Bank news proves drag on IPF shares

SHARES in emerging markets lender International Personal Finance fell 8.8 per cent last night, among the top FTSE 250 fallers, as the market assumed downbeat news about East European lender Erste Group Bank would hit the group.

But analysts poured cold water on the idea, saying the two companies trade in totally different areas.

Erste Group Bank warned it will make a net loss this year of up to £700m after taking hits on its foreign currency loans in Hungary and euro zone sovereign debt.

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James Hamilton, analyst at Numis Securities, said: “Erste Bank had a profits warning today. It does Eastern European foreign-currency mortgage lending. Now it’s obviously been picked up by a couple of traders who have said, ‘Ooh, IPF does Eastern Europe, and it must be affected’.

“But IPF does not do mortgages, it does not do foreign currency loans, and so it is not affected.”

Numis expects IPF to make record profits again this year.

Danielle James, analyst at Shore Capital, said: “Is IPF the same business model as Erste Bank? Absolutely not, really. I think generally as well it’s probably not the same customer profile that they’re dealing with.

“I understand why people have perhaps drawn the correlation there, because it’s the same regional exposure, but I certainly wouldn’t expect IPF to be ‘riskily’ positioned.”

IPF’s shares closed down 22p at 231p.

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