(Adds CEO comments, details, shares)
By Noor Zainab Hussain
Oct 24 (Reuters) - International Personal Finance (IPF), which provides small personal loans in Europe and Mexico, said it is evaluating possible changes to its Polish operations as it tries to reduce the impact of changes to Poland’s corporate tax rate.
IPF said on Tuesday it had issued 5 percent more credit in the third quarter, but the group is facing challenges in a number of its main markets, with disruption in Mexico due to the recent earthquakes and possible tax changes in Poland.
IPF’s shares were down 1.5 percent at 196.50 pence at 0912 GMT.
On Oct. 4 the company said that if Poland’s proposals went through in their current form, IPF’s 2016 tax bill would be between 12-14 million pounds ($15-18 million) higher, due to changes in the way internal transactions between units of the company would be treated by the tax office.
Chief Executive Gerard Ryan said the firm needs to find ways to change how it structures internal deals on a tax-free basis.
“(We) have to think about what alternative we can come up with including trying to do third party deals as well,” he said, speaking on the phone from Warsaw.
Ryan said he met Poland’s vice-minister of finance on Monday about the issue.
“It was a constructive meeting. He understands our points, but he said (Poland) can’t build tax legislation around one company,” Ryan added.
Poland, where IPF has operated for 20 years and accounts for 30 percent of the group’s earnings, saw third-quarter credit issued rise 2 percent, helped by IPF’s digital business.
The consumer credit lender said it expects to see “slightly slower” rates of full-year credit growth in its Mexican business which accounts for around 25 percent of the company’s earnings.
Credit issued in Mexico fell 7 percent in September, but bounced back to 3 percent in October, Ryan said.
“When you have something like an earthquake, it upsets your team in the field as well as disrupting your customers. We’ve seen a slight tick up in impairment there to 34.8 percent, something that we believe ultimately we will recover,” he added. ($1 = 0.7581 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Rachel Armstrong)