Provident spin-off intends to buy back £25m of its shares

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EMERGING markets lender International Personal Finance grew customer numbers and kept a lid on bad debts as it weathers the European debt crisis.

The Leeds-based group, spun out of Provident Financial in 2007, announced plans to buy back £25m of shares. IPF plans to raise its dividend by 7.5 per cent to 3.23p per share.

It also revealed plans to raise £24m of debt through Czech bond issues.

Underlying pre-tax profits in the first six months of the year fell to £31.4m from £35.7m a year earlier, as it was hit by higher regulatory charges and foreign exchange costs. But customer numbers increased 7.3 per cent to 2.46m, with credit issued surging 12.2 per cent to £409.3m.

Chief executive Gerard Ryan said the eurozone crisis is not driving up impairments.

“The most important measure would be credit quality – it’s remarkably stable and proves how robust the business model is,” he said.

Impairments comprised 26.2 per cent of revenue at the end of June, versus 26.8 per cent a year earlier. That was at the lower end of its 25-30 per cent target range.

IPF also revealed it has shrunk its Leeds office from 175 to 150 staff, as it shifts resource to its countries of operation.

The job cuts contributed to £4.8m exceptional costs.

Mr Ryan said the buyback reflects IPF’s strong balance sheet and determination to boost shareholder value.

“In good times we grow very well, produce a lot of profit and spin off a lot of cash and capital,” he said. “In tougher times we grow less well and spin off even more cash and capital.

IPF lends in Poland, Crech Republic, Slovakia, Hungary, Mexico and Romania. Mr Ryan said the group plans to expand into adjacent countries, when start-up costs are lower.

These could include Bulgaria and Croatia and the Baltics.