High likelihood of receiving government support--if ever needed--from its owner the Austrian State of Vorarlberg (AA+/Stable/A-1+). Solid market share with corporate and retail clients in Vorarlberg. Sound funding profile and liquidity management, backed by implicit support from the government of Vorarlberg. Mediocre return on equity (ROE) by international standards, further pressured by the pandemic, a lower-for-even-longer interest-rate environment, and the highly competitive banking market in Austria. Geographical concentration risk, which makes the bank vulnerable to cyclical downturns in the regional economy. The negative outlook on Austria-based Hypo Vorarlberg Bank AG reflects S&P Global Ratings' view of downside risks that the bank faces in the coming 12-24 months. This includes our opinion that economic risk for the Austrian banking system could
