Sound asset quality; Stable funding sources; and Adequate capitalization. Weak operating profitability outlook; Weakened group capital; Unconvincing management track record at a group level; and Residual risk from ownership in Allgemeine Hypothekenbank Rheinboden AG. The ratings on Germany-based BHW Bausparkasse (BHW B) are based on its sound asset quality, stable funding, and adequate capital. This is offset by low and largely interest-rate-sensitive profitability, group management's unconvincing track record, particularly in interest rate management and in solving problems at its ailing subsidiary Allgemeine Hypothekenbank Rheinboden AG (AHBR; BBB-/Negative/A-3), and the strain on the group's resources from support for AHBR. BHW B is the principal subsidiary of BHW Holding AG (not rated), the parent of the BHW group, which predominantly provides building
