Wuestenrot Bausparkasse AG

The stable outlook reflects our view on W&W's group ability to sustain strong performance in the insurance sector and effectively manage potential earnings pressure arising from investment income volatility. We might lower the ratings in the next two years if, over a prolonged period and contrary to our expectations, W&W is unable to maintain capital adequacy at a level close to our 'A' standard on a consolidated basis. This decline could occur due to an unexpectedly greater earnings reduction, possibly resulting from investment income volatility, or increased capital requirements because of aggressive growth, higher investment risk, or lower retained earnings than we expect. It could also happen if WBSK does not maintain the current positive momentum from supportive interest rates

...We expect Wuestenrot Bausparkasse AG to remain a core part of Wuestenrot & Wuerttembergische AG's bancassurance strategy. We base our ratings on Wuestenrot Bausparkasse AG (WBSK) on the aggregate creditworthiness of the insurance and banking operations of Wuestenrot & Wuerttembergische AG (W&W; A-/Stable/A-1). We expect WBSK to remain an integral part of the group's overall strategy. Beyond potential extraordinary support, group membership provides additional ongoing benefits to WBSK. W&W's time-tested bancassurance strategy includes significant cross-selling opportunities for both business lines. Furthermore, during unfavorable conditions--for example, during the low-interest rate environment--group membership allows for reduced earnings targets and shareholder payout expectations....

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