LONDON (ShareCast) - (ShareCast News) - Growth in customer numbers and lending slowed at International Personal Finance in the first quarter due to a slower performance in the key growth market of Mexico.
Although there were strong performances from the home credit operations in Southern Europe and the IPF Digital business, a slowdown in Mexico saw group customer numbers increase year-on-year by 3%, down from the 6.6% rate enjoyed in 2015.

Within this home credit customer numbers grew 1%, while IPF Digital surged 53%.

First-quarter growth in proforma credit issued slowed to 6% from 13% last year, with home credit growth of 3% and Digital proforma growth of 31%.

Credit issued in Southern Europe increased by 23%, fell 2% in Poland-Lithuania, fell 13% in Czech Republic, and grew only 4% in Mexico, where much had been expected after growing credit issued 76% in the last three years.

"The factors driving this are largely operational and we have a clear plan to address these and return to higher rates of growth as we move through the year," the company said.

IPF Digital was driven by the new markets of Poland, Australia and Spain where year-on-year credit growth was 148%.

The collections performance was said to be good, with impairment as a percentage of revenue at 26.1%, towards the lower end of the target range of 25% to 30%, from 25.7% last year.

Collections in Mexico, however, were weaker than in the European businesses and as a result there was an increase in impairment which management expect to correct as the year progresses.

The FTSE 250 home credit provider said it was continuing with the 'evolved' strategy announced in February, cutting costs in the established home credit businesses, including the roll out of our new sales and service structure in Poland and the completion of the UK head office restructuring, while focusing on driving top-line growth from the home credit businesses in IPF Digital, Mexico and Romania-Bulgaria.

For the full year, directors said they "expect to generate further strong growth in IPF Digital, see a continuation of the positive momentum in Southern Europe and a return to higher levels of growth in Mexico".

The situation in Poland was also being monitored, following the implementation of the new total cost of credit cap legislation, with IPF rolling out a new, compliant product offering.

Following the group's recent well-publicised problems in Eastern Europe, analyst Gary Greenwood at Shore Capital said that a wobble in one of its growth markets "comes as a somewhat unwanted further development that is likely to impact negatively on the shares this morning".

He said though it was a disappointing update he understood that "management remains comfortable with consensus statutory PBT of £92.8m, or £98.8m adjusting for Slovakia losses".

Shares in IPF were down 7.6% to 241.2p by 1030 BST on Wednesday, still above February's three-and-a-half-year low below 220p.

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