International Personal Finance Q2 Earnings Call Highlights

Key Points

• Strong growth continued: First-half net receivables rose 17% to £1.17 billion, while customers increased 5.4% to 1.743 million and lending grew 18.5% at constant exchange rates. Growth was led by Provident Europe, Poland, Mexico and IPF Digital.
• Profitability remains pressured by investment: Pre-exceptional profit before tax was £47.4 million, down 5% year over year, as the company invested in technology and growth. Returns are expected to remain below the 15%–20% target through 2027, while credit quality was described as stable despite a higher impairment rate.
• Acquisition nearing completion: BasePoint’s recommended £2.50-per-share offer, including a £2.35 payment and 15 pence special dividend, has received regulatory approval. Court sanction is scheduled for July 31, with completion expected August 4 if all steps proceed as planned.

International Personal Finance LON: IPF reported pre-exceptional profit before tax of £47.4 million for the first half of 2026, alongside 17% year-over-year growth in net receivables, as demand remained strong across its consumer lending markets.

The company said the result was delivered through operational execution, continued investment in growth and technology, and stable credit quality. CFO Gary Thompson said the reported profit decline of 5%, or 13.5% at constant exchange rates, was consistent with guidance provided at the prior year-end as the group accelerates investment in its growth agenda.

The presentation was also International Personal Finance’s final financial results presentation as a listed company. The company is being acquired by BasePoint under a recommended offer that values the transaction at £2.50 per share, comprising £2.35 per share plus a 15 pence special dividend.

Gerard said all regulatory conditions for the transaction had been met following the final approval on July 3. A court sanction hearing is scheduled for July 31, with the acquisition expected to become effective on Aug. 4 if the process proceeds as planned. BasePoint and its agents would then have 14 days to make payments due under the transaction.

Customer, Lending and Receivables Growth

Customer numbers increased 5.4% to 1.743 million in the first half. Thompson said growth reflected demand for both the group’s core lending products and newer products and distribution channels.

• Provident Europe customer numbers increased 3.7%, with roughly half of the growth organic and half tied to the acquisition of Express Cash in Czechia.
• Provident Mexico grew its customer base by 4.5%.
• IPF Digital increased customer numbers by 12.7%, including 26% growth in Mexico and 15% growth in Australia.

Lending increased 18.5% at constant exchange rates. Provident Europe lending rose 25%, led by approximately 50% growth in Poland. The Polish performance was supported by a two-year credit card product, under which about 50,000 customers transitioned from the prior one-year product during the first half.

Provident Mexico delivered 9% lending growth, which Thompson described as within the group’s preferred range for maintaining operational discipline. IPF Digital lending increased 12%, with growth of 40% in Poland, 14% in Australia, 10% in Mexico and approximately 3% in the more mature Baltic markets.

Group receivables increased 17% to £1.17 billion. Provident Europe receivables grew 23% to £649 million, including 42% growth in Czechia and 33% growth in Poland. About £12 million of the Czech receivables growth was attributed to Express Cash.

Provident Mexico receivables rose 12% to £210 million, supported by branch expansion and operating execution. IPF Digital receivables increased 10%, led by Poland at 27% and Australia at 18%.

Strategy, Products and Technology

Gerard said the company’s “Next Gen” strategy remains focused on financial inclusion, organizational effectiveness, and investment in technology and data.

In Poland, the group said it is approaching a quarter of a million credit cards in issue, after building a card proposition for its target customer segment over the past several years. The company is now testing the card in Romania and expects to assess the test’s results within months.

International Personal Finance is also continuing its expansion in Mexico, where it is opening approximately two branches annually. Its next branch is set to open in Chihuahua within weeks, Gerard said.

The company has added more than 3,000 retail partners through its partnership model, which provides financing to customers at the point of purchase. Gerard said the company is proceeding cautiously in expanding the channel as it develops and refines credit scorecards.

In Czechia, the company acquired its largest home-credit competitor, Express Cash, while closing a smaller digital business with roughly 7,000 customers to focus on scaling its home-credit operation. Thompson said the Czech reorganization generated £3.3 million of exceptional costs during the period.

The group said it has completed nearly 70% of a program to renew its core systems. It is also rolling out its customer app across all four Provident businesses in Europe, having already launched it in Mexico and Poland. A multiyear SAP implementation is underway across the organization.

Gerard said the company sees increasing potential for artificial intelligence, particularly in call centers and productivity improvements over the coming years.

Margins, Credit Quality and Funding

The group’s annualized revenue yield declined to 52% from 53.3% over the prior 12 months. Thompson attributed the movement to lower rate caps in Poland and Hungary, as well as faster growth in lower-yielding markets and products. Excluding Poland, revenue yield was 55.7%, near the bottom of the group’s 56% to 58% target range.

The annualized impairment rate increased 1.7 percentage points to 10%, reflecting up-front IFRS 9 charges associated with strong growth, especially in newer channels. Thompson said customer repayment behavior remained stable and that credit quality was in “really good shape.” Excluding Poland, the impairment rate was 13.1%, below the company’s 14% to 16% target range.

Costs rose 9.3%, compared with average receivables growth of 11.4%. The annualized cost-to-income ratio improved by about 1.5 percentage points to 60.4%. Pre-exceptional return on required equity declined to 12.9% from 15.4%, which Thompson said reflected the company’s planned investment in growth. The company expects returns to remain below its 15% to 20% target through 2027 before returning to target levels in 2028.

At June 30, International Personal Finance had total debt facilities of £820 million, including £552 million of bonds and £268 million of bank funding. Net borrowings were £713 million, leaving £107 million of funding headroom.

During the first half, the group priced 950 million Swedish krona of bonds, equivalent to about £75 million, at a 5.75% margin. Thompson said this was the company’s lowest borrowing margin in several years. Its blended cost of funding declined to 12% from 12.5% a year earlier.

Regulatory Outlook

Gerard identified the Consumer Credit Directive II as the key regulatory issue facing the company. The directive is scheduled for implementation in November, though he said Hungary is the only relevant market that has completed local legal implementation.

International Personal Finance is engaging with regulators and politicians in the affected markets and expects implementation in some countries may be delayed into late 2026 or 2027. Gerard said the company has a strong record of managing regulatory change and expects to be ready when local requirements are finalized.

The company said it remains within its planned investment envelope of approximately £5 million of additional annual spending for the next three years on technology and growth initiatives.

About International Personal Finance (LON:IPF)

International Personal Finance plc is helping to build a better world through financial inclusion by providing affordable credit products and insurance services to underserved consumers across nine markets. Our 1.7 million customers, who have low to medium incomes and a limited credit history, turn to us to fulfil their plans when it really matters. As a group of people who are often financially excluded, we play a vital role in society by responsibly providing unsecured, affordable credit tailored to meet their personal needs and financial circumstances, as well as a variety of great value home, medical and life insurances to help them and their families.

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