The ratings on Germany-based BHW Bausparkasse AG, Hameln (BHW B) are based on its developing strategic importance to, and new ownership by Deutsche Postbank AG (Postbank; A/Negative/A-1). The ratings also reflect BHW B's sound asset quality, stable funding, and adequate capital. Furthermore, the ratings also take into account BHW B's weaker intrinsic risk and financial profile, reflecting its expected medium-term very weak operating earnings performance, lack of business diversity, and its low efficiency. This is expected to gradually benefit from more sound Bauspar tariffs, substantially increased retail customer access, and expected ownership support to alleviate BHW B's vulnerability to a low interest rate climate and difficult domestic markets. BHW B provides building savings (Bauspar) and mortgage finance services as Germany's
