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Orix's Sale of Banking Division Has No Credit Impact, S&P Says

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Orix's (TYO:8591) sale of its banking segment should not impact its creditworthiness, S&P Global Ratings said in a Tuesday release.

The Japan-based company plans to sell its subsidiary Orix Bank to Daiwa Next Bank, a subsidiary of Daiwa Securities Group (TYO:8601), for about 370 billion yen.

The banking segment comprises only about 5% of the group's risk-weighted assets, according to S&P's analysis.

Meanwhile, the sale will result in about 124.2 billion yen in pre-tax gain, the rating agency said.

S&P expects the company to maintain a risk-adjusted capital ratio between 9% and 10% for the next two years with the sale's completion.

Following the sale, the group will further reallocate capital toward more profitable pursuits and business expansion, S&P said.

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