The ratings on Banque Cantonale Vaudoise (BCV) reflect the capital increase, completed at the end of February 2003, which will provide the bank with the additional capital resources necessary to pursue its activities on a sound basis. The Canton of Vaud's (A/Stable/--) sustained commitment to provide capital support to BCV, as evidenced by this most recent support and a prior capital injection in 2001, is a key factor supporting the ratings on BCV. The ratings also reflect improvement in the bank's overall asset quality following a provisioning effort undertaken at year-end 2001, and complemented in 2002. As this effort is expected to substantially reduce the impact of provision charges on net income levels, the bank's bottom-line profitability should also be
