March 29 (SeeNews) - Croatia's central bank governor Boris Vujcic said on Wednesday the banking system is strong enough to withstand any outcome of the financial turmoil at the country's heavily indebted food and retail concern Agrokor, local media reported.
A stress test has shown that the banking system will remain stable due to its high capital adequacy despite the situation in Agrokor, Hina news agency quoted Vujcic as saying.
"The capital adequacy rate of Croatian banks is 23% and that is what makes the banking system stable", he noted.
Agrokor's financial issues became apparent earlier this year when Moody's downgraded it's corporate family rating (CFR) to B3 from B2. The company then pulled out of a syndicated loan deal it had struck with several international lenders, which sent the price of its bonds on international markets into a downward spiral.
Since then, there has been talk of Russian creditor banks, including Sberbank, acquiring a stake in Agrokor and launching an overhaul. Agrokor has neither denied nor confirmed those reports but it has announced it is working on a new business model to save the company.
The government said earlier it is in the final stages of drafting a bill to aid debt-laden companies important for the country's economy, which many have speculated is being prepared with the aim of addressing the financial difficulties of Agrokor.
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