After International Personal Finance (IPF) was fined by Polish regulators just before Christmas, and given the wider threat of a possible rate cap being applied in the door-step lender's core Polish market, investors could be forgiven for wanting to steer clear of its shares. After all, IPF earns roughly half its profits in Poland. News of the fine, however, sent the shares tumbling by a quarter and, despite some recovery since, they're still rated at a significant discount to those of other UK-listed door-step lenders. Yet the fine itself, as broker Shore Capital points out, "is not material to the investment case", while Polish rate cap fears could yet prove overdone. That suggests the share could bounce, and chief executive Gerard Ryan has spent £450,000 on shares since the de-rating and is already in the money.
- De-rating looks overdone
- Growing solidly
- Returning capital
- Director purchase of £450,000
- Facing regulatory uncertainty
- Hit with a fine in Poland
Admittedly, the £2.4m fine levied by Poland's Office of Consumer Protection and Competition is hardly good news. Yet it's not clear that the fine will stand. Specifically, the regulator believes that the way IPF calculates its APR rate amounts to a "collective infringement of consumer interests" because the fees associated with the company's optional services like home collection aren't included. However, and as broker Numis Securities points out, "the EU convention to calculate APR is to only include the compulsory fees". Indeed, IPF insists that its has received legal advice conforming that it has been correctly calculating APR rates and is, therefore, determined to appeal.
