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The Pakistan Credit Rating Agency Limited
Press Release

Date
03-Mar-21

Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com

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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
Current
(03-Mar-21)
Previous
(04-Mar-20)
Action Maintain Maintain
Long Term AA+ AA+
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

The ratings reflect OLP's leading market position in the industry. In the current economic conditions, the focus of the Company remained on risk management and risk diversification. The presence of three independent and four non-executive Directors on the Board, having vast industry experience in their respective fields, provides extra strength to the Company’s standing and governance structure. Further, the Company utilizes its experience of the past thirty-four years to gauge the market situation and take right decisions in the fast changing environment.
COVID-19 has raised multiple challenges for corporate and financial sectors. While ramifications of the pandemic are still unfolding, the economic wheel has started rolling. This has been positively cushioned by steps taken by the regulatory and governing bodies including reduction in the interest rates. Under challenging conditions, OLP remained focused on maintaining the quality of its assets and exploring various options to maintain profitability, which was successfully achieved in the recently reported period.
The economic revival with impetus on construction sector along with the growth of automobile sector bodes well for the company. The Company is committed to expanding its portfolio with extreme caution and maintaining a quality portfolio by mitigating respective risk.
The Company maintains a fairly healthy funding structure; main source of funding remains bank borrowing and CoDs. The Company’s ability to maintain its market position while generating sound profitability is due to a diverse customer base. Finance leasing represented the major portion of the earning assets while financing portfolio is also increasing at a rapid pace due to high demand for financing of saloon cars.
The Company’s rating also depends 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 (49.58%), Arif Habib Group (7.92%) 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. 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. It constitutes four Non-Executive Directors who are nominees of ORIX Corporation, three independent directors and the Chief Executive Officer (CEO) and Deputy CEO as 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 with clear job responsibilities and experienced professionals 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.