By The Nation
The rating reflects TISCO’s creditworthiness as a non-operating holding company of TISCO Group, whose main operating asset is TISCO Bank PLC (TISCOB) through a 99.99 per cent equity stake, and the stable stream of dividends it receives from TISCOB.
The rating also reflects diverse sources of income, stable franchise in auto lending, and strong capital and earnings. These strengths, however, are constrained by relatively modest banking operations, and a moderately high reliance on wholesale funding.
A non-operating financial holding company (NOHC)
TISCO’s company rating is one notch lower than that of its core bank subsidiary, TISCOB (rated “A/Stable” by TRIS Rating). This difference reflects the structural subordination of TISCO’s obligations to those of TISCOB, TISCO’s dependence on dividends from TISCOB, and the risk of regulatory barriers surrounding payment of dividends from TISCOB.