EDMONTON, Feb. 1, 2013 /CNW/ - The Cash Store Financial Services Inc.
("Cash Store Financial") (TSX:CSF) (NYSE:CSFS) today announced that it
has launched a new suite of line of credit products in Ontario. These
line of credit products are designed to better serve the under-banked
consumers through flexible medium term credit products and help build a
credit history and move toward lower cost mainstream credit.
"This suite of unsecured line of credit products enables consumers to
move up the credit ladder toward credit-scored products that will
eventually enable access to mainstream lending products. With each step
up the ladder consumers get better rates and more flexible repayment
terms," said Gordon J. Reykdal, Chairman and CEO.
"Over the past 10 years Cash Store Financial has leveraged the
popularity of payday loan products to build a network of 178 branches
in the province of Ontario. We have distinguished ourselves from our
competitors by building a branch environment, much like a bank, that
enables consumers to conduct their affairs in a private and respectful
manner. Customers appreciate this approach and they have demanded
better products and access to more bank-like services. Expanding our
focus to emphasize a more mainstream approach has been a long-term
priority for the Company. The potential to more effectively leverage
our branch network is significant."
Mr. Reykdal added: "Our ultimate goal is to lengthen the relationship
with the customer and to reduce their future borrowing costs with a
more traditional source of funding. We believe this product offering is
a great first step toward this goal."
Cash Store Financial's line of credit products have been tested
nationally for over a year. The full suite of products was introduced
in Manitoba in the fall of 2012, where the Company no longer offers
payday loans. Consumer acceptance of the product offerings has been
strong. The Company intends to establish lines of credit products in
Ontario as its primary product offering. Payday loans are no longer
being offered but the Company intends to maintain a payday loan license
in the Province of Ontario, at least until such time that the success
of the new product offering has materialized as the Company
anticipates. The lines of credit are traditional, revolving loans, with
regular minimum payments tailored to customers' needs and profiles.
Management has determined that the restrictive nature of Ontario's
payday loan regulatory scheme prevents it from meeting consumer
demands. These new product offerings fall under relevant Federal laws.
This provides the Company with the requisite flexibility to effectively
serve a broader customer base with better products, at rates that are
appropriate to the credit risk associated with each line of credit
advanced.
About Cash Store Financial
Cash Store Financial is the only lender and broker of short‐term
advances and provider of other financial services in Canada that is
listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial
also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store
Financial operates 512 branches across Canada under the banners "Cash
Store Financial", "Instaloans" and "The Title Store". Cash Store
Financial also operates 25 branches in the United Kingdom.
Cash Store Financial and Instaloans primarily act as lenders and brokers
to facilitate short-term advances and provide other financial services
to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides a private-label
debit card (the "Freedom" card) and a prepaid credit card (the "Freedom
MasterCard") as well as other financial services, including bank
accounts.
Cash Store Financial employs approximately 1,900 associates and is
headquartered in Edmonton, Alberta.
Cash Store Financial is a Canadian corporation that is not affiliated
with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd.
operates in the United States under the name "Cash Store". Cash Store
Financial does not do business under the name "Cash Store" in the
United States and does not own or provide any consumer lending services
in the United States.
This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning United States federal
securities legislation, which we refer to herein, collectively, as
"forward-looking information". Forward-looking information includes,
but is not limited to, information with respect to our objectives,
strategies, operations and financial results, competition as well as
initiatives to grow revenue or reduce retention payments. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "estimates", "plans", "expects", or
"does not expect", "is expected", "budget", "scheduled", "forecasts",
"intends", "anticipates", or "does not anticipate", or "believes" or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved". In particular this news release contains
forward-looking information with respect to our goals and strategic
priorities, introduction of products, share repurchase initiatives,
branch openings and competition as well as initiatives to grow revenue
or reduce retention payments. Forward-looking information is subject
to known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of Cash Store Financial, to be materially different from
those expressed or implied by such forward-looking information,
including, but not limited to, changes in economic and political
conditions, legislative or regulatory developments, technological
developments, third-party arrangements, competition, litigation, risks
associated with but not limited to, market conditions, and other
factors described under the heading "Risk Factors" in our Annual
Information Form, which is on file with Canadian provincial securities
regulatory authorities, and in our Annual Report on Form 40-F filed
with the U.S. Securities and Exchange Commission. All material
assumptions used in providing forward-looking information are based on
management's knowledge of current business conditions and expectations
of future business conditions and trends, including our knowledge of
the current credit, interest rate and liquidity conditions affecting us
and the general economic conditions in Canada, the United Kingdom and
elsewhere. Although we believe the assumptions used to make such
statements are reasonable at this time and have attempted to identify
in our continuous disclosure documents important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. Certain
material factors or assumptions are applied by us in making
forward-looking information, include without limitation, factors and
assumptions regarding our continued ability to fund our payday
loan business, rates of customer defaults, relationships with, and
payments to, third party lenders, demand for our products, as well as
our operating cost structure and current consumer protection
regulations. There can be no assurance that such information will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking information.
We do not undertake to update any forward-looking information, except
in accordance with applicable securities laws.
SOURCE: The Cash Store Financial Services Inc.
