Schwyzer Kantonalbank

We expect that SZKB will remain the market leader in its canton, defending its superior franchise and longstanding customer relationships with approximately 80% of the canton's population. Accordingly, we expect SZKB's business profile will remain strongly linked to the economic cycles of the Canton of Schwyz. The stable outlook on Schwyzer Kantonalbank (SZKB) mainly indicates that we expect the likelihood of support from the Canton of Schwyz to remain unchanged in the next two years. Our rating on SZKB remains sensitive to our assessment of the cantonal owners' ability and willingness to support the bank. A weakening in SZKB's role for or link with the canton, or detrimental changes in the statutory guarantee, could lead us to revise down our

... resilient against the pandemic thanks to its solid franchise and high business stability offsetting concentration risks in real estate lending in Schwyz. Despite COVID-19, we forecast SZKB will maintain relatively stable return on equity (ROE) between 3%-4% by 2023, benefitting from SZKB's solid business model, and ongoing prudent risk management with cautious lending standards safeguarding its strong asset quality. SZKB is also helped by the resilient credit conditions in its home canton and real estate financing in particular, considering that more than 70% is well collateralized residential mortgage lending. The remainder is more concentrated regional commercial real estate loans and financing local small and midsize enterprises (SMEs), increasingly (about 30%) outside its home canton. We expect that SZKB will remain the market leader in its canton, defending its superior franchise and longstanding customer relationships with approximately...

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