Raiffeisen Bank International AG

The negative outlook reflects our view that RBG faces downside risks in the coming 12-24 months, mainly reflecting challenges to the operating environment in its main foreign markets and the complexity of the overall group's structure, which, in our view, results in material challenges to improve efficiency and profitability of domestic operations. We could lower our rating on RBI within the next 12-24 months if the operating environment gets worse or if the downturn lasts longer than we expect, leading to a more material setback to RBG's profitability and asset quality, in particular, if the bank were to post higher losses or we observe increased asset-quality problems in one of its main operating markets. Pronounced credit losses and weaker earnings

...We expect RBI to remain core for RBG's strategy. Our ratings are based on RBG's aggregate creditworthiness (group credit profile; GCP) including its cohesiveness and expected member banks' support in case of need, and our expectation that RBI as its central institution will remain a core strategic member for the foreseeable future. We forecast the group will continue to demonstrate relatively good resilience in the next two years, but risk-adjusted profitability lags peers. RBG benefits from key business strengths: from its local Austrian Raiffeisen banks' superior domestic retail franchises, RBI's strong competitive position in corporate business in Austria, and in retail and corporate business in CEE, SEE, and Russia. RBG reported solid results in the past 12 months, and we expect that it will continue to manage the difficult operating conditions relatively well amid the COVID-19 pandemic in the main markets where it operates. We anticipate RBG's earnings, asset quality, and capitalization...

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