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KfW achieves record financing volume in Germany
Highest domestic financing volume in the bank's history
In the year 2009, KfW Bankengruppe provided EUR 50.9 billion for industry, the environment, housing and education in Germany (previous year: EUR 45.4 billion), the highest domestic promotional business volume in its history. In the area of trade and industry alone, KfW made EUR 23.8 billion available, and the greatest portion of this went to small and medium-sized enterprises. The KfW Special Programme, which was launched at the beginning of 2009, made a major contribution to this volume, with EUR 7.2 billion in loan commitments made by the end of the year. Of the nearly 2,500 loans committed under the KfW Special Programme, around 94% were for small and medium-sized enterprises.
Environmental investments up by 12.5% to EUR 19.8 billion
Besides supporting small and medium-sized enterprises and fighting the consequences of the recession, climate and environmental protection were the main areas of promotion. Under its programmes for energy-efficient construction and rehabilitation KfW promoted the improvement of the energy balance of residential buildings and the reduction of CO2 emissions by providing a total of EUR 8.9 billion, thus contributing significantly to achieving the Federal Government's climate protection goals. KfW committed a total of EUR 19.8 billion for investments in climate and environmental protection in Germany and abroad. This was nearly one third of KfW Bankengruppe's overall promotional business volume. In Germany alone, promotional business in these areas increased by 31% on the year 2008 to reach EUR 16.5 billion (2008: EUR 12.6 billion).
While domestic promotional business increased by 12.1% on the year 2008, the global financial and economic crisis affected the results of the remaining business areas. The overall business volume of KfW Bankengruppe for the year 2009 was EUR 63.9 billion, a figure nonetheless comparable to the previous year's result (EUR 67.8 billion).
Results of the activities of the individual business areas
The business area of KfW Mittelstandsbank made loan commitments in a volume of EUR 23.8 billion in 2009, a 40% increase over the previous year. This substantial growth was driven primarily by the strong increases in financings for start-ups and general capital expenditure, including the KfW Special Programme (up 49% to EUR 15.5 billion). The financings of commercial investments in energy efficiency and environmental protection also increased substantially from EUR 5.7 billion to EUR 7.0 billion (up 22.8%). With a commitment volume of EUR 7.2 billion in 2009 the KfW Special Programme made a fundamental contribution to securing financing for small and medium-sized enterprises. Some 94% of all commitments went to SMEs. The main focus here was on working capital financings as liquidity support in the crisis. They accounted for 70% of commitments. Under the programme variant "Global Loans", which was introduced in September, agreements worth a total of EUR 1.5 billion were signed with two credit institutions in 2009. "Precisely because the economy is recovering gradually, in 2010 many enterprises will likely face big challenges in accessing finance once again. Accordingly, the Federal Government and KfW have already announced the further improvement of conditions under the KfW Special Programme, which will apply from 1 February 2010. These include interest rate reductions and greater flexibility within individual programme elements.
In the business area KfW Privatkundenbank the overall volume of financing increased by 8.1% to EUR 16.1 billion (2008: EUR 14.9 billion). The programmes for energy-efficient construction and rehabilitation recorded a strong increase in demand, which led to a record commitment volume of EUR 8.9 billion. This exceeded the previous year's volume of EUR 6.3 billion by 41.3%. In education finance the commitment volume was increased significantly from EUR 1.3 billion to EUR 1.7 billion. This was due to improved overall conditions in vocational education finance and to higher demand for individual educational finance schemes such as KfW Student Loans.
In the business area KfW Kommunalbank the direct business of municipal financing nearly matched the previous year's level, not least as a result of the 'Investment Offensive Infrastructure' (Economic Stimulus Package I). Following weaker demand during the first half of the year, business picked up again noticeably in the second half. In contrast, the volume of general funding of the promotional institutions of the federal states decreased, leaving the overall volume of the business area at EUR 9.4 billion (previous year: EUR 11.6 billion).
In the year 2009, the business area Promotion of Developing and Transition Countries committed funds totalling EUR 4.5 billion, slightly less than the volume of the previous year (EUR 4.9 billion). KfW Entwicklungsbank made commitments in a volume of EUR 3.5 billion (previous year: EUR 3.6 billion). In addition to the funds allocated from the federal budget, KfW employed EUR 1.9 billion in own funds for the financing of projects, which represented 54.3% of the overall commitments of KfW Entwicklungsbank. These own funds, which KfW raises in the capital market, make an important contribution to increasing the commitment volume recognised as Official Development Aid (ODA). Commitments by the KfW Bankengruppe subsidiary DEG increased significantly after weaker results in the first half owing to the financial and economic crisis. Nonetheless, it closed the year with a commitment volume of EUR 1.0 billion, less than the previous year's EUR 1.2 billion. A particularly pleasing result is that the volume of funds committed by DEG for investments in Africa was the highest in its history, at EUR 266 million.
With EUR 8.9 billion in new loan commitments KfW IPEX-Bank lived up to its pledge to be a reliable financing partner of both the German and European economies in a very difficult market environment. As anticipated, the commitment volume was much lower than in the exceptional year 2008, totalling EUR 17.6 billion in 2009. The economic crisis caused enterprises in Germany and abroad to massively postpone investment plans, and demand for loans dropped sharply. In addition, KfW IPEX-Bank supported many enterprises in restructuring and deferring their repayments, thereby helping many enterprises to survive and saving numerous jobs.
An area that continues to be in difficult shape is the securitisation market. Particularly because investors still lacked confidence, the volume of commitments in asset securitisation transactions remained below the previous year's level (EUR 1.9 billion), at EUR 1.5 billion.
In its b KfW Bankengruppe raised a total of EUR 74.7 billion in the international capital markets in 2009 (previous year: EUR 75.3 billion). In spite of the difficult environment it has achieved the issue volume which it had announced and passed the stress test 'Funding in the Financial Market Crisis'. KfW's funding target for the year 2010 is EUR 70 billion to EUR 75 billion.
28 January 2010
