This report does not constitute a rating action. ALAC--Additional loss-absorbing capacity. CRA--Comparable ratings analysis. GRE--Government-related entity. ICR--Issuer credit rating. SACP--Stand-alone credit profile. Overview Key strengths Key risks Sound retail banking franchise in the small Canton of Glarus. Concentration risk from focus on residential mortgage lending in Glarus and neighboring cantons. Very strong and sustainably high capitalization. Weaker cost efficiency and risk-adjusted profitability than most rated peers. Extremely high likelihood of receiving extraordinary government support from the canton, if needed. Tighter refinancing conditions necessitate a rebalancing of its funding model. Our'AA/A-1+'long- and short-term ratings on Glarner Kantonalbank (GLKB) benefit considerably from our view of extremely high likelihood of extraordinary government support from the Canton of Glarus. The uplift for
