Intl Personal Finance warns over Romanian credit limits, new Polish rules

International Personal Finance posted a jump in third-quarter credit issued on Thursday but cautioned that sales volumes will drop due to tighter credit rules in Romania.

The company said it continued to perform well against its strategy and delivered a "good" group performance in the third quarter, with credit issued up 6%, driven by its growth-focused businesses, IPF Digital and Mexico home credit. This was partially offset by a contraction in returns-focused European home credit markets.

IPF Digital saw growth of 39%, while Mexican home credit growth was 13% and European home credit contracted by 7%.

IPF said credit quality and collections continued to be well managed and annualised impairment as a percentage of revenue improved 0.3 percentage points to 25.2% since the half-year on the back of an improved performance in IPF Digital’s new markets.

The company noted the fact that the National Bank of Romania has unveiled limits on debt-to-income for individuals taking loans from banks to reduce indebtedness rates. The new rules will become effective on 1 January 2019.

"We expect some reduction in sales volumes as a result and will update the market at our next scheduled announcement," IPF said.

"Also, as previously noted, a parliamentary debate to implement an annual percentage rate cap at 18% for existing and new consumer lending in Romania continues, and we are engaged with key stakeholders to enable them to better understand the impacts of the proposal.

"If enacted as currently proposed, it would have a material adverse effect on our Romanian business."

In Poland, meanwhile, a draft law proposing amendments to existing tax legislation is expected to increase IPF's effective tax rate to around 42% for 2019 compared to 34% the year before.

At 0940 BST, the shares were down 5.5% to 207.60p.