The ratings on Bayerische Hypo- und Vereinsbank AG (HypoVereinsbank) and its five domestic mortgage bank subsidiaries, and on Pfandbrief Bank International S.A. follow today's announcement of HypoVereinsbank's decision to restructure and consolidate its real estate activities. Standard&Poor's views this as a consistent move in light of an increasingly competitive low-margin environment, growing customer demands, unsatisfactory profitability levels, and a slowdown in new business in the domestic market. Despite improving in western Germany, the market still suffers from the aftermath of the lending boom following unification and the recession of the mid-1990s. Nevertheless, the restructuring puts a further strain on senior management's capacity, as it is currently occupied with the integration of Bank Austria (AA+/Negative/A-1+), which continues to be
