UPDATE 1-Lender IPF's Spanish foray stokes concerns, shares fall

miércoles 30 de julio de 2014 06:31 GYT
 

(Adds comments from CEO & analysts, details, share movement)

By Abhiram Nandakumar

July 30 (Reuters) - Consumer credit provider International Personal Finance Plc said it was expanding into Spain, where it may take longer to break even than its eastern European strongholds.

Shares of the FTSE-250 company, which provides small personal loans in eastern Europe and Mexico, fell as much as 3.9 percent on Wednesday to 563 pence on the London Stock Exchange.

"Due to the nature of the market and the potential scale of opportunity, Spain's development will require both a higher level of investment and a longer period to break even compared to our recent new markets of Lithuania and Bulgaria," the company said in a statement.

The Spanish expansion, while positive, is likely to cause consensus downgrades until the country starts contributing to IPF's profit, RBC Capital Markets analysts said.

Chief Executive Gerard Ryan said he expected the first loan in Spain to be issued early in 2015 and to build a portfolio of about 400,000 customers or more at maturity, which could take five to eight years.

Numis Securities analysts said in a note that they expect Spain could contribute over 24 million pounds at maturity.

"We believe there isn't a strong competitor, if any, for us there (Spain)," Ryan told Reuters on phone, adding that there was strong consumer interest in borrowing small sums.   Continuación...