Our ratings on ORIX Corp. reflect the company's solid business profile in Japan and its diversified financing methods. On the other hand, these factors are offset by high concentration risk in volatile real estate-related exposures and its vulnerability to market turmoil because it is highly dependent on market financing. ORIX's solid business profile in Japan is made up of diverse operations: leasing, corporate lending, real estate-related businesses, and investment banking. It has established a relatively solid customer base in its domestic leasing business, which consists mainly of small and midsize enterprises (SMEs). In addition, the company excels in providing financial products and services. Before the global financial crisis, ORIX's profitability was high, backed by its business diversification, abundant experience, and
