International Personal Finance plc

Hello and welcome to the International Personal Finance 2025 Q1 Trading Update Briefing hosted by Chief Executive Officer Gerard Ryan. My name is Seb and I'll be the operator for your call today. If you would like to ask a question, you can do so by pressing star 1 on your telephone keypad or press star 2 to withdraw your question. If you're listening to the call online, you can submit a question by text using the Q&A chat box in the top right hand corner of the screen. I will now hand over to Gerard to begin today's conference.

Thank you, Seb. Good morning, everyone, and thank you for joining us for our Q1 trading update call this morning. So I'm here today with Guy, our CFO, and together we'll take you through the strong performance we delivered in the first quarter. We'll also share some color on what we're seeing across our divisions and update you on our funding position and progress against our strategy. And as always, we'll have plenty of time at the end for Q&A. Now, if you've had the opportunity to read today's trading update, you'll have seen that we've made an excellent start to 2025 and delivered good growth across all three of our divisions. We saw continued strong demand for credit from our customer segment, and I'm happy to report that we delivered an increase in customer lending of 12% year on year at constant exchange rates. Now, in that, we had particularly robust performances in Poland and Romania home credit, and our digital businesses in Mexico and Australia continued their very strong momentum. In addition, I'm really pleased to report that Creditea, and that's our Mexico digital business, is now serving over 100,000 customers. And truthfully, I'd have to say, I think that's only the beginning of their journey to becoming a very substantial part of our overall group. As a result of our strong growth, closing net receivables increased by 10% to reach $885 million at the end of March. And as we look forward, we'd expect the pace of receivable growth to pick up as the year progresses. Now, in the main, this will be driven by continued strong lending momentum, as well as more favorable year-on-year comparatives, especially in Poland, where our business is back in growth mode, supported by the full payment institution license, but also, and this is really important, increased goals coming from Mexico home credit. Now, moving on to the portfolio, we're very pleased with customer repayment behavior, and credit quality continues to be excellent, driving the group annualized impairment rate down to just below 9%. Now, as you know, this is clearly below our target range of 14% to 16%, and this puts us in a strong position to accelerate lending growth as we progress through the remainder of the year. Our annualized revenue yield edged down slightly from 54.7% at the year end, to just over 54% at the end of the quarter. And as expected, this was mainly driven by the lower yield coming from Poland. Now, if we exclude Poland, our annualized revenue yield actually strengthened to 57%, which is right in the middle of our target range of 56% to 58%. Our cost-income ratio held steady at 61% for the quarter, and we do expect to see this ratio start to improve as we continue to grow revenue, and most importantly, deliver on our investments in technology to improve cost efficiency, streamline the customer journey, and standardize our internal processes. Touching now on our balance sheet and funding position, both of which I'm pleased to say are in great shape and ready to support our goal's for growth for the rest of the year plus our progressive dividend policy. We saw a slight increase in our equity to receivables ratio from 54% to 55%, reflecting capital generation and favorable FX movements. We also successfully secured $36 million of new bank funding in the first quarter, and we ended Q1 with $122 million of headroom. Now, for those of you who follow us regularly, you'll have seen that we took advantage of our balance sheet strength and repaid the remaining 66.7 million of our 2020 Eurobond at par, demonstrating our proactive approach to capital management. Our 2029 Eurobond and 2027 retail bonds continue to trade very positively, positioning us well to access the capital markets at the appropriate time, given the growth that we're expecting this year. And as we announced with our full year results, we intend to undertake a further 15 million share buyback to be completed by the end of Q3 of this year. Now, as it's just quarter one, I guess this is quite brief. So that brings me to the end of the current update. We're focused on delivering growth to enhance returns to our shareholders. Our balance sheet is very strong with excellent portfolio quality. We have a solid funding base and the execution of our next-gen strategy is progressing very well. Looking ahead, our Q1 performance continues our excellent momentum and gives us confidence to accelerate our pace of growth and change, increase in financial inclusion, and perform successfully against our own financial plans for 2025, which I think most of you are well versed in. All of the details of our trading statement are available on our website, and a recording of this call will be uploaded later this morning. With that, I'm going to hand you back to Seb, and hopefully we have some questions from you that we can answer here today. So, Seb, over to you.

Thank you. As a reminder, please press star 1 if you would like to ask a question. You can also submit a written question using the Q&A chat box in the top right-hand corner of the screen if you're listening to the call online. Our first question on the phone lines is from Stephen Payne at Peel Hunt. Please go ahead.