Wed | Aug 15, 2018

Lasco Financial forms new loans subsidiary as business triples

Published:Friday | February 2, 2018 | 12:00 AM
Jacinth Hall-Tracey, managing director of Lasco Financial Services Limited.

Lasco Financial forms new loans subsidiary as business triples

Lasco Financial Services Limited has bundled its loan business into a new subsidiary called Lasco Microfinance Limited, following its acquisition of CrediScotia, a deal that served to triple its loan book to $1.8 billion.

The restructuring, which is ongoing and now sees the company referring to itself as LASF Group, effectively organises the operations under two main business lines, money services and loans.

Lasco Financial Services will maintain focus on the remittance and cambio or foreign exchange trading operations, while Lasco Microfinance will focus solely on the loans business. A second subsidiary, LFSL Barbados Limited, handles MoneyGram through agent Courts Unicomer Limited, says Lasco Financial Managing Director Jacinth Hall-Tracey.

"CrediScotia will be renamed Lasco Microfinance Limited and will be rebranded accordingly. We feel it is the most efficient way to run the business rather than to maintain two loans businesses. It also allows us to give the business the focus it requires to achieve its objectives," Hall-Tracey said.

The new loans subsidiary will operate a network of 13 branches. Lasco Financial itself also offers its services to consumers - including bill payment and mobile top-ups as advertised on its website - through a series of Money Stores that are currently located at Red Hills Road and Papine in Kingston, and at the Bay West commercial complex in Montego Bay.

The loan operations now account for "just under 10 per cent" of group revenue. Hall-Tracey said this week that she aims to grow that, but as to how much the CrediScotia business is expected to add to revenue, the MD said the company does not normally release forecasts.

LASF Group revenue nearly doubled in the December quarter from $288 million to $407 million, which Hall-Tracey said was linked to seasonal increases from the remittance and cambio side of the operation, alongside one month of revenue from CrediScotia.

LASF Group acquired 100 per cent shares in Scotia Jamaica Microfinance Company Limited, trading as CrediScotia, through a share-purchase agreement with Scotia Group Jamaica. The acquisition contributed to a substantial rise in LASF Group's loan business, from over $600 million to $1.85 billion, and the doubling of its asset base from $1.6 billion to $3.2 billion.

It makes Lasco Financial a bigger contender among the top three companies in the microfinance market, but it still trails Access Financial, whose loan book was last valued at $2.68 billion, and JN Small Business Loans, which is now writing more than $4 billion of loans annually.

In addition to its lending, money transfer and foreign currency trading operations, Lasco Financial added a health insurance product in partnership with Guardian Life Insurance Company Limited in the December quarter, which allows Lasco clients access to group insurance rates. The packages for individuals and families cover doctor's visits, prescriptions, laboratory services, imaging services, dental and hospitalisation.

Hall-Tracey, who has run the company since 2004, indicated that other product innovations are likely, but signalled that the company is unlikely to add new business segments.

"LFSL is positioning itself to serve the micro sector and provide financial products to that market through its current business lines," she told the Financial Gleaner.

As to what the company will look like in three to five years, "LFSL will be a microfinance company offering a full suite of financial products to the micro sector. We are looking to make an impact on customers' lives by giving more Jamaicans more opportunities to access financial services," Hall-Tracey said.

avia.collinder@gleanerjm.com