The ratings on BHW Bausparkasse AG, Hameln (BHW B) reflect the bank's sound asset quality and excellent credit loss track record, its stable and still relatively cheap deposit base, and a capitalization that is satisfactory in light of its risk profile. The ratings also reflect the bank's high cost-to-income ratio, which continues to compare unfavorably with international standards, and its continuously declining capital strength. Business restrictions under the German Buildings Savings Bank Act (Bausparkassengesetz) mitigate these concerns to some extent. The ratings on BHW B also take into consideration the bank's ownership by BHW Holding AG (not rated), and its strategic importance for and integration into the BHW group. In recent years, the relative importance of BHW B and BHW
