Schwyzer Kantonalbank

The stable outlook on SZKB mainly indicates that we expect the likelihood of support from Schwyz to not change in the next two years. Our rating 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 support assessment of the bank's status as a government-related entity (GRE). However, we do not envisage such a scenario in the next two years. Also, if this were to happen, we expect that SZKB's existing obligations would be grandfathered. It is unlikely we would revise upward the rating based on an improvement in

...S&P Global Ratings expects Schwyzer Kantonalbank (SZKB) to remain resilient despite a deteriorating economy thanks to a highly resilient customer base and prudent lending policies. SZKB itself is not materially affected by the challenging economy. Resilient credit conditions in the bank's home canton, coupled with ongoing prudent risk management and cautious lending standards safeguarding SZKB's strong asset quality, support its business stability. About 75% of the bank's portfolio is well collateralized residential mortgage lending. While real estate prices experienced significant growth, we do not expect that a market correction is imminent due to ongoing supply-demand imbalances. The remainder of SZKB's portfolio is concentrated on regional commercial real estate loans and financing local small and midsize enterprises (SMEs). We expect the bank will remain the market leader in its canton, defending its superior franchise and longstanding customer relationships. However, in our view,...

Full Report