S&P lowers Zagrebacka outlook to negative

Standard & Poor's said it revised its outlook on Zagrebacka banka dd to negative from stable.

At the same time, the agency said it affirmed its BBB long-term counterparty credit rating on the bank.

The outlook revision follows yesterday's similar rating action on the Republic of Croatia (foreign currency, BBB/negative/A-3; local currency, BBB+/negative/A-2), S&P said, noting that the rating action on the sovereign reflects the risks Croatia faces in financing high external imbalances in the present difficult international environment.

According to the agency, the long-term rating on Zagrebacka benefits from three notches of uplift above the bank's stand-alone creditworthiness reflecting its strategic importance to and ongoing support from its majority owner, UniCredit SpA (A+/negative/A-1).

However, the agency said it caps that uplift at one notch, at the level of the foreign currency rating on Croatia.

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