Lender IPF takes the credit as amount issued increases

CREDIT LENDER International Personal Finance reported strong growth in the amount of credit it has issued and said it expects further growth over the fourth quarter.

The Leeds-based firm said the 9 per cent rise in credit issued was driven by a return to growth in Mexico, good trading in Southern Europe and a strong performance in IPF Digital.

CEO Gerard Ryan said PolandLithuania returned to modest growth after contracting in the first half although market conditions in the Czech Republic remain particularly challenging.

“Customer numbers increased year-on-year by one per cent and our collections performance is good overall with impairment as a percentage of revenue at 26.1 per cent being at the lower end of our target range of 25 to 30 per cent,” he said.

The group’s home credit business delivered a 5 per cent increase in credit issued over the three months to September 30, but challenging trading conditions, particularly in some of its European markets, hit rates of customer growth which fell 1 per cent year-on-year to 2,468,000.

The group has taken a number of actions to improve the performance of its business in Mexico. These, together with expansion implemented in the first half of 2016, resulted in a year-on-year increase in credit issued of 10 per cent and growth in customer numbers of 4 per cent to 874,000.

Mr Ryan said annualised impairment is at a similar level to June 2016 and is likely to remain at an elevated level for the remainder of the year.

The group’s Poland-Lithuania business is focused on mitigating the financial impact of the cost of credit legislation introduced in Poland in March.

It said competition remains intense with ‘first loan for free’ deals still being offered by most short-term lenders and an ongoing trend towards longer term instalment lending.

Credit issued growth in Poland-Lithuania was 1 per cent, an improvement on the contraction of 4 per cent reported in the first half and customer numbers fell 7 per cent year-on-year.

“We continued our strategy of selectively offering longer-term and larger loans to qualifying customers,” said Mr Ryan.

“Customer response to the new regulations was broadly in line with our expectations and we continue to believe we can mitigate up to half of the estimated £30m a year gross financial impact resulting from this change.”

Analyst Gary Greenwood at Shore Capital said: “International Personal Finance’s third quarter trading update shows improved growth in credit issuance, following a disappointing first half performance, with growth in customer numbers broadly unchanged.”

Customer numbers increased year-onyear by one per cent. Gerard Ryan, chief executive of International Personal Finance