Australia’s Latitude Financial defers US$1.5bil IPO amid inquiry rap for sector

SYDNEY: Australia’s Latitude Financial said it has deferred a planned IPO due to market conditions and a change in leadership at the mortgage lender, while a national inquiry into financial sector misconduct clouds the outlook for the industry.

Latitude, partly owned by Deutsche Bank and US private equity firm KKR & Co, is one of the largest non-bank lenders in Australia, offering low-document home loans and credit cards. Sources have said it aimed to raise about A$2bil (US$1.45bil) in the initial public offering (IPO) this year.

Australia’s financial sector has been rocked by months of revelations of wrongdoing stemming from a government-ordered public inquiry, called the Royal Commission. That has driven down share prices, trashed the reputations of some of the country’s biggest companies and is expected to bring in painful reforms.

Melbourne-based Latitude said in a statement on Monday that Ahmed Fahour was appointed chief executive to replace Sean Morrisey who had decided to return home to the United Kingdom for health and personal reasons.

Chairman Mike Tilley said in the statement that given “external market considerations” and the change in leadership, the IPO would be deferred. The board will continue to explore strategic options, which may include a future listing on the Australian Securities Exchange, Tilley said. Morrisey has headed the company ever since Deutsche, KKR and others in a consortium acquired General Electric’s consumer business in Australia in 2015 to create Latitude.