Remittance transactions up 11 per cent to earn $50.4 million

By Durrant Pate

Lasco Financial Services (LASF) is reporting a revenue fall off of $37.8 million in its second quarter ended September 30 to earn $617.7 million.

The 5.7 per cent revenue decline is largely due to the fall in earnings from its subsidiary loan company, which amounted to revenues of $152.2 million, a reduction of 34.5 per cent when compared with the previous quarter in 2019. There was, however, a compensating increase of $50.4 million or 11 per cent jump in revenues from remittance transactions and a $33.5 million or 10.8 per cent increase in Cambio revenues.

In its just released unaudited financial statements for the second quarter, Lasco Financial Services reports that, “the loan business continues to experience the residual impact from the effects of the COVID pandemic, whereas the money service business showed strong quarterly growth. At the onset of the COVID pandemic several initiatives were put in place to control non-essential expenditure, as such there was a 32 per cent reduction in expenses in the quarter, primarily caused by the reduction in selling and promotion expenses”.

Losses in first quarter erased in Q2

Profit for the second quarter closed at $136.0 million compared with a loss of $16.4 million in the previous quarter in April-June this year. Consolidated profit after tax for the six months ending September 2020 was $30.1 million, down from the corresponding period’s $74.7 million but an improvement on the first quarter which showed a loss of $105.7 million.

Contributing to the improvement in performance was the decision by management to place its focus on assisting its existing customers to navigate their business challenges using moratoriums and cash preservation strategies. In her report to shareholders, Managing Director Jacinth Hall-Tracey explains that, “there will now be a shift towards lending again, however, as opportunities for lending are now beginning to manifest as businesses are adjusting to the new normal with some embracing new opportunities”.

Remittance and cambio business resilient

The quarter has been good for the remittance and cambio businesses, which continue to show resilience in keeping with the board and management’s strategic objectives of having a strong and diversified revenue base. According to Hall-Tracey, “as our company pursues its strategy of financial inclusion to assist small, medium and micro entrepreneurs to embrace the opportunities which will arise from the new methods of conducting business, we are pleased to advise that LASF has been approved by the Bank of Jamaica to pilot its new service LASCO Biz within the Regulatory Sandbox”.

Through LASCO Biz, Lasco Financial Services will give access to an e-Commerce platform, allowing merchants to accept card payments electronically on a website or through the use of payment buttons. The platform will also benefit businesses, as it will provide them with simplified inventory management and financial statements.

Upon full approval, Lasco Financial Services will make the service available to the general public.

Balance sheet highlights

Cash and short-term deposits went up by over 200 per cent or $739.1 million over the corresponding quarter in 2019. This increase in cash is due to the reduction in lending, as well as increased revenues from the money service business.

Total assets reduced year over year by $127.9 million or 3.1 per cent to close the quarter at $3.98 billion. The Lasco Financial boss states that “the general direction of the LASF group is an indication of the growth potential and sustainability of our business model: financial Inclusion, micro finance and micro payments”.

As such, the company said it was pleased to have participated in the disbursements of the Government of Jamaica’s CARES Grants through its diversified agent network during the quarter.

Also, over the course of the pandemic and continuing, Lasco Financial Services displayed its diversity in payment services, allowing customers to receive remittances directly to their bank accounts as well as to their LASCO Pay prepaid card, serving customers in store and online.

“While we progressively enable our customers towards digital services, LASF will continue with its blended operations to support its large cash network to bring value to our agents on a sustained basis. We thank you for your continued support and thank our team; agents, customers, Board of Directors, management, staff and key stakeholders, “ Hall-Tracey concluded.