Glarner Kantonalbank

The stable outlook reflects our view that GLKB would receive extraordinary support from its majority owner, the Canton of Glarus, if needed. Consequently, the likelihood of a downgrade is remote over the next two years because, in the event of a moderate deterioration of the bank's creditworthiness, we would include additional support from the canton into our ratings, assuming all else remained equal. We could lower the rating if we concluded that GLKB's ties with Glarus had loosened, or if renewed attempts to change the cantonal bank law emerged. However, we consider this scenario unlikely after the people in Glarus voted against the government's proposal to change the cantonal bank law in May 2022. In addition, a negative rating action

...S&P Global Ratings considers Glarner Kantonalbank (GLKB) as having a somewhat weaker franchise than other cantonal banks in Switzerland and peers in European markets with a similar industry risk profile, such as Austria and Finland. This stems from its focus on expanding its loan book outside its home canton. In our view, this results in a more price-sensitive and less stable customer base. Nevertheless, the bank has demonstrated resilience during three challenging years since the pandemic's beginning in March 2020. GLKB has no direct loan or securities exposures affected by the Russia-Ukraine conflict. Therefore, we don't expect immediate repercussions in terms of business volumes or asset quality....

Full Report