* Announces share buyback of 50 million pounds
* First-quarter underlying pretax profit 12.7 mln stg
* Revenue rises 9.7 pct to 194.9 mln stg
* Shares rise to their highest levels this year (Adds CEO and analyst comments, updates shares)
By Noor Zainab Hussain
April 30 (Reuters) - International Personal Finance Plc , which makes small personal loans to customers in eastern Europe and Mexico, posted a near 40 percent jump in quarterly profit, driven by increased lending in Poland and Lithuania.
The company, which services customers with questionable or no bank records through its 30,000 agents, also said it would buy back shares worth about 50 million pounds.
The company's shares rose as much as 6 percent to their highest this year, ranking the stock among the top percentage gainers on the FTSE-250 Midcap Index.
The buyback was the highlight of the company's statement, reflecting a lowering of financing costs, Peel Hunt analyst Stuart Duncan said in a note.
"We remain attracted to the small-sum short-duration lending model that gives significant control over impairment," Duncan said.
His rating on the stock was a "hold" but he added that for those prepared to look through short-term uncertainty the stock was a "buy".
IPF lends to about 2.6 million borrowers across eastern Europe and Mexico. Most loans issued by the Leeds-based company are between 200 and 500 pounds for periods of six to 12 months.
The amount of credit issued in Poland and Lithuania, which combined make up IPF's biggest market, rose 10 percent in the quarter. Reported profit from this market rose nearly 53 percent to 7.8 million pounds.
IPF forecast strong demand for longer-term loan products in Poland, the Czech Republic and Slovakia. Reported profit from the Czech Republic and Slovakia, the company's second-biggest market, rose 4 percent to 5 million pounds in the first quarter.
The company, which delivers cash and collects repayments on some loans at borrowers' doorsteps, said it was relaxing its credit rule in most of its Mexico branches to attract more clients.
"This way we get to lend slightly larger sums of money to customers in Mexico, because we have seen in the past that the average issued value of each loan in Mexico was probably just too small for us to make reasonable returns," Chief Executive Gerard Ryan told Reuters.
The company said this year that it aimed to triple the number of customers in Mexico to about 3 million in the medium term and increase its profit per customer to 33 pounds by 2015.
Profit per customer in Mexico rose about 5 percent in the first quarter to 21 pounds, Ryan said.
IPF reported an underlying pretax profit of 12.7 million pounds ($21 million) and a 9.7 percent jump in revenue in the first quarter. Total credit issued rose 11.0 percent to 258.3 million pounds.
IPF's shares erased much of their early gains to trade mostly flat at 0.17 percent at 0905 GMT. The stock has gained about 12 percent so far this year. ($1 = 0.5936 British Pounds) (Reporting by Noor Zainab Hussain in Bangalore; Editing by Robin Paxton and Rodney Joyce)