Strong capitalization. Important role for and very strong link with the State of Upper Austria, the bank's 51% owner. A highly collateralized, low-risk business model. 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 in one region and in public-sector-related activities. Operational dependence on a shareholder, Raiffeisenlandesbank Oberösterreich. S&P Global Ratings' negative outlook on Oberoesterreichische Landesbank AG (HYPO OÖ) reflects that on Upper Austria and captures the one-in-three likelihood that if Upper Austria is downgraded within the next two years, this would most likely result in a similar rating action on Hypo OÖ. Likewise, we could lower the ratings if we observed
