In its latest report , Fitch Ratings has affirmed the National Ratings of eight Tunisian leasing and factoring companies and upgraded the National Long-Term (LT) Rating of Enda Tamweel SA (Enda) to ‘BBB(tun)’/Stable from ‘BBB-(tun)’/Stable.
The rating actions follow the completion of a peer review of nine Tunisian non-bank financial institutions (NBFIs). These are seven leasing companies: BTK Leasing (BTKL), Arab Tunisian Lease (ATL), Attijari Leasing (AL), Compagnie Internationale de Leasing (CIL), Hannibal Lease SA (Hannibal), BH Leasing (BHL) and Tunisie Leasing et Factoring (TLF), as well as one factoring company, Union De Factoring (Unifactor; UF) and a microfinance company, Enda.
The upgrade of Enda principally reflects Enda’s stronger and resilient business profile which is in our view less negatively affected by the continued challenging Tunisian operating environment when compared to leasing and factoring peers.
NATIONAL RATINGS AND SENIOR DEBT
The National Ratings of BTKL, CIL, Hannibal, TLF, Enda and UF are driven by their standalone creditworthiness. AL, ATL and BHL’s ratings are support-driven, based on support from institutional shareholders.
The sector’s average impaired and non-performing loans (NPL) ratio has been reducing, and now stands at 12% as at end-1H23, compared with the 2019-2022 average of 12.1%. The ratio is expected to decline further as most companies have begun to write-off NPLs to meet the Central Bank of Tunisia’s (CBT) new requirement that banks, and other finance companies bring their NPL ratio down to below 7% by 2026 (including off-balance sheet commitments following the CBT’s methodology).
Fitch added that “A slowdown in banking system deposit growth, or an increase in funding requirement from the Tunisian state, could trigger liquidity pressures. Moreover, loans from international development agencies have become scarce given the high currency hedging costs and macro-economic challenges”.
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