Fitch Ratings has affirmed JSC TBC Leasing's (TBCL) Long-Term Issuer Default Rating (IDR) at 'BB-', with a Stable Outlook. A full list of rating actions is below.
TBCL operates solely in Georgia, its domestic market, and is the market leader in leasing. The company mainly provides financial leasing to the corporate clients of TBC Bank (BB-/Stable/bb-) as well as to SMEs, microbusinesses and individuals.
TBCL's IDRs are driven by expectations of support from TBC Bank. The Stable Outlook mirrors that on the parent. Fitch's view of a high probability of support is based on the high reputational risk from a subsidiary default for TBC Bank, as this would significantly damage its reputation with its key wholesale lenders.
Fitch's view is also underpinned by full ownership, close integration with and a record of capital and funding support from TBC Bank. To support TBCL's growth, the parent has injected new equity on several occasions (most recently in December 2019) and has already approved additional available capital of GEL2.5 million, to be disbursed based on TBCL's needs. TBC Bank provides TBCL with subordinated and senior loans as well as letters of support to enable third-party borrowing. It also facilitates TBCL's bond placements.
TBCL operates solely in Georgia, and is the market leader in leasing. TBCL's clients are often higher-risk than those of TBC Bank (the impaired exposures ratio, including both leases and other financial assets, slightly decreased in 9M21 from a peak of 24% at end-2020), but this is partly mitigated by access to liquid collateral and from the adequate pricing of risk. TBCL aligns its strategy and risk policies with those of the parent, although TBCL's management is independent in its operational decisions.
