Strong capitalization. Important role for and very strong link with the State of Upper Austria. A highly collateralized and granular public-sector-related real estate lending business. Comparatively low operating profitability, reflecting tight margins in Austria along with the bank's focus on public-sector related lending and promotion of subsidized housing. Concentrations in the loan portfolio on one region and on public-sector customers. S&P Global Ratings' positive outlook on Oberoesterreichische Landesbank AG (HYPO OÖ), based in the State of Upper Austria, reflects our expectation that the bank's capitalization could improve on stronger earnings retention in the next two years. The outlook also incorporates our expectation that Upper Austria will remain highly supportive of HYPO OÖ. We would upgrade HYPO OÖ if its capitalization
