The ratings on Czech Republic-based Ceska Sporitelna a.s. (CS) reflect its high strategic importance to Austria-based Erste Bank der oesterreichischen Sparkassen AG (Erste Bank; --/--/A-2), where it is considered a core rated entity; its solid domestic retail franchise, providing it with outstanding liquidity; and a solid financial profile--including good asset quality, satisfactory profitability, and capital. Constraining factors include the Czech Republic's still-weak creditor rights, potential systemwide risks from the buildup of rapid growth in the immature retail market, and the challenges in maintaining the positive financial trends in a maturing economy. CS has, over time, played an increasingly important role in the overall creditworthiness of its parent, and its strategic ambitions to become a super-regional bank in Central Europe (CE).
