The ratings on Ceska Sporitelna a.s. (CS) reflect the bank's strong strategically important status within Austria-based Erste Bank der oesterreichischen Sparkassen AG (Erste Bank; --/--/A-2), which has increased its ownership in the bank to 97.9%; its strong position in the Czech retail banking market, which provides it with outstanding liquidity; and its improved financial profile--including satisfactory profitability and capital, together with relatively clean asset quality. Constraining factors include higher-than-average, although improving, economic and industry risks, and the challenge to grow core earnings from increased lending volumes while maintaining strong asset quality. Erste Bank, the second-largest bank in Austria, has a strong strategic commitment to building a profitable business in Central and Eastern Europe, which currently makes up more than 50%
