Volkswagen Bank GmbH

The stable outlook reflects our view that VW Bank will maintain fairly steady financial performance over the next two years and very strong capitalization, while continuing to play an important role in VW's value proposition. We will assess any effect from the reorganization of captive finance activities when more details become available. We view a downgrade of VW Bank as remote as long as VW maintains its credit strength. We would only consider downgrading VW Bank if we observed that its strategic relevance to the group, expressed by its core group status, had weakened along with its stand-alone credit profile (SACP). A negative rating action on the parent alone would likely not lead us to downgrade the bank, reflecting our

...Volkswagen Bank GmbH's (VW Bank's) strong earnings and product offering support VW's mobility strategy. As a fully-owned captive finance subsidiary of German car producer VW (###+/Stable/A-2), VW Bank's core strategic business purpose consists of promoting the sale of VW products, supporting VW dealers, and strengthening customer relationships. S&P Global Ratings does not expect this role will change in the foreseeable future, but rather be supported by the important role of promoting the sale of electric vehicles, a clear focus for the group. VW's reorganization plan will not dilute VW Bank's strategic importance. VW's plan to combine most of its European captive finance activities, including VW Bank and Volkswagen Leasing GmbH, under a new European Central Bank (ECB)-regulated entity by mid-2024 will likely not change the strategic role of captive activities within the group. The new organizational structure will enable VW to use VW Bank's deposit franchise to fund its anticipated strong...

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