Research Update: Austria-Based Hypo Tirol Bank Upgraded To 'A+/A-1' On Sustainably Strong Capitalization; Outlook Stable

Hypo Tirol Bank's capitalization has strengthened significantly in recent years, thanks to its prudent approach to building capital while de-risking its balance sheet. The bank's risk-adjusted capital (RAC) ratio is among the highest of rated Austrian banks, estimated at 18.2% as of Dec. 31, 2022. Following an upward revision of Hypo Tirol's RAC forecasts for the next 12-24 months, we expect strong capital buffers to support the bank's 'bbb+' stand-alone credit profile (SACP) in line with that of other Austrian Hypo banks. We therefore raised our long-term issuer credit rating on Hypo Tirol to 'A+' from 'A' and affirmed the 'A-1' short-term rating. The stable outlook reflects our view that Hypo Tirol will maintain its RAC ratio well above 15%

...- Hypo Tirol Bank's capitalization has strengthened significantly in recent years, thanks to its prudent approach to building capital while de-risking its balance sheet. - The bank's risk-adjusted capital (RAC) ratio is among the highest of rated Austrian banks, estimated at 18.2% as of Dec. 31, 2022. - Following an upward revision of Hypo Tirol's RAC forecasts for the next 12-24 months, we expect strong capital buffers to support the bank's '###+' stand-alone credit profile (SACP) in line with that of other Austrian Hypo banks. - We therefore raised our long-term issuer credit rating on Hypo Tirol to 'A+' from 'A' and affirmed the 'A-1' short-term rating. - The stable outlook reflects our view that Hypo Tirol will maintain its RAC ratio well above 15% in the next 12-24 months, as well as our expectation that the bank's profitability and asset quality indicators will remain sound despite economic uncertainties and tighter funding conditions....

Research Update