Press Release
VIS Assigns Initial Entity Ratings to OLP Modaraba
Karachi, September 21, 2026: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings to OLP Modaraba ('the Modaraba') at ‘AA/A1+’ (Double A/A One Plus). Medium to long term rating of ‘AA' indicates high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of ‘A1+’ denotes strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’
OLP Modaraba was incorporated in 1987 as First Grindlays Modaraba and was initially controlled by ANZ Grindlays Bank. In 2000, Standard Chartered Bank acquired ANZ Grindlays Bank's operations in Asia, following which the Modaraba was renamed Standard Chartered Modaraba. In 2016, ORIX Leasing Pakistan Limited acquired Standard Chartered Modaraba and renamed it ORIX Modaraba. Subsequently, as part of the ORIX Group's rebranding initiative in Pakistan, the Modaraba was renamed OLP Modaraba. The Modaraba is managed by OLP Services Pakistan (Private) Limited ('the Management Company') - a wholly owned subsidiary of OLP Financial Services Pakistan Limited. The Modaraba operates through a head office in Karachi and two branches in Lahore and Islamabad. Listed on the Pakistan Stock exchange, the Modaraba is primarily engaged in financing of plant and machinery, motor vehicles (both commercial and private), computer equipment and housing under the modes of Ijarah (Islamic leasing) and Diminishing Musharakah.
The rating assigned to the Modaraba reflects its established franchise, strong governance framework, sound risk management practices, and adequate capitalization. The Modaraba benefits from its association with the broader OLP/ORIX franchise, supported by an experienced management team, structured policies and controls, and a diversified financing portfolio. Its Shariah governance framework remains well established, with ongoing oversight and compliance with applicable regulatory requirements. Asset quality has remained satisfactory, supported by prudent underwriting, active portfolio monitoring, and strengthening provisioning coverage. The financing portfolio continues to transition towards Diminishing Musharakah, with the gradual run-off of Ijarah assets. Profitability has come under pressure due to lower benchmark rates and reduced fresh disbursements; however, lower funding costs, sound asset quality and operating expense controls have provided some mitigation. Profitability is expected to remain constrained in the near term but should stabilize as the portfolio grows, digitalization supports operating efficiencies. Liquidity remains a key consideration, given the maturity mismatch between relatively shorter-tenor funding and longer-tenor financing assets, although this is partly mitigated by stable reinvestment behavior, diversified funding sources, cash buffers, and available financing lines. Capitalization remains adequate, supported by a stable record of earnings retention.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Non-Bank Finance Company
https://docs.vis.com.pk/Methodologies-2025/NBFC-Nov-2025.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf