Regional sector cohesiveness and a regional protection scheme. Helaba's high systemic importance to Hesse and Germany. Strong retail market penetration in Hesse and Thuringia. The savings banks' stable retail deposit base. Sound sector capitalization. Helaba's tail risk from concentrated exposures to cyclical commercial real estate and corporate businesses. Helaba's only modest preprovisoning and capital buffers to absorb risk from the wholesale-centered business model. The savings banks' high, inflexible cost base and exposure to margin erosion. Limited incentives to improve profitability and address strategic challenges. The ratings on Germany-based Sparkassen-Finanzgruppe Hessen-Thueringen (SFHT) core group members, which include the 50 savings banks in the states of Hesse (AA/Stable/A-1+) and Thuringia (not rated) and its 85% owned central institution Landesbank Hessen-Thueringen Girozentrale (Helaba),
