KfW: Good first half of 2025 – more promotion for business and private customers

• Volume of new commitments increased significantly by EUR 4.7 billion to EUR 39.4 billion
• Promotional expense amounting to EUR 246 million from own funds
• SME support for climate, environment and innovation more than doubled to EUR 6.9 billion
• Federal Funding for Efficient Buildings including promotion of heating systems for private customers increased by EUR 2.1 billion to EUR 5.3 billion
• Positive consolidated earnings of EUR 289 million despite challenging environment – economic result (consolidated earnings before IFRS effects, promotional expense and taxes) at EUR 824 million
• KfW Chief Executive Officer Wintels: “It is important for our customers that, in a challenging environment, we increase our volume of business and use our own funds.”

Frankfurt am Main – KfW had a good first half of the year in view of the challenging geopolitical environment. In total, it committed financing amounting to EUR 39.4 billion – almost five billion euros more than in the previous year (01-06/2024: EUR 34.7 billion).

There was a significant increase in domestic promotion, in particular. Here, the volume of new commitments at the mid-year mark amounted to EUR 25.3 billion (01-06/2024: EUR 20.6 billion). In the SME segment, demand for financing for climate, environmental and innovation projects in particular more than doubled (EUR 6.9 billion compared with EUR 2.8 billion in the prior-year period). Due to the significantly lower EU reference rate compared with the previous year and the associated attractive financing terms, demand for the “Renewable Energies - Standard” programme increased particularly strongly to EUR 3.6 billion (01-06/2024: EUR 5 million). The programmes for private customers also remained in high demand, with a focus on energy-efficient building funding, including promotion of heating systems.

“The significantly increased demand from SMEs for KfW loans for climate, environmental and innovation projects is an encouraging sign,”

said Stefan Wintels, Chief Executive Officer of KfW.

“The companies’ willingness to invest is crucial for employment and growth in Germany as a business location.”

At EUR 11.6 billion, new business in export and project finance almost reached the very high level of the previous year (01-06/2024: EUR 12.3 billion). At EUR 2.0 billion, commitments at KfW Development Bank were well above the prior--year level (01-06/2024: EUR 1.4 billion). As in the prior- year period, DEG committed around EUR 0.6 billion in financing (01-06/2024: EUR 0.6 billion).

At EUR 969 million, the operating result in the first half of the year was slightly higher than in the prior- year period (01-06/2024: EUR 965 million). It benefited from the continued strong performance of operating returns amounting to EUR 1,772 million (01-06/2024: EUR 1,752 million).

At the same time, the challenging geopolitical situation led to significant pressures on the valuation result – above all in the unchanged conservative risk provisions and the negative result from investments. Consolidated profit in the first half of 2025 declined to EUR 289 million, compared with EUR 932 million in the previous year. Despite the pressures, the economic result as consolidated profit before IFRS effects, promotional expense and taxes reached EUR 824 million (01-06/2024: EUR 1,215 million).

KfW significantly increased promotional expense in domestic business – i.e. the use of its own funds for customers – to EUR 246 million (01-06/2024: EUR 181 million). Promotional expense includes higher interest rate reductions for new business focusing on start-ups and corporate investments, innovation as well as on energy efficiency and renewable energies, as well as, for example, KfW’s commitment to digital education in the TUMO learning centres for children and young people “The result for the first half of the year reflects KfW’s responsible handling of the increased global risks,” said Stefan Wintels. “At the same time, the excellent operating result underlines our ability to strengthen the German economy and its competitiveness, especially during challenging times: This allowed us to significantly expand our promotional expense.”

KfW’s half-year profit of EUR 289 million is based on an unchanged strong operating result. At EUR 969 million, this was slightly higher than the previous year (01-06/2024: EUR 965 million). At EUR 1,436 million, net interest income (before promotional expense), which remains the group’s main source of income, was almost unchanged compared with the prior-year (01-06/2024: EUR 1,438 million). At EUR 336 million (before promotional expense), net commission income exceeded the prior-year amount of EUR 314 million. This was primarily the result of remuneration for promotional activities on behalf of the Federal Government. Administrative expense before promotional expense increased slightly to EUR 803 million (01-06/2024: EUR 786 million), in part due to the implementation of new promotional programmes.

The negative risk provision result in the lending business totalling EUR 95 million (01-06/2024: EUR +155 million) is largely attributable to additions to general credit risk provisions. To a lesser extent, the result is also due to provisions for individual loan exposures at risk of default. Overall, risk provisions take account of global economic uncertainties.

The valuation result from the investment portfolio in the amount of EUR - 175 million (01-06/2024: EUR +118 million) was mainly shaped by the significantly weaker US dollar. This particularly had an effect on the DEG business sector, whereas the portfolio results of KfW Capital and KfW Development Bank rose. Purely IFRS-related valuation effects from derivatives used for hedging purposes reduced earnings by EUR 221 million (01-06/2024: EUR +35 million).

Income tax expenses were EUR 68 million (01-06/2024: EUR 139 million).

At EUR 532.9 billion, total assets were below their level as at the end of 2024 (EUR 545.4 billion). The decline was mainly due to a downturn in volume of lending. Repayments in the coronavirus special programme and in the credit lines in the energy suppliers’ package of measures contributed to this development, which was enhanced by the strong devaluation of the US dollar.

With a total capital ratio and (common equity) tier 1 capital ratio of 29.0%, the regulatory capital ratios remained at a very good level (31 March 2025: 28.6%). The moderate increase in equity ratios resulted from the downturn in the total risk amount, which is also largely due to the significant devaluation of the US dollar and to repayments.

Details on the business sectors’ promotional activities

1. SME Bank and Private Clients

In the SME Bank and Private Clients business sector, the promotional business volume amounted to EUR 21.2 billion as of 30 June 2025 (01-06/2024: EUR 16.2 billion).

SME Bank

In the first half of the year, EUR 10.2 billion were newly committed in the SME Bank (01-06/2024: EUR 5.7 billion).

In the promotional priority areas of start-ups and corporate investments, new commitments amounting to EUR 3.3 billion (01-06/2024: EUR 2.9 billion) exceeded the prior-year result.

In the area of climate change and the environment, new commitments more than doubled in the first half of 2025 at EUR 5.3 billion compared with the previous year (01-06/2024: EUR 2.2 billion). In the “Renewable Energies - Standard” programme in particular, demand rose to EUR 3.6 billion (01-06/2024: EUR 5 million). This is due to the significantly lower EU reference rate compared to the previous year, which enables attractive financing terms.

Innovation financing also recorded increased demand of over EUR 1.5 billion (01-06/2024: EUR 0.6 billion). The volume in the ERP digitalisation and innovation loan more than doubled by EUR 1.4 billion compared with the previous year (01-06/2024: EUR 0.6 billion). This is also due to the ERP grant introduced in February, which is well received by the market.

Private Clients

At EUR 11.0 billion, new commitments in the Private Clients segment were slightly above the prior-year level (01-06/2024: EUR 10.5 billion).

The priority area of energy efficiency and renewable energies reached EUR 7.1 billion (01-06/2024: EUR 6.8 billion). In the Federal Funding for Efficient Buildings including promotion of heating systems, the volume of new commitments rose sharply to EUR 5.3 million (01-06/2024: EUR 3.2 billion). In the same period, promotion of heating systems was not yet open to all applicant groups.

In addition, the residential and housing sector slightly exceeded the prior-year level at EUR 3.0 billion (01-06/2024: EUR 2,8 billion).

At around EUR 0.8 billion, the area of education reached the prior-year figure.

2. Customised Finance and Public Clients

At EUR 4.0 billion, the Individual Finance and Public-Sector Clients business sector also exceeded the prior-year volume (01-06/2024: EUR 3.7 billion).

The municipal and social infrastructure segment increased to EUR 2.8 billion (01-06/2024: EUR 2.2 billion). This resulted from strong demand in investment loans for municipalities and municipal companies as well as in promotional loans for sustainable mobility.

At EUR 213 million, customised finance for corporates exceeded the value of the first half of 2024 by EUR 32 million. The crucial factor for this was the strong demand for KfW’s “Sustainable Transformation” syndicated loan.

With a business volume of EUR 1.0 billion, individual financing for banks and promotional institutions of the federal states remained below the prior-year figure of EUR 1.3 billion. This is primarily due to the development in the refinancing of export credits covered by federal guarantees, which was exceptionally strong in the prior-year period.

3. KfW Capital

Commitments in the KfW Capital business sector amounted to around EUR 146 million in the first half of 2025 (01-06/2024: EUR 679 million). The higher volume in the prior-year period was mainly due to the one-off commitment of EUR 500 million to the “High-Tech Start-up Fund (HTGF) Opportunity Fund”, which KfW Capital provided in a fiduciary capacity on behalf of the German Federal Government as part of the Future Fund.

In the first half of 2025, he first two commitments of EUR 25 million respectively could be made under the Impact Facility, which was launched in February as part of the Future Fund. In addition, KfW Capital’s investment pipeline, as planned, is well filled until the end of the year.

KfW Capital also acts as an investment adviser for the Growth Fund Germany, which at around one billion euros is among the largest venture capital funds in Europe, for which substantial private capital was raised. By the end of the first half of 2025, the fund had already committed EUR 690 million to 35 target funds.

4. KfW IPEX-Bank

The upward trend from the beginning of the year continued at KfW IPEX-Bank, which is responsible for the export and project finance business sector and provides financing to support German and European businesses in the global markets: As of 30 June 2025, new commitments reached EUR 11.6 billion, which is close to the very high level of the prior-year period (01-06/2024: EUR 12.3 billion).

All sector departments contributed to new business. Once again to be highlighted is the area of "Mobility", which comprises the departments of rail transport, maritime industries and aviation and, at EUR 4.1 billion, accounted for more than a third of total commitments. For example, financing was provided in the second quarter for trams in Rhine-Neckar traffic, construction vessels for the offshore wind industry, Western Europe’s largest district heating network in Berlin and a carbon capture and storage project in the United Kingdom. With these financings, KfW IPEX-Bank is supporting Germany and Europe as an economic centre as well as the transformation process worldwide.

5. Promotion of developing countries and emerging economies

KfW Development Bank

In the first half of 2025, the business sector KfW Development Bank committed EUR 2.0 billion for projects in developing countries and emerging economies (01-06/2024: EUR 1.4 billion). The vast majority of commitments were for loans from KfW's own funds. Projects in the field of climate and energy accounted for around 61% of commitments, corresponding to a volume of EUR 1.3 billion and opening up business opportunities for German and European companies, in particular.

Commitments for projects in the Middle East amounted to EUR 291 million. This includes a loan of EUR 200 million to the Kingdom of Jordan: In times of economic challenges due to regional crises, the German Federal Government is supporting the country on its reform course.

DEG

At the end of the second quarter of 2025, DEG’s new business was at the same level as the previous year. New commitments from DEG’s own funds for investments by private companies in developing countries and emerging economies amounted to EUR 556 million (01-06/2024: EUR 588 million).

A total of EUR 349 million was earmarked for investment projects by German SMEs and local partners who purchase German components, for example. This includes EUR 29 million of loan financing from the ImpactConnect programme funds, for example for further investments by a leading German plant breeder in Kenya. Regional focus areas of the DEG commitments in the form of loans and investments were Europe with EUR 212 million and Africa/MENA with EUR 169 million, followed by Latin America (EUR 113 million).

6. Financial markets

In the first half of 2025, KfW successfully raised funds in the amount of EUR 50.3 billion in the international capital markets to fund its promotional business (01-06/2024: EUR 55.0 billion). This corresponds to around 72% of the funding of around EUR 70 billion planned by the end of the year.

KfW issued almost 100 bonds in nine different currencies, with the European home currency accounting for the majority with net revenues of EUR 27.1 billion. KfW bonds in US dollars, which contributed EUR 14.1 billion to refinancing, were particularly in demand.

A significant milestone was reached in the green bond business: KfW recently surpassed the equivalent of EUR 90 billion in cumulative green bond issuances since 2014. In the first half of 2025 alone, green bonds in seven different currencies were issued to the equivalent of EUR 9.5 billion, which means that the annual target of at least EUR 10 billion is almost achieved. KfW is planning to issue further “Green Bonds – Made by KfW” in the second half of the year, underlining its strong commitment as a climate financier.

In the first half of 2025, KfW implemented important steps in the digitalisation of its capital market activities. In April, it bought a blockchain-based Pfandbrief on the secondary market for the first time and issued its first digital bond in a wholesale CBDC (Central Bank Digital Currency), the digital Swiss franc, in June. This innovative issue offers investors the option of subscribing and trading the bond in either the traditional way or in wholesale CBDC. In addition, KfW almost tripled the volume of its bonds issued as central register securities based on the German Electronic Securities Act (eWpG) to a total volume of over EUR 24 billion via the digital after-trade platform D7 of the German stock exchange. These steps are part of KfW’s overarching goal of increasing efficiency, promoting the competitiveness of the German and European financial markets, and contributing to the development of a digital financial ecosystem.

_{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: Business and Promotional Figures | KfW.

KfW Annual Report online: Reporting Portal | KfW