(Repeat for additional subscribers)
July 11 (The following statement was released by the rating agency)
Fitch Ratings has affirmed Poland-based Europejski Fundusz Leasingowy S.A.'s (EFL) Long-Term
Issuer Default Rating (IDR) at 'A-' and National Long-Term Rating at 'AA(pol)'. The Outlook on
both ratings is Stable. A full list of rating actions is at the end of this rating action
EFL is ultimately owned by Credit Agricole (CA; A/Stable) through its 100%
subsidiary, Credit Agricole S.A. (CASA; A/Stable).
KEY RATING DRIVERS - IDRS, NATIONAL RATINGS AND SUPPORT RATING
EFL's ratings reflect Fitch's view of an extremely high probability of support
from CA, EFL's sole ultimate owner. This view is based on CA's proven commitment
to the Polish market, substantial funding provision to EFL in the past and
potential reputational damage from any subsidiary default.
Close operational integration with and supervision by the parent, including a
partial rebranding, underpin the narrow notching between CA's and EFL's IDRs.
However, Fitch views EFL as having only moderate strategic importance to CA due
to its modest contribution to the parent group's profits and CA's limited
presence in central and eastern Europe (CEE). The Stable Outlooks on EFL's
Long-Term IDR and National Long-Term Rating reflect that on the parent.
CA's commitment to the Polish market has been evidenced by its long-term
ownership of EFL and the recent increased investments in its Polish bank
subsidiary, Credit Agricole Bank Polska. EFL plays a vital role in CA's
expansion in the Polish banking sector through providing significant cross-sell
opportunities based on its fairly large SME customer base.
EFL's integration with the parent is strong on both operational (including risk
management) and funding levels. At end-April 2014, CASA provided 35% of EFL's
total non-equity funding directly and issued guarantees on bank loans comprising
a further 35%. Despite the reliance on the parent for funding, EFL's wholesale
funding sources were reasonably diversified between loans from international
financial institutions (35% of total funding) and from commercial banks (14%)
and bonds issued (16%). Rollover risk from bonds is mitigated by liquidity
support from CASA.
RATING SENSITIVITIES - IDRS, NATIONAL RATINGS AND SUPPORT RATING
EFL's IDRs, National Long-Term and Support Rating would be downgraded if CA's
Long-Term IDR is downgraded (but unlikely given the Stable Outlook) or if the
parent's commitment to the Polish market weakens.
EFL has been the leader in the Polish leasing market since the early 1990s, with
a 8.9% market share (based on total assets financed) at end-1Q14. The company
mainly offers finance leasing to SMEs, with a strong presence in the vehicle
The rating actions are as follows:
Long-term IDR: affirmed at 'A-'; Outlook Stable
Short-term IDR: affirmed at 'F1'
National Long-Term Rating: affirmed at 'AA(pol)'; Outlook Stable
National Short-Term Rating: affirmed at 'F1+(pol)'
Support Rating: affirmed at '1'