The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Obaid

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of ORIX Leasing Pakistan Limited

Rating Type Entity
(16-Aug-18 )
(12-Feb-18 )
Action Maintain Maintain
Long Term AA+ AA+
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

The ratings reflect OLP's augmented market position in the industry. The Company's operations are supported by quality risk management framework and strong internal controls. The management, while exploring various options to garner future growth, continues to emphasize on improved spreads, increased geographical outreach and diversification into different businesses by utilizing the capital available to the Company. OLP's total asset base increased by 6% since Jun17 and the net interest income has improved with reduction in interest expense. The reported profitability of PKR 1,124mln in 3QFY18 is the highest profit in the company's history on the back of sale of shares in Oman ORIX Leasing SAOG. The Company maintains a fairly healthy funding structure, main source of funding remains bank borrowing and CoDs. OLP’s capital structure benefited by the issuance of right shares during 1QFY18. The paradigm change is emerging as OLP expands its operational horizon with a new license as Investment Finance Company. Association of OLP with ORIX (Japan) is a consideration.
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.

About the Entity
ORIX Leasing Pakistan Limited (OLP) commenced commercial operations in 1986. OLP is listed on Pakistan Stock Exchange (PSX). OLP is majority owned by ORIX Corporation (49.6%), Arif Habib Limited (8.7%) and State Life Insurance Corporation (SLIC) (5.25%). The remaining shareholding is distributed among other corporates and the general public.
ORIX Corporation (ORIX), established in 1964 is a major conglomerate with a vast global presence. Starting with leasing, ORIX presently has interests in many sectors including Asset management, Automobile, Insurance and Energy to name a few.
The Board of Directors (BoD) comprises of nine members, including the Chief Executive Officer (CEO). It constitutes four nominees of ORIX and four independent directors and the CEO. Apart from CEO all are non-executive directors. Mr. Shaheen Amin, CEO, is a seasoned professional and has been associated with the ORIX group since 1986. OLP has a well-defined organizational structure and with clear job responsibilities experienced professionals are heading key functions.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.