Leading retail banking franchise in Czech Republic. Strong capitalization underpinned by sound earnings generation capacity. Strong liquidity position and sound retail-deposit funding profile. Geographic concentration in the Czech Republic. Exposure to the volatile commercial real estate sector. Earnings sensitivity to low interest rates. The negative outlook on Ceska Sporitelna reflects our view of a one-in-three possibility that the Czech resolution authority and European Single Resolution Board will develop a unified single resolution process covering cross-border members of Ceska Sporitelna's parent company, Austria-based Erste Group Bank AG. In this scenario, we would most likely no longer rate Ceska Sporitelna higher than its parent. We expect to have more clarity on the planned resolution strategy by early 2017. We could lower the
