S&P cuts Zagrebacka Banka

Standard & Poor's said it lowered Zagrebacka Banka's long-term counterparty credit rating to BBB- from BBB.

The outlook is negative.

The rating action follows the downgrade of the Republic of Croatia's foreign and local currency ratings to BBB- and A-3 on Dec. 21.

The ratings reflects the bank's leading domestic customer franchise, stable and diversified funding base, sound capitalization, good efficiency, strategic importance to its majority owner UniCredit SpA and benefits derived from the banking group's expertise and technology in core business areas, S&P said.

The ratings are constrained by the continuing economic recession in Croatia, the agency said.

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