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 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 could

...S&P Global Ratings considers Glarner Kantonalbank (GLKB) as having a somewhat weaker franchise than many other Swiss cantonal banks. This stems from the bank's focus on expanding its loan book outside its home canton. In our view, expansion would result in a more price-sensitive and less stable customer base. Nevertheless, the bank has demonstrated resilience during the past years despite a volatile operating environment. GLKB has not been adversely affected by the banking market turmoil in March 2023. While investor sentiment and funding conditions took a hit during the Credit Suisse-related stress, we have not seen knock-on effects to GLKB, which continued its business activities as usual. We expect GLKB's business model to continue, with strong roots in the Canton of Glarus and complementary business activities through online mortgages in German-speaking Switzerland. The bank is currently implementing its "Fokus 2026" strategy that does not materially deviate from its previous strategy....

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