OREANDA-NEWS. July 07, 2015. Fitch Ratings has revised Poland-based Europejski Fundusz Leasingowy S.A.'s (EFL) Outlook to Positive from Stable, while affirming its Long-term Issuer Default Rating (IDR) at 'A-' and its National Long-term Rating at 'AA(pol)'. A full list of rating actions is available at the end of this rating action commentary.

The rating actions follow the revision of the Outlook to Positive of EFL's 100% owner, Credit Agricole S.A. (CASA; A/Positive), the central body of Credit Agricole (CA; A/Positive). See 'Fitch Revises Credit Agricole's Outlook to Positive; Affirms at 'A' dated 23 June 2015 on www.fitchratings.com.

KEY RATING DRIVERS
The Positive Outlook on EFL's Long-term IDR reflects that on CA. The company's ratings are underpinned by Fitch's view of an extremely high probability of support from CA, in case of need.

This view is based on CA's commitment to the Polish market, as evidenced by its long-term ownership of EFL, the group's expansion in the domestic banking sector through its subsidiary bank, Credit Agricole Bank Polska (CABP), and substantial funding provision to EFL. EFL provides CABP with cross-sell opportunities with its fairly large SME customer base. In addition, close operational integration with and supervision by CA, including EFL's partial rebranding, underpin the narrow notching between CA's and EFL's IDRs.

At the same time, Fitch views EFL as having only moderate strategic importance to CA due to its modest contribution to the group's profits and CA's limited presence in central and eastern Europe.

EFL is highly reliant on the parent for funding. At end-1Q15, CASA provided 61% of the subsidiary's total funding either directly (29%) or through guarantees on loans from international financial institutions (IFIs; 32%). Still, the company's wholesale funding sources are reasonably diversified between loans from IFIs and loans from commercial banks (26%) and bonds issued (13%). Rollover risk from bonds is mitigated by liquidity support available from CASA.]

RATING SENSITIVITIES
EFL's Long-term IDR and National Long-term Rating would likely be upgraded if the parent is upgraded. The company's ratings could be downgraded if CA's commitment to the Polish market weakens although Fitch views this as unlikely.

The rating actions are as follows:

Long-term IDR: affirmed at 'A-'; Outlook revised to Positive from Stable
Short-term IDR: affirmed at 'F1'
National Long-term Rating: affirmed at 'AA(pol)'; Outlook revised to Positive from Stable
National Short-term Rating: affirmed at 'F1+(pol)'
Support Rating: affirmed at '1'