Standard & Poor's Ratings Services agency has assigned its 'A' long-term counterparty credit rating to Erste Bank with stable outlook. At the same time, the short-term 'A-1' rating has been affirmed. Those ratings on Erste Bank are based on the group's major market position in Austria and several countries in CEE, and the ongoing improvement in profitability in large parts of the group. These positive factors are partially offset, according by S&P agency, by modest capital levels as a result of Erste Bank's acquisition strategy; still moderate earnings levels in the competitive Austrian market; and ambitious growth targets, which rely to a significant degree on continued positive prospects for CEE.
Our view: We do not expect a significant trading reaction from the news. Lately S&P agency had assigned 'A-1'short term rating on lower anticipated risk concerning the acquisition of BCR.