Important role for, and very strong link with, the State of Upper Austria, the bank's 51% owner. Low-risk business model and strong capitalization. Very low operating profitability that is further strained by challenging operating conditions because of COVID-19. Concentration in the loan portfolio on one region, with a focus on public-sector-related lending and the promotion of subsidized housing. S&P Global Ratings' negative outlook on Austria-based Oberoesterreichische Landesbank AG (Hypo OÖ) reflects our view of potential increasing pressure on the group's profitability and asset quality due to the economic and credit distress stemming from the pandemic. We could lower our ratings within the next 12-24 months if we saw the risks to the Austrian banking sector significantly increasing or if we
