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. Table 1 Overview Key strengths Key risks Very strong risk-adjusted capitalization (RAC), underpinned by Hypo?s mutual status. A narrow business model as a pure residential mortgage financer. Strong asset quality and an exceptional decades-long loan-loss track record. Real estate concentration in the lending book, entailing cyclical risk. Very conservative lending and underwriting standards with a focus on urban growth centers. Less stable deposit base and higher share of wholesale funding than domestic peers. Hypo?s conservative and selective underwriting standards and focus on collateralized residential mortgage lending in growing urban regions in Finland leads to continued robust asset quality.
