Fitch affirms Zagrebacka

Fitch Ratings said it affirmed Zagrebacka Banka's long-term issuer default rating at BBB+, short-term issuer default rating at F2, support rating at 2 and individual rating at C/D.

The outlook is stable.

The agency said Zagrebacka's profitability is sound and driven by rapid loan growth and growing fee and commission income; the bank earns a relatively healthy proportion of revenues from fees compared with its peers, mostly on payment and credit card business; and its cost-to-income ratio has improved rapidly, reflecting Zagrebacka's extensive retail network.

However, loan growth is expected to slow to the maximum 12% per year allowed by punitive central bank measures introduced this year, Fitch said, in addition to the stringent reserve requirements already introduced that make financing the loan book more expensive.

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