Primed for growth

We joined the WEF as a GGC because being part of this group will enable us to join forces with other companies, share ideas and experiences and propel us forward to tackle the challenges of new markets and cultures. 

As a global business we need to be prepared for the regulatory systems that face us as we enter new countries to enable us to play our part in their social and economic development.

As such, being part of the WEF positions us well to learn from colleagues and contribute to best practice to ensure that when we enter a new country we make it a success and so can continue to expand our horizons and keep pushing forward our offering to consumers across the continents.

We qualify to be members of the WEF because we are continuing to expand into new markets and are witnessing significant growth year on year and so the team is leading the way in the international Home Credit industry.

International Personal Finance is focused on emerging markets, rather than developed economies. This is because they offer the prospect of high growth and excellent returns. Our product, home credit, is a very good product for entry into emerging markets because it’s simple and operates through personal relationships between the agent and the customer.

Corporate social responsibility
Although we are not governed by the Financial Services Authority as we do not trade in the UK, we have nevertheless begun to adopt their Treating Customers Fairly (TCF) initiative into the fabric of our business, embedding our Vision and Values through the TCF principles and living and breathing our core values of being responsible, straight forward and respectful.

We are currently conducting a gap analysis examining our current processes and the TCF principles and identifying areas where we need to amend our policy or improve our delivery. This process is rigorous and entails a full examination of our business model.

The next step will then involve an audit of the findings of the gap analysis and the development of a programme to evolve the business to a position where we have embedded the principles and our values into the business.
Earlier this year we were happy to report that following review as a stand alone company, International Personal Finance had been included in the FTSE4Good index.

The FTSE4Good measures the performance of companies that meet globally recognised corporate responsibility standards. Inclusion in this index is important as it is a reference point for investors looking to for socially responsible stocks. Operating as a responsible company is at the heart of what we do. We believe proactively seeking to treat our employees, customers and communities well is key to the success of our business.

Being a member of this highly regarded index sends a powerful message to investors and other stakeholders about our company’s commitment to responsible business practice. Investors are increasingly concerned with the management of social, environmental and ethical risks and our inclusion in this index demonstrates we have good policies and systems in place.

Diversifying funding sources
We are currently funded through to the spring of 2010 and are looking at diversifying funding sources over the medium term. We have recently announced increasing dividend in line with our strategy. We are highly capitalised but believe this to be a prudent position in the current financial climate.

Investment in technology
We have also invested heavily in new technology, recently selecting Experian to improve the financial performance of our customer relationships, through the use of the Probe application and behaviour scoring systems. Probe makes full use of customer data held by IPF to create an insight into behaviours and motivations and enables us to optimise the relationship. Going forwards Probe will enable the IPF credit risk management teams to have clear visibility of strategies and quickly deploy changes. Probe SM will help us to determine the right product, terms and other customer service opportunities that will satisfy our customers as well as our business objectives.

Current performance
We are pleased with our performance in the first half, with steady growth, good credit quality and tight cost control driving strong underlying growth in profits. We are well funded and the favourable Central European foreign exchange rates we have locked in for the second half will continue to provide a substantial uplift. We have made good progress in our first year as an independent group and expect to make further good progress in the second half. On July 23rd we announced to the City a first half profit before tax up by 39 percent to £22.1m and a Central European profit before tax up 37.9 percent. Mexico is continuing to improve as expected with credit quality now as good as in Central Europe and we are on track for profit in 2009 and Romania is continuing to perform well. We are very pleased that our Russian bank is about to start offering home credit in the weeks to come. The second half of the year will see us reach two million customers; we expect this to be around October time.

Vision for the future
By 2010 we aim to have over three million customers and showing a Profit of in excess of £95m target for Central Europe. Mexico will have reached profit in 2009 and it will be the first year Romania is turning a profit. We believe by 2010 that our Russian pilot will be complete, and we will have rolled out in two regions and will have entered two new countries, probably Ukraine and India we believe these results will be reflected in our share price.<

Further information: www.ipfin.co.uk