The ratings on Banque Cantonale Vaudoise (BCV) are based on the bank's overall stable financial performance. BCV's operating profile is mainly characterized by a generally well-diversified earnings stream and good cost control, which have provided for consistent growth in profitability despite the weight of continued provisioning efforts. The bank's asset quality remains pressured by the legacy of its consolidation with weaker regional banks undertaken in the early 1990s--notably the 1993 absorption of Banque Vaudoise de Crédit--as a result of the sustained weakness of the Swiss economy. As BCV did not receive support from its majority shareholder, the Canton of Vaud, during this period of consolidation, improvement in asset quality has been only gradual and commensurate with the bank's ability to
