LASCO Financial Services Limited’s provision for loan impairment nearly doubled in the six months to September, as the microfinance and remittance group maintained a cautious lending policy and worked with customers whose budgets remain under pressure after Hurricane Melissa.

The group recorded a $9.4-million provision for impaired loan losses, up from $4.9 million in the corresponding period of 2025, according to its cash-flow statement. Over the same period, interest income from loans slipped 2.4 per cent to $163.4 million.

Accordingly, management says it is placing greater emphasis on customers’ ability to repay than on expanding loan disbursements. Its subsidiary, Lasco Microfinance Limited, lends to the microenterprise sector for personal and business purposes.

The company said it had been lending more conservatively following the hurricane and working with borrowers to tailor solutions to their needs and affordability.

“The company is seeking opportunities to increase responsible lending in the market, but customer affordability is paramount and as such, increasing disbursements is not as critical as maintaining yields in the space,” managing director Sharlene Williams said in her report to shareholders.

The interim filing does not explain what drove the increase in impairment or disclose delinquency rates. It also combines loans with other receivables on the balance sheet, limiting the information available on the performance of the lending portfolio.

That combined balance stood at $1.92 billion at September 30, compared with $1.82 billion a year earlier and $1.79 billion at March 31.

The group says it is also seeing signs of pressure on customers in its remittance business, even as transfers into Jamaica have increased overall.

“In terms of remittances, while the country experienced increased flows, we are now seeing some initial effects from a softened US labour market, increased cost of living locally, resulting in reduced disposable income to our customers,” management said.

Lasco Financial did not quantify the effect on its own remittance volumes or earnings. Alongside lending and remittances, its operations include foreign exchange trading, prepaid cards and e-commerce services.

Across the group, rising expenses outpaced income growth during the half-year. Total income increased 4.3 per cent to $1.17 billion, while expenses climbed 7.7 per cent to $1.02 billion. Selling and promotion expenses accounted for most of the increase, rising to $434.0 million from $385.0 million.

Operating profit consequently fell 13.6 per cent to $152.8 million. Lower finance costs and a smaller tax charge helped contain the decline in net profit, which finished at $87.6 million, compared with $88.4 million a year earlier.

The September quarter showed a steeper fall. Net profit declined 11.8 per cent to $42.0 million as expenses rose 10.2 per cent, almost twice the 5.5 per cent growth in total income.

Cash and short-term deposits ended September at $964.8 million, down from $1.24 billion a year earlier. Management attributed the reduction to normal working-capital fluctuations. The group also repaid approximately $43.0 million in loans during the half-year without drawing new loan proceeds.

— Karena Bennett