Lasco Financial Services Limited, LasFin, reported a 30 per cent dip in earnings for year ending March 2023, largely due to a reset in the remittance market from COVID-19 highs, the company said.
The company, which is in the business of money services and microlending, made a profit of $213 million, down from $306 million a year earlier, on revenues which also fell 12 per cent year-on-year to $2.2 billion.
“The decrease in earnings indicates the normalisation of market share, which reverted after the return to market of a key remittance services competitor at the beginning of the financial year,” Managing Director Jacinth Hall-Tracey said in the preamble to the financial results.
Jamaica hit a historic high of US$3.5 billion in remittance inflows in 2021, but those numbers ameliorated somewhat to US$3.44 billion last year.
Lasco Financial is also feeling the pinch of the near-flat status of the market in the January to March period, when remittance inflows experienced an uptick of just 0.9 per cent.
LasFin is the second-largest player in Jamaica’s remittance market and serves as an agent for MoneyGram, Ria Money Transfer, Remitly and Boss Revolution. Its chief rival is GraceKennedy Remittance Services, which is the exclusive agent for Western Union.
Competition aside, LasFin has been at risk of losing revenue since the outbreak of the COVID-19 virus to digital money channels which charge lower fees to send money to Jamaica. In a bid to stabilise revenues, the company sought approval from the Bank of Jamaica for the Lasco Gold Visa prepaid cards which it launched in July 2022.
“Revenues from this business venture made a valuable contribution to our overall income. We are excited at the prospects of this business and the anticipated growth prospects,” Hall-Tracey said.
LasFin also received the central bank’s approval last year to add another three remittance service providers to its network, amid plans to expand its remittance business beyond roughly 140 agent windows, especially in rural towns.
The new service providers are yet to be named.
Outside of remittance services, LasFin’s business lines include microlending, cambio services and payment services, all of which Hall-Tracey said positively contributed to the year’s results. Overall, revenues from those services were up 36.5 per cent year-on-year, she said.
Its microfinancing business, Lasco Microfinance Limited, continues to see moderate loan portfolio growth year-on-year, after booking a loss of $650 million on impaired loans at the onset of the COVID-19 crisis.
Growth in the loan portfolio for FY2023 came from a shift in focus away from its historical target client of microbusiness and microcredit borrowers, to small and medium-sized enterprises on the path to recovery from the pandemic.
Lasco Microfinance’s loan portfolio grew to $900 million with impairment provision of $138 million for FY2023, compared to $813 million with impairment provision of $200 million a year earlier.
Still, it lags behind the company’s pre-pandemic loan portfolio performance, which hovered at $1.5 billion for FY2020.