OTP Leasing is not only the leading leasing company on the Croatian market, but also become synonymous with leasing, in which the risk management sector played a significant role
Member of the OTP Leasing Management Board in charge of risks embarked on her professional journey in the leasing industry a little under 20 years ago, and has seen firsthand changes that leasing as a product has undergone in that time – a number of positive transformations that have created a regulated environment that provides leasing customers with a number of advantages and protection from unfair practices, as well greater security and confidence in leasing as a financing method.
WHAT MAKES LEASING A GOOD BUSINESS DECISION?
Financing through leasing can certainly be a good business decision, as it allows preservation of liquidity without the need to engage significant initial investments, as well as the flexibility of choosing different financing options. Leasing can improve the lessee’s financial picture and provide a number of tax advantages, as well as enable maintaining competitiveness and keeping up with technological developments, which ultimately enables faster and easier replacement and renewal of assets.
WHAT MAKES OTP LEASING STAND OUT ON THE MARKET?
OTP Leasing has been the leading leasing company on the Croatian market in terms of new volume for three consecutive years in a row. Our priority is finding optimal financial solutions for our lessees, and the operational excellence we strive for is result of many years of experience. Our experts, through individualized approach and advisory role, provide our lessees with a range of products and service quality, whose quality is clear from our long-term sustainable business relationships. We are humbled by this, and at the same time we are aware of the responsibility towards our partners, lessees and owners. We also understand it takes continuous work and innovation within the given regulatory frameworks in order to remain in that position.
WHAT IS THE ROLE OF THE RISK MANAGEMENT DEPARTMENT?
The risk management sector at OTP Leasing plays a key role in maintaining the long-term stability and sustainability of the quality of our portfolio. Our strategy is based on a moderately conservative approach to risk taking, which has proven to work well so far. At the same time, it has an important role of supporting development-related activities and encouraging further progress of the Group in accordance with defined risk appetites. Particular attention is paid to the financial condition of the lessee, the purpose of the leasing, sources for repaying, the value of the collateral used as insurance for the leasing transaction, the specifics of industrial sectors, and all specifics that could have direct or indirect influence on the decision on financing.
WHAT IS CREDIT RISK? HOW IS IT MANAGED?
Credit risk is a type of financial risk that refers to the risk of loss due to non-fulfillment of the lessee’s financial obligations to the leasing company. The creditworthiness of the leasing applicant, the reliability and financial strength of the supplier, as well as the market value, the movement of the depreciation value, the expected life expectancy of the leasing object, and the estimated residual value of the leasing object at the end of the leasing contract are analyzed. Risk analysis is also calculated at the level of the entire credit portfolio, to ensure adequate diversification of the portfolio by type of clients, sectors, products etc.
WHAT IS OPERATIONAL RISK?
Operational risk is the risk of loss due to inappropriate or incorrectly performed business processes, procedures and omissions related to human resources or systems within the leasing company, or due to external influences or events. OTP Leasing has established internal control mechanisms for the purpose of education employees and establishing an effective operational risk management system. Communication is encouraged, so that responsible persons can catch deficiencies in their respective processes, as well as potential dangers from events that can cause significant losses for the company.
CAN YOU EXPLAIN THE CONCEPT OF RISK APPETITE?
The term risk appetite represents the amount of risk that the leasing company is willing to accept in order to realize their objectives. At the level of OTP Leasing, risk appetite represents the aggregated level of risk that the company is ready to assume or tolerate, which is decided in advance and within its own capacities, all with the aim of achieving strategic goals and realizing the business plan.
WHAT WOULD YOU LIKE TO HIGHLIGHT IN RELATION TO VESSEL LEASING?
We are extremely proud of our vessel financing segment, for which we are especially grateful to our partners (suppliers/charter agencies), leasing recipients and owners, who have all recognized the specifics of our local market, trusted us and provided support in the development of our vessel financing segment. Our top experts in the vessel financing segment, led by Gordan Devivi and Duje Ferić, possess the necessary expertise, and are also totally dedicated to each client, to finding optimal financial solutions. And it is precisely this care for the client through an open and professional relationship, with a high level of expertise, and advising the client at every step that characterizes working with OTP Leasing in this financing segment as well.
Photos Boris Kačan
