue to lag with elevated repayment rates taking longer than expected to normalise”. 

Latitude “reviewing” BNPL offering

The non-bank added that its instalments business may continue to benefit as the higher interest rate environment might “add to the attractiveness” of its ‘interest free’ proposition as households’ cash reserves diminish.

However, it flagged that “as consequence of the uncertainty surrounding the future regulatory environment” of the buy now, pay later (BNPL) sector and the immaterial impact it has on its receivables (circa 0.3 per cent), it would be “reviewing this service offering, with a decision due shortly”.

Outgoing MD and CEO Mr Fahour commented: “While the Cash NPAT result of $153.5 million is reflective of a challenging market in 2022, with the continued impact of the pandemic, high inflation and added funding costs, we are encouraged by the positive momentum we have seen in the second half of the year. 

“Our Money business continues to perform strongly, particularly in Australia, as we introduce new variable rate products and a better customer experience through the successful integration of the Symple Loans technology.  

“Credit card spending is also returning, particularly on the 28° Global Platinum Mastercard with the recovery in  international travel, and interest free instalments volumes growing significantly in the second half of the year with the reduction in cash purchases.

“The volume momentum across Pay and Money has started to flow through to receivables as elevated repayment rates start to moderate. 

“Delinquencies remain low and we are yet to see the full benefits of the action we took to reprice our products when interest rates began to increase.

“With our strong underlying balance sheet, cost discipline and work we have done to modernise our operations, we are in a strong competitive position as we look for growth opportunities that we believe will emerge in this market. 

“We also continue to simplify and focus our business around our strengths in interest-free instalments and personal  lending,” flagging the recent sale of Hallmark insurance. 

[Related: ASIC sues Latitude over ‘misleading’ advertising]