Core subsidiary to the Erste Group. Strong domestic market position, notably in the retail segment. Strong capital position. Deposit funded bank. Geographical concentration in the Czech Republic. Exposure to the more volatile commercial real estate sector. Earnings sensitivity to record-low interest rates. The negative outlook on Czech-based bank Ceska Sporitelna (Ceska) reflects that of its nearly 98%-owner Erste Group Bank AG (Erste; A/Negative/A-1) and its core status within the group, according to our criteria. Consequently, for as long as we consider Ceska as a core subsidiary any positive or negative rating action on Erste would result in a similar action on Ceska. Ceska's core status within Erste could be challenged if Erste were to substantially reduce its majority stake in
