Hypo Tirol Bank's asset quality has improved beyond our base-case expectations, owing to its repositioning and management's ongoing efforts to de-risk and downsize the bank. We think this will translate into improved business stability and likely balance sheet strengthening, and we expect efficiency gains from cost-cutting measures by 2020, which will improve the bank's earnings generation and capital accrual. We are raising our long-term issuer credit rating on Hypo Tirol to 'A-' from 'BBB+' and affirming our 'A-2' short-term rating. The stable outlook reflects our view that Hypo Tirol is adhering to its current business strategy and financial profile, and that the level of extraordinary government support from Tyrol will remain the same. On May 30, 2018, S&P Global Ratings
