Latitude Group’s venture into the buy now pay later market has ended in failure, with the consumer finance company announcing on Friday that it has closed its BNPL offering in Australia and New Zealand. Latitude said BNPL was an “immaterial” part of its business, representing around 0.3 per cent of receivables. “Given this, and as a consequence of the uncertainty surrounding the future regulatory environment, Latitude believes now is the right time to exit the sector,” it said. The company’s 2022 financial report also reveals that the “interest free” part of the business has been slow to develop and would need more investment to improve the consumer and merchant experience. It’s been a bad start to the year for the BNPL sector. Zip reported another big loss and, according to its auditor, faces “material uncertainty”. Openpay is in the hands of receivers and Payright also faces an uncertain future with a change of control. Latitude’s expensive foray into BNPL was one of the factors contributing to a poor financial performance last year. Its net interest income fell 12.9 per cent to A$675.8 million in the 12 months to December. Over the past two years net interest income has fallen 23.2 per cent. Net profit fell 77 per cent from $160.3 million in 2021 to $36.3 million last year, and cash profit from continuing operations was down 23 per cent to $153.5 million. The company said the “unprecedented size and speed” of the Reserve Bank’s cash rate increases drove funding costs “immediately higher”. It re-priced its products but the full impact on its asset yield will only come this year. Finance costs on borrowings increased 29.7 per cent to $216.3 million. Latitude has drawn-down borrowings of $5.9 billion and available funds of $1.3 billion in its warehouse facilities. Elevated credit card and loan repayment rates have depressed Latitude’s receivables since COVID started. Growth returned in the second half of last year – the first period since the June half in 2020 when it has had growth in receivables.