Increased competition and tough new regulation in some of its European markets hampered sub-prime lender International Personal Finance (IPF) last year. Following the Slovakian government's decision to introduce a new rate cap on consumer loans, management decided to shut down operations there. The group booked £18.6m in exceptional wind-down costs and expects the business to incur between £5m and £7m in losses this year. Chief executive Gerard Ryan says the cap has been set too low for the group to continue making money. "Having an agent-led model is too costly," he says.
A tightening interest rate cap and intensifying competition from payday and digital lenders resulted in a 4 per cent reduction in revenue for IPF's Polish-Lithuanian business. A cap on all non-interest costs associated with consumer credit will also come into effect at the end of March in Poland. Management hopes a planned product launch there will mitigate around half the £30m consequent losses.