(The following statement was released by the rating agency)

Aug 03 - Fitch Ratings has affirmed Compagnie Internationale de Leasing's (CIL) National Long-term rating at 'BBB-(tun)' and Short-term rating at 'F3(tun)'. The Outlook on the National Long-term rating is Stable. A full list of rating actions is at the end of this comment.

RATING DRIVERS

CIL's National Ratings reflect deteriorated asset quality, and tighter liquidity compared to some of its peers. However, they also factor in its adequate profitability and a stabilised but modest Tier 1 ratio.

Fitch expects CIL's operating environment to remain difficult in 2012, given continuing economic pressures in Tunisia, which are affecting all leasing companies' asset quality and liquidity. The Tunisian financial sector continued to face significant strain on liquidity in H112 due to disrupted activity in major economic sectors.

Fitch believes that CIL's asset quality will remain under pressure in 2012, given its large stock of restructured loans (classified as performing at end-2011 and accounting for 9% of CIL's loan book) and high obligor concentration in its loan portfolio. CIL's asset quality indicators remain poor, albeit in line with its main peers. Impaired loans stabilised compared to end-2010 (which included post-closing impaired loans subsequent to the Q111 political unrest), and accounted for 7% of gross loans at end-2011. Material loan loss provisioning efforts resulted in unreserved impaired loans representing a moderate 10% of equity at end-2011, which compares favourably with peers.

According to Fitch, CIL's profitability in 2012 will largely rely on CIL's capacity to continue monitoring recoveries efficiently, particularly for restructured loans.

CIL does not benefit from the backing of a bank shareholder and is highly dependent on wholesale markets. In addition, its contingency funding is thin. However, lower lending activity in 2011 (which reduced financing needs), the successful issuance of a TND20m (or USD13m) five-year bond in Q112 and new committed bank credit lines to be drawn in Q312 are contributing to reduce liquidity stress at CIL.

CIL's equity base remains modest in absolute and in relative terms (with a Tier 1 ratio of 13% at end-2011) in view of its credit risk profile and compares unfavourably with some of its peers.

RATING SENSITIVITY

The ratings could come under downward pressure in case of material liquidity stress or severe deterioration of asset quality. Conversely, upside potential for ratings could result from more comfortable funding and capitalisation, and stronger asset quality.

The rating actions are as follows:

National Long-term rating: affirmed at 'BBB-(tun)'; Stable Outlook

National Short-term rating: affirmed at 'F3(tun)'

National Senior unsecured debt rating: affirmed at 'BBB-(tun)'

National Subordinated debt rating: affirmed at 'BB-(tun)'

((Bangalore Ratings Team, Hotline: +91 80 4135 5898 satish.kb@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: satish.kb.thomsonreuters.com@reuters.net))