PACRA Maintains Entity Ratings of ORIX Leasing Pakistan Limited (28-08-2019)

Lahore, August 28, 2019 (PPI-OT): The ratings reflect OLP’s leading market position in the industry. The risk management framework and strong internal controls are the mainstay of OLP’s operations. The management, while exploring various options to garner future growth, continues to emphasize on sustainability of operations. The strategy is supplemented by OLP’s extended outreach. OLP believes in timely re-positioning as is evident from the sale of its overseas strategic investments over the last few years, investment in Islamic arm through acquisition of a modaraba and addition of value-added services to standard leasing products.

OLP has a diverse product base with financial leasing representing the larger proportion of the earning assets pie. The Company has also built up a sizeable finances portfolio comprising of vehicles, microfinance and Islamic finance. OLP is aiming to develop non-spread based income streams to maximize its return without taking extended risk. Its strength of business model lies in its ability to accurately gauge the pulse of the borrowers and their credit appetite in the context of the fundamentals of their businesses. In the current subdued economic environment, OLP is closely monitoring the risk profile of its portfolio and risk management.

An overall cautious approach is being taken, as also reflected from the reduced rate of new business. The Company maintains a fairly healthy funding structure; main source of funding remains bank borrowing and CoDs. OLP’s capital structure is strong. Association of OLP with ORIX (Japan) and emphasis on strong governance structure as reflected by nearly 45% independent members on OLP’s Board, provide extra strength to the Company’s standing.

The ratings are dependent on the Company’s ability to maintain its market position while generating sound profitability. The ratings also depend upon keeping its financial profile intact. Any significant change in its risk profile may adversely impact the ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com