TEXT-S&P release on Erste Group Bank AG

                                
 (The following statement was released by the ratings agency)
                                
 Oct 16 - Standard & Poor's Ratings Services said today it
revised its outlook on Austria-based Erste Group Bank AG
<ERST.VI> (Erste Bank) to negative from stable due to the
impact of increased contagion risk from global macroeconomic
pressures building in Central and Eastern Europe (CEE) and
Austria. At the same time, the' A/A-1' long- and short-term
counterparty ratings were affirmed.
                                
 We also revised to negative from stable the outlooks on
Erste Bank's subsidiaries, Romania-based Banca Commerciala
Romana (BCR) and Czech Republic-based Ceska Sporitelna a.s. The
'BBB-' long-term counterparty credit rating on BCR and 'A/A-1'
long- and short-term counterparty ratings on Ceska were
affirmed.
                                
 "The rating actions reflect growing macroeconomic risks
from global financial turmoil, which might negatively affect
the financial profile and business prospects in Erste Bank's
major operations in the CEE region and its home country," said
Standard & Poor's credit analyst Markus Schmaus.
                                
 "Furthermore, we see some contagion risk from the continued
confidence crisis and increasing risk aversion, which might
have a negative effect on international capital flows and
investor sentiment." Specifically, the large operations in
Romania and Hungary may put pressure on Erste Bank if the
operating environment were to deteriorate further.
                                
 The rating action on Ceska reflects its core subsidiary
status within the Erste Bank group. Given its relatively large
contribution to group earnings and strategic importance to
Erste Bank's focus on the CEE region, the ratings are equalized
with those on its parent and therefore move in tandem.
                                
 The rating action on BCR reflects our growing concerns
about the impact of the difficult operating environment in
Romania, which could place downward pressure on the bank's
stand-alone creditworthiness. Given the increasing level of
macroeconomic stress being experienced in CEE that could impact
Erste's capacity to provide strong support in the future, there
is a possibility that we might factor a lower level of parental
support into the rating than previously.
                                
 Erste Bank is particularly sensitive to an economic
downturn in CEE because of its strong position in the region,
with average risk-weighted assets representing 42% of the group
total and pretax profit 60% on June 30, 2008.
                                
 "A negative rating action could occur if we observe a
further rapid deterioration in macroeconomic conditions for its
major operations in CEE that could potentially affect asset
quality and profitability, in particular in Romania," said Mr.
Schmaus. Further pressure on the Romanian currency might be
negative given the country's high level of foreign currency
lending and reliance on foreign direct investments.