...IDRs Driven by Parental Support: Zagrebacka Banka d.d.'s (ZABA) Issuer Long- and Short- Term IDRs and Support Rating are based on the potential support available from its ultimate parent, UniCredit S.p.A. (UC; BBB+/Negative). Fitch Ratings believes that UC has a strong propensity to support its Croatian subsidiary given the importance of the central and eastern Europe (CEE) region to its strategy, as well as the significant operational integration of the subsidiary, and negative implications of its default for the group. Country Ceiling Constraint: Fitch would rate ZABA one notch below UC's Long-Term IDR, if not for the cap from Croatia's Country Ceiling (BBB-) reflecting transfer and convertibility risks. Operating Environment Weighs on VR: The high correlation between the Croatian sovereign rating and ZABA's credit profile stems from the bank's high direct credit exposure to the sovereign (equal to around 28% of total assets and 210% of Fitch Core Capital (FCC) at end- 3Q15), the broader...
