International Personal Finance (LON:IPF) reported a higher full-year profit for 2025 and proposed a larger dividend, as management pointed to strong demand across its customer base, robust credit quality, and growing momentum in newer products and channels. Executives also flagged heightened regulatory activity across the EU linked to the Consumer Credit Directive (CCD2) and discussed a recent deterioration in the security situation in parts of Mexico.
Profit rises, dividend increased
Chief Executive Gerard said the group delivered profit before tax of £88.6 million on a pre-exceptional basis, up 4% year-on-year. The result came alongside nearly 12% lending growth year-on-year and nearly 14% growth in net receivables, which are “fast approaching” £1.1 billion.
Thompson also disclosed £3.3 million of exceptional one-off costs in 2025 related to the potential acquisition by BasePoint.
Customer growth returns; lending and receivables expand
Management highlighted a return to customer growth, with Thompson saying 2025 was the first year in more than a decade to deliver “meaningful” growth in customer numbers. Total customers increased 4.7% to 1.729 million, with all three divisions growing.
- Poland added 10,000 new customers in the second half, returning to growth.
- Romania added 10,000 customers in the second half, supported by an expanded product set.
- Mexico added 46,000 customers in the second half, including 24,000 from the digital business and 22,000 from Provident Mexico as it recovered from an IT upgrade disruption.
Group lending grew 12% at constant exchange rates. Provident Europe delivered 13% lending growth, including 20% in Poland and 18% in Romania, while Hungary and Czech grew just over 4% combined. Provident Mexico lending rose 7% for the year, accelerating to 13% in the second half as the business recovered and expanded with two new branches.
Receivables surpassed £1.0 billion, reaching a level last seen in 2017, with 14% constant-currency growth (about £130 million). Thompson said this was below the group’s target of £150 million growth, with the shortfall spread across Provident Poland, Provident Mexico, and Mexico Digital. Within Provident Europe, receivables grew 16% to £575 million, led by Romania at 22%. In Poland, receivables stood at £195 million, and Thompson said higher-yielding credit cards now represent about 50% of that book.
Strategy execution: new products, channels, and technology investment
Gerard framed performance around a “three pillar” Next Gen strategy, centered on financial inclusion, organizational change, and technology/data. He said the group’s credit card launched in Poland two years ago has surpassed 200,000 users and is now also delivered digitally, depending on customer preference and credit standing. The company is also testing the card in Romania.
In partnerships/point-of-sale finance, Gerard said IPF’s services are offered through 2,700 retailers in Romania and Mexico, though he emphasized the need to calibrate scorecards because retailer-based origination can skew the customer mix and affect credit quality.
Gerard also described a newer short-term loan product designed to avoid penalizing customers who run into repayment difficulty by offering the ability to switch to a longer loan with lower repayments and interest. He said the product is proving popular, with credit quality a key focus as it scales.
On investment, Thompson said the group plans to invest an additional £5 million per year through the profit and loss account for the next two to three years to support growth initiatives, marketing and brand building, colleague capability, and upfront IFRS 9 impairment charges as scorecards are refined. He said the company expects market expectations to adjust to reflect the additional spend.
Capital expenditure was £35 million in 2025, up from £24 million in 2024. Thompson said CapEx will rise by a further £15 million in each of 2026 and 2027, before reducing to a normalized run rate of £25 million to £30 million from 2028. Gerard said the group is investing to simplify and secure an estate of roughly 450–460 systems and highlighted projects including omnichannel customer interaction (the “Xenia” project) and the rollout of a customer app across Provident businesses.
Credit quality, funding, and regulatory and security risks
Thompson said repayment behavior remained “really good,” helping the group’s impairment rate improve by 0.6 percentage points to 9%, supported by a strong debt sale market and an £8 million reduction in the cost of living provision. He said the cost of living provision stands at £1 million and is not expected to be a feature going forward.
The group ended 2025 with £750 million of total debt facilities and funding headroom of £129 million. Thompson also noted a reduction in the blended cost of funding from 13.3% to 12.2%, and said IPF issued 1 billion Swedish krona of unsecured senior floating rate notes due 2028 (about £80 million) at 3-month STIBOR + 5.75%. The equity-to-receivables ratio was 51%, down from 54%, reflecting growth in receivables partly offset by a £47 million foreign exchange gain to reserves.
On regulation, Gerard warned of a “huge uptick” in CCD2-related activity as EU countries rush to transpose the directive into local law. He outlined a range of measures under discussion across markets, including caps on lending-related fees, enhanced affordability assessments, changes to rebates, restrictions on advertising, tighter rules around value-added services, and “free credit sanctions” that could allow customers to repudiate agreements if errors are found. In Q&A, management said the financial effects of CCD2 were not reflected in the outlook because outcomes remain uncertain.
Gerard also addressed the evolving security situation in Mexico, saying the company closed branches and told colleagues and customer representatives not to travel on highways in three states following recent instability. He said the decision affects about 10% of the customer base in Mexico and that the company hopes any impact on February results will be “de minimis,” while emphasizing that employee and representative safety is the priority.
Outlook and investor Q&A highlights
Management said there is good momentum entering 2026, supported by demand, a strong balance sheet, and solid credit quality, while acknowledging headwinds from regulatory uncertainty and the earnings drag from increased investment and amortization. In response to an investor question on whether receivables growth would translate into higher 2026 profit, Thompson said he could not provide specific guidance but pointed to additional investment of £5 million per year and noted that prior consensus figures referenced on the call were £97 million PBT for 2026 and about £115 million for 2027, before considering the updated investment plans.
Asked about longer-term customer ambitions, management reiterated a medium- to long-term target of 2.5 million customers, up from the current 1.7 million, and said the planned investments are intended to support that growth over an extended period.
About International Personal Finance (LON:IPF)
International Personal Finance plc is helping to build a better world through financial inclusion by providing affordable credit products and insurance services to underserved consumers across nine markets. Our 1.7 million customers, who have low to medium incomes and a limited credit history, turn to us to fulfil their plans when it really matters. As a group of people who are often financially excluded, we play a vital role in society by responsibly providing unsecured, affordable credit tailored to meet their personal needs and financial circumstances, as well as a variety of great value home, medical and life insurances to help them and their families.
