PACRA Maintains Entity Ratings of OLP Financial Services Pakistan Limited

OLP Financial Services Pakistan Limited ('OLP' or 'the Company') is owned (49.58%) by ORIX Corporation ('ORIX' or 'the Group'). Established in 1964, ORIX is one of Japan's leading integrated financial services groups worldwide. The Group has 60 years of experience and a total asset base of multibillion dollars. OLP offers value-added financial products and innovative, customized financial services throughout Pakistan, with a general focus on SMEs. By doing so, the Company has helped improve these SMEs' corporate character while boosting capital formation. OLP is a market leader in its operations segment and has continued to deliver excellent performance. The topmost asset class is the vehicle segment in OLP's financing portfolio, followed by plant and machinery, which comprise the book's predominant portion. OLP has maintained asset quality with a deep understanding of the markets, prudent and institutionalized risk management, and close ties with its customers, reducing its delinquencies and adding to its strength. At the same time, settlements with the clients also help realize the stuck-up receivables. The policy rate has come down, and it seems promising for vehicle financing. The business volume is expected to go up. The spreads are under pressure until the whole interest rate equation gets settled for a medium term. Given anticipated volumetric growth, the profitability from the financing business is expected to go up, except for the impact of heightened operational costs. The Company maintains a healthy funding structure primarily from financial institutions, supplemented by Certificates of Deposit (CoDs) and a Privately Placed Term Finance Certificate (PPTFC). Diversified funding sources, a significant liquid investment portfolio, and a robust Capital Adequacy Ratio (CAR) highlight the Company's strong financial position.
The Company’s rating depends upon the relative positioning of the Company in the sector, sustained asset quality, stability of its operations, and the sustainability of its financial performance. Additional comfort is derived from the Company’s affiliation with ORIX, a renowned sponsor entity. Any significant change in the risk profile may adversely impact the ratings.

About the Entity
OLP Financial Services Pakistan Limited ('OLP' or 'the Company') is a public listed company. OLP holds an Investment Finance Services license under the Non-Banking Finance Companies Rules and offers a comprehensive range of value-added financial products, including commercial and consumer vehicle leases, certificates of deposit, term finance, and agri finance. The Company's shareholding is led by ORIX Corporation (~49.58%), followed by State Life Insurance Corporation (~9.81%) and Ms. Atiqa Begum (~7.91%). ~25.79% of the stake resides with the general public, while the rest is distributed among various entities. Mr. Khalid Aziz Mirza is the Board's Chairman, and Mr. Shaheen Amin is the CEO. They are assisted by an experienced management team.