The ratings on Ceska Sporitelna a.s. (CS) reflect the bank's majority ownership by the Austria-based Erste Bank der oesterreichischen Sparkassen AG's (Erste Bank; --/--/A-2); its strong position in Czech retail banking, which provides it with strong liquidity; and the stabilization of its balance sheet by the Czech government. The ratings are constrained at the current level, due to the difficult operating environment for banks in the Czech Republic, together with the challenges faced by management and the bank's new owners to implement a broad restructuring program and improve the operational risks and competitiveness of CS. In July 2000, Erste Bank acquired a 52.07% stake in CS from the Czech government for Czech koruna (CZK) 19 billion ($544 million), giving Erste
