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S&P revises outlook on Zagrebačka Banka, citing receding economic risks

S&P Global Ratings revised the outlook on Zagrebacka Banka d.d. to stable from negative Dec. 21 and affirmed the lender's long-term counterparty credit rating at BB, which is capped at the level of the agency's foreign-currency rating on Croatia.

The outlook revision reflects a similar ratings action on Croatia as well as the rating agency's view of improving operating conditions for banks in the country as a result of the continued economic recovery and gradual fiscal consolidation.

S&P revised its economic risk assessment for Croatian banks to 7 from 8 under its banking industry country risk assessment methodology, which uses a 1 (lowest risk) to 10 (highest risk) scale. It also moved Croatia into Banking Industry Country Risk Assessment group 7 from group 8. The agency said this results in an anchor of "bb," compared to "bb-" previously. The anchor is the starting point for assigning an issuer credit rating.

S&P's assessment of Zagrebacka Banka's stand-alone credit profile was also revised upward to "bb+" from "bb" due to the higher anchor.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.