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Fitch upgrades Austria's Volksbanken-Verbund, member banks

Fitch Ratings on Feb. 19 upgraded Volksbanken-Verbund's long- and short-term issuer default ratings to BBB/F2 from BBB-/F3, with a stable outlook on the long-term rating.

The ratings agency also upgraded the Austrian bank's viability rating to "bbb" from "bbb-" and affirmed the support rating of 5 and the support rating floor of No Floor.

The agency also upgraded the long- and short-term issuer default ratings of VB-Verbund's member banks to BBB/F2 from BBB-/F3 and revised their outlooks to stable from positive. The members are Volksbank Kärnten eG, Waldviertler Volksbank Horn reg. GmbH, Volksbank Niederösterreich AG, Volksbank Oberösterreich AG, Volksbank Salzburg eG, Volksbank Steiermark AG, Volksbank Tirol AG, Volksbank Vorarlberg e. Gen., Volksbank Wien AG and Österreichische Ärzte- und Apothekerbank AG.

The upgrade reflects greater stability in the group's business model, driven by the near-completion of its three-year restructuring program and management's efforts to streamline the product range and risk management across the group. It also factors in sound funding and liquidity profile and modest earnings retention, when the need to repay the state capital until 2023 is taken into account.