Research: Rating Action: Moody’s Subjects Raiffeisenbank Austria’s Ratings and Counterparty Risk Assessments for Review for Upgrade

Rating action follows review of Croatia’s sovereign ratings upgrade

Limassol, June 28, 2022 — Moody’s Investors Service (“Moody’s”) today placed Raiffeisenbank Austria dd (RBA) long-term counterparty risk (CRR) ratings (CRR) Baa2 and long-term Baa3(cr)/P and short-term -3(cr) Counterparty risk (CR) ratings under review for upgrade. At the same time, the rating agency affirmed all other ratings and assessments, including the bank’s ba2 Base Credit Assessment (BCA), its ba1 Adjusted BCA and Baa2/P-2 deposit ratings.

Today’s rating action follows the decision of the EU’s Economic and Financial Affairs Council on June 17 to recommend that Croatia adopt the euro as its national currency from January 1, 2023, prompting Moody’s to review the Croatian government’s Ba1 senior unsecured and issuer ratings. for an upgrade (see: Moody’s puts Croatia’s Ba1 ratings under review for an upgrade;

A full list of affected ratings and reviews can be found at the end of this press release.



The upgrade review of the RBA’s CRR and CR ratings is driven by Croatia’s sovereign rating upgrade review and reflects the fact that these ratings and ratings are currently constrained by the government rating.

In line with Moody’s Banks methodology, the RBA’s Baa2 long-term CRR is limited to two notches above the government’s Ba1 rating. The RBA’s Baa3(cr) long-term CR rating is limited to one notch above the government rating, also in line with Moody’s methodology.

Without these constraints, the CRR and CR ratings would each have benefited from a three-notch increase in the RBA’s ba1-adjusted BCA based on Moody’s advanced loss-given-default (LGF) analysis.


According to the rating agency, the decision to affirm the RBA’s ba2 BCA reflects the bank’s strong capital cushions, with a tangible common equity to risk-weighted asset ratio of 17.5% at the end of 2021, although Moody’s expects the ratio to decline as the RBA recovers. dividend distributions, a stable funding structure based on deposits and high liquidity. These strengths are moderated by relatively high asset risks, with problem loans equivalent to 4.8% of gross loans at the end of 2021 and relatively high credit costs throughout the cycle, and moderate and volatile profitability. . The RBA’s BCA also reflects the high risk of litigation from consumers who had borrowed in Swiss francs in the past and are suing the bank claiming to have suffered losses based on exchange rate differences, as well as compensation for changes in interest rates.

BCA adjusted ba1 continues to incorporate Moody’s assessment of a high likelihood of support from affiliates of Raiffeisen Bank International AG (RBI; long-term/senior unsecured bank deposits: A2/A2 stable, BCA: baa3), which results in a one-notch rating uplift.


The confirmation of the RBA’s Baa2 long-term deposit ratings follows the confirmation of the bank’s BCA and adjusted BCA and reflects the fact that these ratings are not currently capped by the sovereign rating.

RBA’s Baa2 rated deposits are positioned two notches above the ba1 adjusted BCA of Moody’s advanced LGF analysis which indicates very low loss given default reflecting the likely reduction in expected loss due to absorption losses provided by the substantial volume of deposits.


The CRR and CR ratings could be improved at the end of the review, in case the Croatian government ratings are improved.

Upward pressure on the RBA’s ABC and therefore on the ratings could also result from a significant improvement in Croatia’s operating environment, for example as a result of the country joining the eurozone, as well as lower asset risk, significantly reduced litigation risk and sustainably stronger and more stable profitability indicators for the RBA, should sovereign ratings be upgraded.

CRR and CR ratings could be affirmed at their current levels following confirmation of Croatian government ratings at Ba1.

Downward pressure on the RBA’s BCA and hence ratings could be triggered by an unexpected deterioration in operating conditions, a significant deterioration in the bank’s asset quality and profitability measures, higher than expected legal costs or a significant reduction in the bank’s capital beyond what is currently expected.

A significantly reduced ability or willingness of the RBI to provide support to the RBA, or a change in the bank’s liability structure that reduces the improvement provided by Moody’s advanced LGF analysis could also lead to a ratings downgrade. .


..Issuer: Raiffeisenbank Austria dd

Under review for upgrade:

….Long-term counterparty risk assessment, review for upgrade, currently Baa3(cr)

….Assessment of short-term counterparty risk, indictment for upgrade, currently P-3(cr)

….Long term counterparty risk ratings, under review for upgrade, currently Baa2


….Base credit rating adjusted, confirmed ba1

….Basic credit assessment, Confirmed ba2

….Short Term Counterparty Risk Ratings, Confirmed P-2

….Long-term bank deposit ratings, Baa2 confirmed, outlook remains stable

….Short-term bank deposit ratings, confirmed P-2

Action Outlook:

….Outlook, changed to Notes under review of Stable


The main methodology used in these ratings is the Methodology for Banks published in July 2021 and available on Otherwise, please see the Scoring Methodologies page on for a copy of this methodology.


For details on key rating assumptions and Moody’s sensitivity analysis, see the Methodological Assumptions and Sensitivity to Assumptions sections in the Disclosure Form. Moody’s rating symbols and definitions can be found at

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Alexios Philippides
Vice President – Senior Analyst
Financial Institutions Group
Moody’s Investors Service Cyprus Ltd.
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Martin E. Berry