Fitch Ratings: State support to agriculture benefits Kazakh TechnoLeasing's asset quality
Baku, Azerbaijan, Oct. 31
By Rashid Shirinov – Trend:
State support to the agricultural industry benefits Kazakh TechnoLeasing company's asset quality, Fitch Ratings said in a message.
TechnoLeasing is a small, private, niche leasing company operating solely in Kazakhstan, focused on leasing of agricultural equipment. Its lease book is concentrated by lessees and industries.
“Funding is also concentrated, with significant reliance on Tsesnabank, which is TechnoLeasing's main funding source, comprising 57 percent of total borrowings and guaranteeing the majority of the remaining 43 percent,” the message reads.
Fitch Ratings has assigned TechnoLeasing a Long-Term Issuer Default Rating (IDR) of 'B-' and National Long Term Rating of 'B+(kaz)'. The Outlooks are Stable.
“TechnoLeasing's ratings are constrained by its concentrated business model, small franchise and high refinancing risk. The ratings are underpinned by the company's financial metrics and moderate leverage, both of which Fitch views as rating strengths,” the rating agency noted.
The message also says that TechnoLeasing's historical performance has been volatile across years but on average quite strong, helped by wide net interest margins, good efficiency and low credit losses.
“Return on average equity fluctuated around 20 percent in 2016-first half of 2018 (from 9 to 31 percent), while the lease yield was more stable, allowing for a lucrative net margin.