Fitch upgrades AMW Capital Leasing to ‘BBB+(lka)’

Fitch Ratings has upgraded AMW Capital Leasing and Finance PLC’s (AMWCL) National Long-Term Rating to ‘BBB+(lka)’ from ‘BBB(lka)’, with a Stable Outlook.

The upgrade reflects Fitch’s view that the credit profile of AMWCL’s parent, Associated Motorways (Private) Limited (AMW), has improved following the resumption of vehicle imports in early 2025 after a five-year hiatus.

“While rising financing costs and stricter lending and import rules may weigh on AMW’s sales, we expect its operating scale to remain above the levels seen when vehicle imports were barred, supporting the provision of extraordinary support to AMWCL if required,” Fitch said.

AMWCL’s rating is driven by Fitch’s expectation of support from AMW, taking into account AMW’s 90% ownership, shared branding and strategic integration with the subsidiary.

The resumption of vehicle imports by AMW has also strengthened synergies with AMWCL, reflected in an increasing share of captive financing, which is approaching pre-ban levels.

AMWCL’s non-performing loan ratio improved in the first quarter of 2026, compared with 7.4% in 2025 and 11.9% in 2024, supported by focused recoveries and robust loan growth. However, the ratio remains above the sector average of 4.4%.

Pre-tax profit to average assets declined to 3.7% in the first quarter of 2026 from 4.9% in 2025, as the benefit to earnings from impairment reversals moderated.

Fitch said AMWCL’s funding flexibility is also weaker than that of similarly rated peers due to its higher reliance on secured funding.

“We expect asset quality and profitability to weaken over the medium term as its loan book seasons,” Fitch said.