Hypo Vorarlberg Bank AG

Strong market share with corporate and retail clients in the Austrian state of Vorarlberg. Strong capitalization and low cost of risk. Comfortable funding and liquidity profile, backed by implicit support from Vorarlberg. Low income margins due to low-yield environment and highly competitive banking market in Austria. Lack of geographical diversification, which makes the bank vulnerable to cyclical downturns. The stable outlook reflects S&P Global Ratings' expectation that Austria-based Hypo Vorarlberg Bank AG will maintain its current business and financial risk profile, and continue to benefit from extraordinary government support from its federal state owner over the next two years. Because we regard the bank as a government-related entity (GRE), the ratings on the bank also depend on our view of

...Outlook: Stable The stable outlook reflects S&P Global Ratings' expectation that Austria-based Hypo Vorarlberg Bank AG will maintain its current business and financial risk profile, and continue to benefit from extraordinary government support from its federal state owner over the next two years. Because we regard the bank as a government-related entity (GRE), the ratings on the bank also depend on our view of the State of Vorarlberg's creditworthiness. The rating on Vorarlberg (##+/Stable/A1-+) would need to drop by one notch to trigger a negative rating action on the bank, assuming all bank-specific factors remain unchanged. An upgrade of Vorarlberg would not directly affect the rating on the bank....

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