Ceska Sporitelna, a.s.

The stable outlook reflects our expectation that Ceska will maintain a solid balance sheet and financial performance, with sound profitability and asset quality ratios over the next 12-24 months. We also think the bank will adhere to its capital strategy, dividend payout ratio, and issuance plans, thereby maintaining strong capital ratios and ALAC buffers. We could lower the rating over the next 12-24 months if Ceska's asset quality deteriorates beyond our baseline expectations, leading to higher credit losses and a setback to profitability. In our view, an unexpected change in existing sound underwriting standards could lead us to revisit our assessment. Furthermore, we might lower our rating on Ceska if the bank deviates from its existing funding plan, falling short

...Ceska Sporitelna's (Ceska) 2024 full-year financial performance outperformed our projections. The bank reported strong net profits in 2024, rising 41% from 2023, with unchanged, sound asset quality, as indicated by a nonperforming loan ratio of 1.8% and the release of loan loss provisions at negative 2 basis points (bps). Low unemployment in the Czech Republic and strong corporate balance sheets have helped keep Ceska's retail and corporate portfolio resilient. Despite lower interest rates in the country, the bank reported a higher net interest margin of 2.03% in 2024, compared to 1.95% in 2023, because of lower funding costs and a favorable loan portfolio position. Fee and commission income reached a record high in 2024, driven by pent-up demand for asset management services, particularly securities...

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