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 adequate capital. Constraining factors include the Czech Republic's higher-than-average economic and industry risks, still-weak creditor rights, potential risks from the buildup of rapid growth in the immature retail market, and the challenges in maintaining the positive financial trends in a young, but fast-maturing economy. Over time, CS has played an increasingly important role in the overall creditworthiness of its parent and its strategic ambitions to become
