The ratings on Oberösterreichische Landesbank AG (Hypo OÖ) senior unsecured unguaranteed obligations benefit from three notches of implicit ownership support from the State of Upper Austria (AAA/Stable/A-1+). The ratings also reflect the cooperation on selected areas with its strategic partner, Raiffeisenlandesbank Oberösterreich (RLB OÖ; not rated), its sound stand-alone risk profile, and its sound market share in state-related banking services. The impact from the loss of state guarantees is regarded as manageable for Hypo OÖ. Primary constraining factors are low profitability and earnings diversification, due to its profile as a small regional bank as well as its focus on one major customer group. Hypo OÖ's market position outside its state-housing promotion business is still low because of the highly competitive
