International Personal Finance (IPF) Q1 2025 TU earnings summary

Executive summary

• Achieved 12% year-on-year growth in customer lending at constant exchange rates, driven by robust demand and operational momentum across all divisions.

• Notable momentum in Poland and Romania home credit, and digital businesses in Mexico and Australia, supported by IT upgrades and strategic initiatives; Mexico Creditea surpassed 100,000 customers.

• Net receivables increased by 10% to £885 million at March-end, with expectations for accelerated growth through the year.

• Continued strong customer repayment behaviour and excellent credit quality underpin performance and confidence in delivering 2025 plans.

• Execution of next-gen strategy progressing well, supporting growth and financial inclusion objectives.

Financial highlights

• Group annualized impairment rate dropped below 9%, well under the 14%-16% target range, reflecting excellent credit quality.

• Annualized revenue yield edged down from 54.7% to just over 54%, mainly due to lower yield in Poland; excluding Poland, yield was 57%.

• Cost-income ratio held steady at 61% for Q1, with expectations for improvement as revenue grows and technology investments deliver efficiencies.

• Equity-to-receivables ratio increased from 54% to 55%, aided by capital generation and favorable FX movements.

Outlook and guidance

• Anticipates faster receivables growth as the year progresses, especially in Poland (post full payment institution license) and Mexico home credit.

• Confident in meeting 2025 financial plans, with strong growth momentum, credit quality, and robust funding and capital position.

• Plans to invest impairment upside into capturing growth opportunities, targeting GBP 130-150 million receivables growth for the year.

• Revenue yield for Poland expected in the mid to late 40s, with group yield supported by high-yielding Mexican businesses.

• Cost-income ratio expected to decline over the next two years as growth and efficiency measures take effect.