It is an early start for Christopher Rodrigues, but that is perhaps no surprise. International Personal Finance, of which he is chairman, has just reported its maiden results as an independent company following its spin-off from Provident Financial. This would be a busy time for any executive but, at the moment, for him it is frantic. The markets are in a febrile state and any institution which lends money is being closely watched. That is because the world is in the middle of a credit crunch caused by the US sub-prime mortgage crisis, which has seen tens of thousands of borrowers default on their loans.The contagion from this has spread around the globe and nearly sent Northern Rock, most of whose clients are "prime" borrowers, to the wall.
IPF, of course, is usually considered to be a sub-prime lender but, unusually, it appears to have suffered few ill effects from the current crisis. Mr Rodrigues, a man whose impressive CV is littered with senior jobs at lending institutions including Visa, American Express and Bradford & Bingley, has an explanation. "What a company like Northern Rock does is to borrow short-term money on the international money markets to lend long-term. We do the opposite. We advance small loans for a short period, usually no more than a year, but we borrow long-term to finance that. We have financing in place until 2010."
Mr Rodrigues has arranged to meet his PA at his Paddington home today, after which he will begin those all-important calls with investors.
Mr Rodrigues spends a lot of his time explaining to clients what IPF actually does. It is a job he is well suited to because he is an easy, entertaining speaker. IPF operates in Poland, the Czech Republic, Slovakia, Romania, Hungary and Mexico, offering loans door-to-door through a network of self-employed, mostly female agents, to people who tend to be shunned by the mainstream institutions. Unlike the sub-prime lenders which got into difficulty in the US, IPF places priority on a customer's ability to repay. It does not offer low "teaser" loan rates , which then rise sharply. These were, in part, responsible for the problems faced by US borrowers, who found themselves unable to repay at higher rates, while interest rates rose so much that refinancing their debts proved impossible.
"Our agents are incentivised through collecting repayments rather than selling loans, and our products are flexible enough to allow people to miss payments without penalty if they hit a bump in the road," says Mr Rodrigues. "The average repayment period for a loan of 52 weeks is actually 61 weeks, because people often find they do hit bumps. The average first-time loan is just £100."
Mr Rogrigues's first call is to a hedge fund. These, he has found, tend to be happier about putting money into IPF than more conventional investors. "What they are interested in is our business model and how it is going," he says. "They aren't so concerned about the fact that we don't have operations in the UK." He then heads to the London Stock Exchange to catch up with Numis, which acts as one of IPF's brokers.
Mr Rodrigues meets a US investor who wants to see how business is developing in IPF's two newest markets – Romania and Mexico. He is upbeat about the latter's progress, and has just hired a finance director in Puebla, near Mexico City. When he starts a new operation, Mr Rodrigues will have IPF people running the show but will swiftly bring in local managers. Selling door-to-door loans is controversial but, argues Mr Rodrigues, IPF clients have nowhere else to go. "It's not as if they have poor credit histories. Most of them have no credit history at all because most financial institutions won't deal with them."
Mr Rodrigues describes himself as a "soup and sandwich" man at lunchtimes but today he is having something more substantial at a sit-down affair with Royal Bank of Scotland, one of IPF's major lenders, which is trying to break up Barclays' planned merger with Dutch bank ABN Amro. Mr Rodrigues wants to hear how the ABN bid is going. If it is successful, RBS will get its hands on ABN's Russian corporate banking business. He is keen to work with RBS because IPF aims to expand into Russia. He knows the country well, having studied Russian economic history at Cambridge. "Consumer society has very much taken hold," he says. "If you go to a working-class area of Moscow, the only difference between a supermarket there and a Tesco in Britain is that there are more brands of vodka on the shelves. You know there is a market for what we do when you see people buying something like a microwave on credit and selling it to raise cash."
He has no fear of dealing with Russian authorities, despite the problems faced by some British companies in Russia, particularly those in natural resources. "A lot of what we've seen in Russia is about repatriation of national assets. In the financial sector, there have been overseas partners in there for a long time. There is no sense of Russia seeking to isolate itself – far from it."
Mr Rodrigues calls IPF's chief operating officer, John Harnett, to discuss investor meetings and the company's first management conference for its top 70 or so people later this year. Many are involved in the expansion into new markets and Mr Rodrigues mentions India and Ukraine as other targets. "A lot of our businesses are in eastern Europe and our senior people, because of their age, will have had to learn Russian at school, which is very useful to us." He then heads for a second meeting with his PA to hammer out details of a trip to Germany later today. In addition to his main job at IPF, he is also chairman of Visit Britain, a non-executive director of Ladbrokes the bookmaker, and chairman of the Windsor Leadership Trust.
Mr Rodrigues is on the Heathrow Express to catch a flight to Berlin but still finds time to take a call from Ladbrokes, whose remuneration committee he chairs. He will not get to his hotel until after 11pm. It is too late for a big dinner so he contents himself with the soup and sandwich he would have had at lunchtime, only washed down with a large glass of pilsner lager.
Name: Christopher Rodrigues
Educated: Cambridge University
Joined Provident Financial in January as joint deputy chairman and chairman of its international divison. When the business was broken up, he became executive chairman of Provident Financial. Previously, he spent three years as president and chief executive of Visa International.
Joined Visa from Bradford & Bingley, where he was chief executive and oversaw the building society's stock market flotation.Reuse content