Supportive and committed foreign strategic ownership; Strong retail banking franchise; Outstanding liquidity and funding; and Healthy financial profile. Higher than average economic and industry risks pertaining to the Czech banking system; Tough challenges to grow and maintain good levels of sustainable revenues; and High cost structure. The ratings on Czech Republic-based Ceska Sporitelna a.s. (CS) reflect the bank's strong strategically important status within Austria-based Erste Bank der oesterreichischen Sparkassen AG (Erste Bank; --/--/A-2), which increased its ownership in the bank to 97.9% in 2003; its strong position in the Czech retail banking market, which provides it with outstanding liquidity; and its improved financial profile--including satisfactory profitability and capital, together with good asset quality. Constraining factors include higher-than-average, but improving, economic
