The ratings on Germany-based BHW Bausparkasse AG, Hameln (BHW B) continue to reflect the bank's excellent asset quality and credit-loss record, strong liquidity, and strong funding position due to its stable and relatively cheap building savings (Bauspar) deposit base. It capitalization has deteriorated, but is still regarded as sound, given the bank's risk profile. The ratings also take into consideration BHW B's low profitability levels and cost structures, which are expected to improve only gradually as well as pressure from BHW Holding AG. With total assets of €30.6 billion ($31.5 billion, at €1.03 to $1) and adjusted common equity (ACE) of €871 million at Dec. 31, 2001, BHW B is the second-largest private buildings savings bank (Bausparkasse) in Germany. It
