A thorough and comprehensive assessment confirmed Zagrebačka banka’s resilience to the stressful macroeconomic scenario thanks to the strong capital position of the Bank.
The European Central Bank (ECB) has published the results of a comprehensive assessment of five Croatian banks, including Zagrebačka banka. The assessment included an asset quality review (AQR) and testing the institution’s resilience to stress, and was implemented after Croatia submitted a request in May 2019 for the establishment of close cooperation between the ECB and the Croatian National Bank.
The comprehensive assessment was part of the process of establishing close cooperation between the ECB and the national competent authority of an EU Member State whose currency is not the Euro.
A thorough and comprehensive assessment confirmed Zagrebačka banka’s resilience to the stressful macroeconomic scenario thanks to the strong capital position of the Bank, i.e. the maintained rate of regular share capital (CET1) of 21.28%, as of June 2019. Applying the methodology of the ECB, following a quality review assets and stress testing, the CET 1 capital ratio is 20.46% in the baseline scenario and 13.94% in the stress scenario.
The asset quality assessment in the comprehensive assessment confirmed the strength of the balance sheet and good risk management of Zagrebačka banka.
Strong results of Zagrebačka banka showed that there are no regulatory requirements for capital measures.
It’s important to note that the assumptions used for the stress test scenarios could not take into account the current COVID-19 crisis, which only started to evolve in the first quarter of 2020. The ECB is currently working on a consistent approach for all supervised entities in order to monitor the impact of the COVID-19 crisis. The same approach will be followed for Croatian banks should close cooperation with Croatia begin.