Fitch affirms Nova Ljubljanksa Banka

Fitch Ratings said it affirmed Nova Ljubljanska Banka's long-term issuer default rating at A-, along with

its short-term issuer default rating at F2 and guaranteed notes at AA. The agency also said it affirmed its fully owned subsidiary LHB Internationale Handelsbank AG's long-term issuer default rating at BBB- and short-term issuer default rating at F3.

The outlook is stable.

Compared with several local competitors, the group's asset quality has proved far less resilient, Fitch said, and the deterioration has exceeded expectations.

The agency also noted some loan book concentration, which could result in volatile performance, as well as exposure to the troubled construction sector and to financial holding companies.

On a more positive note, Fitch said it considers the bank's domestic franchise, which includes a large and stable retail deposit base, to be strong.

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