Oman Orix Leasing Company: Turning a new leaf
Published: 23/08/2017 12:00 pm
Oman Orix Leasing Company retained its second position for the second straight year among non banking finance companies (NBFCs) in this year's Business Today-EY survey. The company performed well in parameters such as return on equity (ROE) and efficiency, where it scored more than its peers. Overall the company scored 238 points in the survey.
In 2016, the company's net profit grew by 4.91 per cent to RO5.53mn compared to RO5.27mn in the previous year. Its net profit growth was the third best among six NBFCs. In terms of earning per share (EPS), the company's performance was second to only National Finance. Interestingly, National Finance has signed an agreement under which Oman Orix would be merged with it. The company reported an EPS 22bz per share for the year 2016. Similarly in terms of RoE, the company gave a 14.93 per cent return in 2016, which is the highest among peers.
In its annual report the company said that increase in net profit was led by a healthy growth in revenue and net lease income. During the year, the company operated in a highly competitive market to achieve healthy growth in business volumes and revenue.
The report said it has been successful in its effort to maintain a quality portfolio. Apart from the recovery efforts, prudent credit policies and the continuous and consistent credit evaluation process, have all contributed to raising the quality of the credit portfolio. Focus on this area was further strengthened during the year with advanced controls and risk monitoring processes.
The company has maintained non-performing loan ratio at a healthy level. Loan loss provision coverage was higher than many of its peers reflecting prudent level of cumulative loan impairment provision of RO10.107mn.
On outlook it said,”Lower oil prices and huge budget deficits as a result will impose significant challenges during the year 2017. The government is looking to minimise budget deficit by reducing subsidies and cutting costs. Any constraints on liquidity situation in the market could exert pressure on the quality of portfolio and the banking sector might experience some increase in bad debts.”