Lasco Financial Services Limited’s (LASF) Managing Director, Mrs. Hall-Tracey opened her address by highlighting the challenges and successes the company had over the past year and what the company will do to capitalise on opportunities and to meet the challenges. She noted that despite the closure of some outlets due to the lottery scam, the company was able to increase revenue year over year and double revenue over the last five years, with an increase rate of growth. “If we were to continue at this rate, all things being equal, in less than four years revenue would be in the region of $2 billion”, according to Mrs. Hall Tracey.  The company is in the middle of a 24-month plan to take the business to the next level as per Mrs. Hall-Tracey. This had led the company to make key chances to its internal structure and operation. Among these, was a review of the loans division, which was found to be inadequate given the scale of the loan business and the need for customer engagement.  They have since restructured the division and brought on Mr. Frank Whylie to lead the division.  As such, she indicated that the company, “has set solid foundation to diversify away from cambio operations to loans.”  They have also introduced new loan products for ‘health’ and ‘wealth.’ On the issue of customer engagement, the Managing Director indicated that the company had engaged the services of social media specialist to reached and engage with customer over social media. On the area of risk management and compliance Mrs. Hall-Tracy noted that the company’s aim is to find new ways to automate the monitoring of customer transactions near to real time to detect suspicious activity faster in order to protect the brand and reputation of Lasco. To that end, the company is moving to a software package used by its banking partner to mitigate against the de-banking risk which have been impacting cambio operators island wide.

Despite the other players in the mobile wallet sector realising little growth or positive results, Lasco Financial will move forward with its plan to launch a mobile wallet in keeping with its commitment to “give the masses access to financial services” according to Mr Hall-Tracey. The mobile wallet is currently in its proof of concept phase with the Bank of Jamaica and will progress thereafter to full application and launch. Lasco Financial also began its product development for micro insurance and have advised that customers are now being offered a health care plan through a partnership with Guardian Life Insurance Company.

Pivoting her focus to the company’s performance highlight, the Managing Director noted that the following revenue streams grew as follows; Remittances up 25%, Transaction up 7%, Cambio up 33% and Pay-out up 7%. The growth in the company’s remittance business was relative to a 4% aggregate growth in the remittances sector. Revenues from loans were up 44% while the loan portfolio was up 57% to total just under $500 million. Other operation income was down by 27.3% reflecting a loss in telecom division and a reduction in revaluation gain, the subsidiaries in Barbados produced a low profit margin but a high return on investment.

On the issue of operating cost; staff cost was up 32%, rental up 48%, insurance 68% bad debt up 750% and commission up 22%. The staff compliment moved from 62 to 89, this resulted in a 9% increase in wages and other 85% increase in other expenses. The significant increase in bad debt provision was due to the company targeting SMEs for loans, which is inherently more risky. The company also had a burglary at one of its cambio locations and a cyber hack, losing $1.4 million and $11 million respectively.  Mrs Hall-Tracey informed shareholders that discussions are being held with insurers to recover the losses, in addition, enhanced cyber security measures have been implemented.

Moving to her outlook, the Managing Director noted that the loans division having just been restructured is not yet contributing significantly to revenues and will become a key driver of growth. In addition, the cambio division will continue to benefit from Lasco’s money awareness campaign and the remittance arm will continue to reap the benefits of the 20 added agents. Finally, the company is aiming to increase efficiencies by moving processes on to allow customers to engage Lasco Financial at their own convenience.