Press Release from 2022-11-10 / Group, Investor Relations, Domestic Promotion

Third quarter 2022: Extraordinary promotional year continues for KfW

  • Significant increase in KfW promotional business volume to EUR 127.9 billion (09/2021: EUR 73.1 billion)
  • Very strong growth in domestic promotion and financing to EUR 112.5 billion (09/2021: EUR 60.3 billion)
  • The main drivers are support measures for securing the energy supply amounting to EUR 46.4 billion
  • Very good operational development in all business sectors
  • Positive consolidated earnings of EUR 993 million, exceeding expectations
  • KfW expands provision for expected losses in its loan portfolio
  • Tier 1 capital ratio of 24.8% and risk-bearing capacity remain high
  • Transformation agenda “KfWplus” currently being implemented

KfW Group’s promotional business volume remained at an extraordinarily high level of EUR 127.9 billion in the first nine months of 2022 (09/2021: EUR 73.1 billion; +75%). At EUR 112.5 billion, domestic promotion and financing also significantly exceeded the commitment volume of the previous year in the third quarter (09/2021: EUR 60.3 billion; +87%). The support measures for energy supply companies in the context of the Ukraine war of EUR 46.4 billion contributed in particular to this.

“2022 has once again been an extraordinary promotional year for KfW, primarily due to the war in Europe and the current energy price crisis. At EUR 127.9 billion, KfW recorded the highest third-quarter promotional business volume in its history. Reasons include the support given to the German economy to cope with the effects of the war of aggression against Ukraine. KfW is contributing more than EUR 46.4 billion to securing Germany’s energy supply. KfW will continue to support Germany on the road to energy sovereignty and in the green and digital transformation with all the means at its disposal,” explained Stefan Wintels, Chief Executive Officer of KfW.

The commitment volume of the KfW Capital business sector more than doubled to EUR 572 million in the same period (09/2021: EUR 230 million, +149%). This development was characterised in particular by commitments in the components of the Future Fund “ERP/Zukunftsfonds Growth facility” and “GFF/EIF Growth Facility” introduced last year.

New business in export and project finance rose to EUR 11.7 billion (09/2021: EUR 9.3 billion; +26%). Essentially, all sector departments in the industrial and transport sectors contributed to the increase.

KfW Development Bank’s commitments slightly exceeded the previous year’s figure at EUR 2.5 billion (09/2021: EUR 2.4 billion; +6%). DEG also recorded positive new business of EUR 0.8 billion (09/2021: EUR 0.7 billion; +18%).

KfW generated a consolidated profit of EUR 993 million in the first three quarters of 2022 (09/2021: EUR 1,929 million), below the exceptionally strong result of the previous year but above expectations. In the third quarter, KfW created additional provisions for the loan portfolio due to the challenging economic outlook with a number of risk factors.

The operating result before valuation (before promotional expense) amounted to EUR 1,199 million and was thus below the good result for the previous year of EUR 1,363 million. Net interest income (before promotional expense) was EUR 1,805 million (09/2021: EUR 1,924 million) and continues to be KfW’s main source of income. At EUR 464 million, net commission income (before promotional expense) almost reached the level of the previous year (09/2021: EUR 479 million). At EUR 1,070 million, administrative expense (before promotional expense) was only just above the previous year’s figure of EUR 1,041 million, despite KfW’s extensive, unplanned activities as a result of the Russia-Ukraine crisis.

Due to the currently rising interest rate environment, the demand for interest rate reductions is increasing again compared to previous years. As a result, domestic promotional expense – mainly interest rate reductions for new business – which has a negative impact on KfW’s earnings position at EUR 181 million was significantly higher than in the previous year (EUR 94 million).

The valuation result is characterised by charges in the loan and equity investment portfolio. The risk provision result in the lending business totalling EUR -129 million (09/2021: EUR +312 million) is characterised by the formation of deferred risk provisions due to a challenging outlook regarding the macroeconomic factors. Risk provisions for non-performing loans continued to be moderate, close to the zero line. The valuation result from equity investments contributed a total of EUR +254 million (09/2021: EUR +644 million) to consolidated earnings. All investment portfolios except for the FC portfolio reported positive performance. The DEG portfolio recorded a positive currency result after partial hedging of EUR 120 million and a negative securities result of EUR 98 million. This resulted in a slightly positive net result in the equity investment portfolio of EUR 22 million.
Purely IFRS-induced effects from the valuation of derivatives used for hedging purposes placed a strain on the earnings position at EUR -66 million (09/2021: EUR -164 million).

At EUR 585.5 billion, total assets are EUR 34.6 billion above the figure as of 31 December 2021 (EUR 551.0 billion). This is primarily due to the implementation of the Federal Government’s package of measures to support energy supply in Germany, which led to a significant increase in the volume of lending.

With a total capital ratio of 24.9% and a (common equity) tier 1 capital ratio of 24.8% (30/06/2022: 24.7% and 24.6% respectively), the regulatory capital ratios remain at a very good level.

“The economic situation, characterised by considerable uncertainties, is largely responsible for the decline in earnings in the third quarter. The economic environment is currently more challenging than it has been for a long time and will also influence the fourth quarter due to the current uncertainties and stress factors. Nevertheless, we expect a satisfactory consolidated profit for 2022 as a whole,” emphasised Stefan Wintels.

In April 2022, KfW adopted its transformation agenda KfWplus. The guiding principle of the agenda is "Promoting transformation - boosting resilience". It aims at developing KfW into the digital transformation and promotional bank in the medium to long-term.
"I am firmly convinced that we have to transform ourselves if we want to successfully support and accompany the transformation of the economy and society. KfWplus provides us with the necessary framework for implementing our transformation agenda, which we already started in the summer," CEO Stefan Wintels said. The focus of the KfWplus transformation agenda is to increase the impact of promotion and - in view of the enormous financing needs - to mobilise private capital more strongly than before.

Details on the business sectors’ promotional activities

1. SME Bank and Private Clients

In the SME Bank and Private Clients business sector, commitments totalling EUR 57.2 billion were achieved as of 30 September 2022 (09/2021: EUR 53.6 billion). With EUR 28.5 billion in the SME Bank (09/2021: EUR 19.8 billion) and EUR 28.7 billion in Private Clients (09/2021: EUR 33.8 billion), commitments were evenly distributed between the two segments. Overall, the momentum from the first half of the year weakened noticeably in the third quarter, as the promotional conditions in the Federal Funding for Efficient Buildings (BEG) were raised, partly due to the further development of construction standards. In addition, the general tendency to invest has deteriorated.

SME Bank: Start-ups and corporate investment
Commitments totalling EUR 9.5 billion were made in the priority area of start-ups and corporate investments up to 30 September 2022. They were down on the previous year (09/2021: EUR 11.1 billion). The main reasons behind this were the coronavirus aid programmes that expired this year and the declining propensity to invest due to the generally uncertain economic situation. The UBR Special Programme, which provides short-term liquidity to German companies affected by the Ukraine war, saw restrained demand with a commitment volume of EUR 91 million since the programme was launched.

SME Bank: Climate change and the environment
In the priority area of climate change and the environment, new commitments more than doubled to EUR 17.6 billion (09/2021: EUR 8.0 billion). In particular, there was very high demand, mainly in the first half of the year, for Federal Funding for Efficient Buildings (BEG) with EUR 10.4 billion in this priority area. The KfW Renewable Energies Programme at EUR 5.7 billion (09/2021: EUR 2.6 billion) also accounted for a significant portion of the promotional business volume.

SME Bank: Innovation
The priority area of innovation doubled its volume compared to the previous year to EUR 1.4 billion (09/2021: EUR 0.7 billion). The commitments were largely attributable to the ERP Digitalisation and Innovation Loan.

Private Clients: Energy efficiency and renewables
At EUR 24.1 billion, the majority of the promotional business volume in the Private Clients segment is attributable to the priority area of energy efficiency and renewable energies (09/2021: EUR 27.3 billion). In the same period of the previous year, non-recurring effects were decisive for the extremely high commitments in the priority area of Federal Funding for Efficient Buildings (BEG) and Energy-efficient Construction and Refurbishment (EBS). Despite the weakened commitment momentum in the third quarter, the majority of commitments in the business sector were still attributable to the Federal Funding for Efficient Buildings (BEG).

Private Clients: Residential & Housing
In the priority area of residential and housing, new commitments of EUR 3.2 billion were achieved (09/2021: EUR 4.9 billion). The biggest driver was the KfW Home Ownership Programme at EUR 2.5 billion (09/2021: EUR 3.2 billion), although demand for real estate financing also fell here due to higher interest rates. The cooperative variant of the KfW Home Ownership Programme was launched on 4 October 2022.

Private Clients: Education
In the Education segment, new commitments totalled around EUR 1.4 billion as at the third quarter of 2022 and were therefore slightly below the level of the previous year (09/2021: EUR 1.5 billion). The slight downturn was due in particular to lower commitments in the KfW Student Loan (09/2022: EUR 0.4 billion, 09/2021: EUR 0.6 billion), which was claimed by significantly more students in the previous year due to the coronavirus crisis.

2. Customised Finance and Public Clients

The Customised Finance and Public Clients business sector generated a commitment volume of EUR 54.7 billion in the third quarter of 2022 (09/2021: EUR 6.4 billion). The volume of new business, which is currently heavily influenced by special financing to secure the energy supply, is therefore far higher than the previous year’s figure of EUR 6.4 billion.

Customised finance: Corporates
In Customised finance Corporates, an exceptional commitment volume of EUR 46.7 billion (09/2021: EUR 0.2 billion) was recorded. In connection with the war of aggression against Ukraine, mandated transactions on behalf of the German Federal Government to support energy supply companies totalling almost EUR 46.4 billion were committed. Financing was committed in particular for procuring replacement gas, covering short-term liquidity requirements within the scope of “margining” (provision of collateral that is mandatory when trading in energy) and for financing the procurement of natural gas for achieving the statutory fill levels of gas storage facilities in Germany.

Individual financing: Banks and promotional institutions of the federal states
With a business volume of over EUR 2.8 billion, individual finance for banks and promotional institutions of the federal states was below the previous year’s figure (09/2021: EUR 3.3 billion). Constant demand for general funding of promotional institutions of the federal states is offset by reduced commitments for global loans for leasing investments and the refinancing of export credits.

Municipal and social infrastructure
With a business volume of almost EUR 5.2 billion, the priority area of municipal and social infrastructure was well above the previous year’s level (09/2021: EUR 2.9 billion). The increase is due in particular to the special promotion of refugee facilities for municipalities and the Investment Loan for Municipal Enterprises. Furthermore, demand was very high, particularly in the first half of the year relating to the Federal Funding for Efficient Buildings Programme (BEG) for municipalities, the Digital Infrastructure Investment Loan and the newly introduced Sustainable Mobility Investment Loan.

3. KfW Capital

Commitments in the KfW Capital business sector totalled EUR 572 million as at the third quarter of 2022, which compared with the same period in the previous year (09/2021: EUR 230 million) represents an increase of 149%. The increase is mainly due to investment activity in the two equity capital components of the Future Fund introduced last year: By 30 September 2022, around EUR 441 million (09/2021: EUR 97 million) had been committed through the two programmes “ERP/Future Fund (“Zukunftsfonds”) Growth Facility” (EUR 190 million) and “GFF/EIF Growth Facility” (EUR 251 million). The latter is carried out by the EIF using KfW fiduciary funds from the Future Fund (“Zukunftsfonds”) In addition, EUR 89 million was committed in the “ERP VC Fund Investments” programme (09/2021: EUR 112 million). With the support of the ERP Special Fund and the Future Fund, KfW Capital invests in European VC funds, which in turn finance innovative technology companies in Germany with at least the capital provided by KfW Capital.

4. KfW IPEX-Bank

KfW IPEX-Bank, which is responsible for the export and project finance business sector and provides financing to support German and European companies on the global markets, was able to grow significantly in the third quarter despite the continuing effects of the coronavirus crisis and war-related disruptions: although the half-year figures were still below the previous year’s level, new commitments at the end of the third quarter came in significantly higher at EUR 11.7 billion (09/2021: EUR 9.3 billion). All sector departments contributed to new business, and the Industries and Services sector department deserves mention at EUR 2.3 billion (09/2021: EUR 0.7 billion). In particular, this includes financing for the expansion of broadband in Europe, underlining the bank’s commitment to the expansion of digital infrastructure. The Power and Environment sector department came in second with EUR 1.9 billion (09/2021: EUR 2.0 billion), focusing in particular on renewable energy projects such as wind and solar farms.

5. Promotion of developing countries and emerging economies

5.1 KfW Development Bank
In the third quarter of 2022, KfW Development Bank slightly increased commitments for projects in developing countries and emerging economies to EUR 2.5 billion (09/2021: EUR 2.4 billion). Of federal budget funds totalling EUR 951 million, the predominant share, i.e. EUR 672 million, went to countries in Africa and the Middle East. In the first months of this year, too, there were high levels of commitment for coronavirus aid (for vaccination campaigns and emergency aid), for example for Brazil, but also for countries in the Middle East.

5.2 DEG
New DEG business performed well in the third quarter of 2022, particularly in view of the continuing challenging underlying conditions: as of 30 September 2022, DEG was able to commit EUR 821 million to investments by private companies in developing countries and emerging economies, almost a fifth more than in the prior-year period (09/2021: EUR 693 million). In addition to loan financing of EUR 660 million, it invested around EUR 161 million in equity capital, for example in the production of generics for Africa. From a regional standpoint, Latin America and Africa/MENA accounted for the bulk of new commitments. In view of the ongoing war against Ukraine, DEG continues to support its Ukrainian customers with financing and advisory services.

6. Financial markets

KfW raised funds of EUR 78.2 billion on the international capital markets in 13 different currencies to fund its promotional business during the period from January to September 2022 (09/2021: EUR 70.9 billion). Of this, 63% was funded in euros, which, besides its importance as the domestic currency, is also due to the favourable funding conditions in EUR in the reporting period. On the other hand, the funding environment in the US dollar market, which is also strategically important for KfW, was significantly more demanding. At 21%, the share of funding in US dollars was nevertheless at a high level. With regard to the funding instruments, the majority (63%) of borrowing on the capital market came from the issue of benchmark bonds. Green bond issues and private placements each contributed around 10% to the total funding in the first nine months.

In a generally difficult environment with rising interest rates, high inflation rates and persistent volatility, KfW was thus able to successfully fund 87% of its target of EUR 90 billion for 2022 as a whole via the capital market in the first nine months. At the end of October, the funding volume was already EUR 86.5 billion.

Since the end of October 2022, KfW has also been able to make use of loans from the Economic Stabilisation Fund (“WSF”) to fund the transactions assigned to it by the German Federal Government under Article 2 (4) of the KfW Law in relation to the energy industry and energy supply. The funding option via the WSF supplements the bank’s regular capital and money market activities.

Key figures of the income statement (EUR in millions)01/01/2022 – 30/09/202201/01/2021 – 30/09/2021
Operating result before valuation (before promotional expense)1,1991,363
Promotional expense18194
Consolidated profit9931,929
Consolidated profit before IFRS effects from hedging1,0582,092
Key figures of the statement of financial position (EUR in billions)30/09/202231/12/2021
Total assets585.5551.0
Volume of business730.9686.9
Key regulatory figures (in %) 1) 30/09/202230/06/2022
(Common equity) tier 1 capital ratio24.824.6
Total capital ratio24.924.7

1) The capital ratios stated take into account the eligible interim results according to Art. 26 (2) of the Capital Requirements Regulation, which deviate from the respective annual results in accordance with IFRS.

An overview of the business and promotional figures is available in table form at:

KfW Annual Report online:


Portrait von Sybille Bauerfeind