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 could reduce needs to build up higher additional loss-absorbing capital (ALAC) buffers. The positive outlook on Austria-based Erste Group Bank AG reflects S&P Global Ratings' view that, over the next two years, the group will continue to strengthen its risk-adjusted capitalization, possibly supported by the issuance of further hybrid capital instruments. We expect that the operating environment in Erste's biggest core markets might soften but still remain relatively benign, facilitating the generation of
