...Support-Driven IDRs: Zagrebacka Banka d.d.'s (ZABA) Issuer Default Ratings (IDRs) and Support Rating are based on potential support from its parent, UniCredit S.p.A. (UC; BBB+/ Negative). Fitch Ratings believes that UC has a strong propensity to support ZABA given the strategic importance of the Croatian subsidiary and central and eastern Europe (CEE) for UC. ZABA's relatively small size means potential support should be manageable for UC. 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. The Stable Outlook on ZABA's Long-Term IDR reflects that on the Croatian sovereign. Operating Environment Weighs on VR: ZABA's Viability Rating (VR) reflects its high correlation with the sovereign risk and the still difficult operating environment resulting in high impaired loans and earnings pressure. The VR also reflects ZABA's strong market franchise, funding and...
