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Fitch Ratings upgrades Zagrebacka Banka d.d.'s VR to 'bb+'.

Warsaw: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, has upgraded Zagrebacka Banka d.d.'s (ZABA) Viability Rating (VR) to 'bb+' from 'bb'.

It affirmed ZABA's Long-Term Issuer Default Rating (IDR) at 'BBB-', Short-Term IDR at 'F3' and Support Rating (SR) at '2'. The Outlook on the Long-Term IDR is Stable. The upgrade of the bank's VR follows Fitch's upgrade of the Long-Term IDR of the Croatian sovereign to 'BB+' from 'BB' (see ' Fitch Upgrades Croatia to 'BB+'; Outlook Stable' at

The upgrade of ZABA's VR to 'bb+' from 'bb' is driven by what Fitch assesses to be an improvement of Croatia's operating environment and, in particular, of the sovereign credit risk profile. Fitch sees a high correlation between the sovereign's and the bank's credit profiles, in particular given ZABA's high direct exposure to the sovereign. The VR continues to factor in the bank's large, albeit declining, volume of impaired loans and volatile through-the-cycle performance. The rating is underpinned by ZABA's sizeable capital buffers and potential capital support from the parent, the bank's comfortable funding and liquidity position and leading domestic market franchise.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Apr 3, 2018
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