Implicit ownership support by Deutsche Postbank AG Sound asset quality Stable funding sources Adequate capitalization Very weak earnings prospects, but recovering from its earnings trough in 2005 Earnings recovery dependent on interest rate environment Lack of business diversification Difficult domestic markets and high competition The ratings on Germany-based BHW Bausparkasse AG, Hameln (BHW B) are based on its strategically important group status to, and ownership by Deutsche Postbank AG (Postbank; A-/Stable/A-2) since Jan. 2, 2006. The ratings also reflect BHW B's sound asset quality, stable funding, and adequate capital. Expected ownership support remains pivotal, however, to alleviate BHW B's much weaker intrinsic risk and financial profile, which is dampened by an operating performance that is still poor yet expected to
