Lender IPF braces for hit from Polish legislation

martes 27 de octubre de 2015 05:12 GYT
 

Oct 27 (Reuters) - International Personal Finance Plc said it anticipated its profitability in Poland would be hurt by a new credit law that will come into force in the country in March 2016.

The company, which provides small personal loans in eastern Europe and Mexico, said the new rules will affect the results of its Polish business progressively during 2016 and 2017.

The Polish parliament approved changes to a consumer finance law that include a cap on non-interest costs charged for a consumer loan as part of the total cost of credit.

Poland and Lithuania together make up IPF's largest market. IPF also operates in the Czech Republic, Slovakia, Hungary, Romania, Bulgaria and Mexico.

The company said the impact of the legislation would be about 30 million pounds (about $46 million) if applied to its lending book for the 12 months ended June 2015.

IPF said it has developed strategies to partly mitigate this financial impact, including testing customer appetite for larger and longer loans, reviewing the positioning of its money transfer product, and targeting cost reductions throughout the business.

The company expects these changes to offset up to half of the negative pricing impact.

"Based on today's statement, we estimate that our 2017 PBT (profit before tax) forecast is at least £20MM too high. Therefore, we anticipate about 15 percent downgrades to consensus," RBC analysts wrote in a note.

Shares in the lender have fallen about 12.74 percent since July, when the company updated the market about the legislation.

The company's shares were up marginally at 412.3 pence at 0734 GMT, after having fallen as much as 1.26 pct in early trading. ($1 = 0.6517 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anupama Dwivedi)