The shares closed the day down 19p at 162p.
Leeds-based IPF said its 2016 pre-tax profit fell 20.2 per cent to £92.6m, following intense competition from digital and payday lenders in some key markets such as Poland and regulatory changes that capped costs.
Chief executive Gerard Ryan said Ryan said digital rivals are luring away IPF's higher creditworthy customers, forcing the company to spend more to retain them.
Home credit business accounted for more than 90 per cent of the company's total revenue in 2016.
"We expect the competitive and regulatory environment to remain challenging," said Mr Ryan.
Some European countries, such as Slovakia, have imposed a cap on the fee and costs that lenders can charge from customers, hitting profits and making it difficult for IPF to serve high-risk customers. The company shut down its operations in Slovakia in 2016.
Lenders charge more money to higher risk customers than those with better credit rating.
Poland, which together with Lithuania makes up IPF's biggest market, has also proposed to lower the limit on non-interest costs to 75 per cent of the amount of the loan from 100 per cent.
The company said it decided to cease lending to high risk customers in Poland in the fourth quarter.
IPF was also hit by investments in its digital platform.
“It has been a difficult year for our company and its shareholders," said Mr Ryan
"We delivered continued strong growth in Southern Europe and IPF Digital, but faced further regulatory challenges in Europe, particularly in Poland.
"Performance in our Mexican home credit business was below our original expectations, but actions taken delivered a significantly improved performance in the second half of the year."
On a brighter note, he said the group sees opportunities to optimise its European home credit operations and will utilise the returns generated by these businesses to invest in growing Mexico home credit and IPF Digital.
Analyst Gary Greenwood at Shore Capital said: "The group is engaging with the Polish authorities in respect of new proposals by theMinistry of Justice to set an onerous new price cap, with some signs of positive progress here. This is the key driver of the shares at present.
"Having dropped as low as 161p in December, the shares have since drifted gently higher as, we assume, the market has taken ‘no news is good news’ view of the Polish Ministry of Justice’s price capping proposals. Although valuation multiples remain depressed, the range of possible outcomes is still very wide with material share price risk both to the upside and downside."
Analyst Justin Bates at Liberum said: "We see circa 10 per cent downgrades to consensus 2017 adjusted pre-tax profit forecasts.
"Ongoing competition and regulatory headwinds in Czech, a softer outlook on growth in Mexico on account of potentially adverse policies enacted by the US despite a recovery in performance through the second half, a further £8m to £10m investment in Digital and collect-out costs in Slovakia should result in a drag on 2017 pre-tax profit progression.
"We now expect an adjusted pre-tax profit result for 2017 in line with the 2016 level."
London Stock Exchange announced late on Wednesday that IPF will be booted out of the FTSE 250 following a fall in its market capitalisation.
From Monday March 20, IPF will be listed in the FTSE Small Cap Index.