In This Article:
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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International Personal Finance PLC (FRA:3I8) reported a strong financial performance in 2024, with a 1.5% increase in pre-exceptional profit before tax to 85.2 million, exceeding guidance.
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The company successfully executed a 150 million share buyback in 2024 and announced plans for another buyback of up to 150 million in 2025, reflecting strong shareholder returns.
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The NextGen strategy, focusing on financial inclusion, organizational efficiency, and tech and data, has been a key driver of success, with significant achievements in credit card issuance and digital expansion.
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The company achieved a milestone of delivering loans to its 15 millionth customer, highlighting its commitment to financial inclusion.
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Strong operational execution led to improved asset quality, with the impairment rate reducing from 12.2% to 9.6%, better than the target range of 14% to 16%.
Negative Points
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The company faced a 5 million adverse impact from weaker exchange rates, particularly affecting the Mexican peso and Hungarian forint.
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Second half profits were down by 17.8% compared to 2023, impacted by currency weaknesses and the re-pricing of credit cards in Poland.
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The Polish market faced challenges due to stricter rate caps and enhanced affordability regulations, impacting profits by over 20 million per annum.
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Mexico experienced IT disruptions in the fourth quarter, leading to an 8% year-on-year contraction in lending during that period.
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The company's cost-income ratio increased to 61%, up 4 percentage points from the previous year, primarily due to reduced revenue in Poland.
Q & A Highlights
Q: Are there any constraints to rolling out the number of retail partners that you deal with? A: No, there are no constraints. It's about meeting the right partners and developing the necessary technology. We aim to replicate the success seen in Romania, where we've partnered with 700 retail outlets, in other markets as well. (Gerard, CEO)
Q: At what point will you start to launch the credit card product into new geographies? A: We aim to have the infrastructure ready and launch in a second market by this time next year. (Gerard, CEO)
Q: What do you expect Mexico Home Credit yield to do in 2025? A: We expect it to remain stable, around the 86.9% to 87% range. (Gary, CFO)
Q: How do you plan to increase the number of customers at IPF? A: With Poland stabilized, we expect customer numbers to grow nicely, leveraging growth in Mexico, Europe, and digital markets like Australia. We anticipate customer growth to be about half of receivables growth, which is projected at 10%. (Gary, CFO)