Erste Group Bank AG

Strong franchise in Austria and Central and Eastern European (CEE) countries. Stable operating revenues from traditional customer-led retail and commercial banking operations. Strong liquidity and funding profile dominated by granular retail deposits. Sensitivity to economic and political developments in the CEE region. Moderate reliance on wholesale funding. The positive outlook on Erste Group Bank AG (Erste) reflects S&P Global Ratings' view that, over the next two years, the group will continue to strengthen its risk-adjusted capitalization, partly supported by the issuance of further hybrid capital instruments. We expect that the operating environment in Erste's biggest core markets will remain stable, facilitating the generation of sound earnings in its traditional customer-led retail and corporate customer business. We could raise our ratings

...The positive outlook on Erste Group Bank AG (Erste) reflects S&P Global Ratings' view that, over the next two years, the group will continue to strengthen its risk-adjusted capitalization, partly supported by the issuance of further hybrid capital instruments. We expect that the operating environment in Erste's biggest core markets will remain stable, facilitating the generation of sound earnings in its traditional customer-led retail and corporate customer business. We could raise our ratings by one notch, if Erste were to continue strengthening its risk-adjusted capital (RAC) ratio or if there was greater insight into the pace and size of its buildup of bail-in-able capital buffers. Such improvement could lead to a better capital assessment, if the RAC ratio were to increase and remain higher than 10% or to an uplift based on additional loss-absorbing capacity (ALAC) if the buffer strengthened sufficiently. An upgrade would, however, hinge on our view of the group's creditworthiness as...

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