Standard & Poor's Ratings Services has raised its long-term counterparty credit rating on Komercni Banka to 'A+' from 'A' and affirmed the 'A-1' short-term rating, with a stable outlook. The rating action follows the upgrade of the foreign currency rating on the Czech Republic to 'A/A-1' with a stable outlook from 'A-/A-2' with a positive outlook. According to the agency the ratings reflect bank's operating in a well diversified economy with good growth prospects, and expectation that the bank will maintain its good commercial and financial performance. The long-term rating includes a three-notch uplift from the stand-alone creditworthiness to reflect expectation of strong support from its majority owner Societe Generale. The stable outlook reflects the opinion that Komercni Banka will be able to maintain its business and financial position, through the implementation of a well-defined strategy, while among negative rating factors the agency lists the increasingly competitive banking market and credit risks related to rapid loan growth in the retail market. Our view: We believe the news is positive, and supports the optimistic sentiment towards the stock, with Komercni Banka up some 38% year-to-date. However given that the news was released yesterday during the session we do not expect any material trading impact on today’s trading.