Strong market position in Austria and several Central and Eastern European (CEE) countries. Stable operating revenues from traditional customer-led retail and commercial banking operations. Dominance of granular retail deposits in the funding structure, with only moderate reliance on wholesale funding. Sensitivity to developments in the CEE region. Still high levels of nonperforming loans, stemming from exposures to riskier CEE countries. Comparably moderate capital levels. Standard&Poor's Ratings Services' negative outlook on Erste Group Bank AG (Erste) reflects the risk that Erste's internal capital generation could prove to be slower than we anticipate, with its risk-adjusted capital (RAC) ratio remaining below 7% over the next two years. It also reflects the risk that the bank does not accumulate a hybrid
