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Letter from the Executive Board

Dear readers,

Promotional year 2019 was a successful one, in which both our promotional instruments and our expertise were in demand once again. This enabled us to finance a large number of projects contributing to climate protection, sustainable economic growth, quality of life and prosperity in Germany, in Europe and around the world.

Message from KfW’s Executive Board regarding the coronavirus crisis

Just before the publication of our 2019 Annual Report, the coronavirus crisis has hit us with full force. This crisis poses a formidable challenge for all of us. Rapid and targeted measures are required to stabilise the economy. In this situation, KfW is taking responsibility as Germany’s largest promotional bank. As we have already done in the recent past, namely after the financial crisis of 2008, KfW will be supporting enterprises in Germany with an extensive special programme. The objective is to quickly provide liquidity for small, medium-sized and large enterprises and guide them through these difficult times. At KfW, we will put all our experience and strength to work in implementing the special programme on behalf of the German Federal Government, together with the German credit industry. All our activities are currently secondary to this objective. This task will have a decisive impact on our 2020 business year.

Commitments in 2019

KfW's total business volume grew to EUR 77.3 billion in 2019 (2018: EUR 75.5 billion), of which EUR 43.4 billion went to promoting businesses, private clients and municipalities in Germany (2018: EUR 46.0 billion). Demand for promotional loans declined overall due to the low interest rate environment and positive financing conditions; however, it differed between programmes. The “Baukindergeld” scheme introduced in September 2018 continued to attract great demand in 2019, and the KfW Home Ownership Programme made a substantial contribution to fostering home ownership in Germany with a considerable increase in commitments. The commitment volume in financing for businesses rose both for the KfW Entrepreneur Loan and under the KfW Renewable Energies Programme. KfW Capital, the subsidiary responsible for expanding venture capital financing, committed investments of EUR 156 million in its first full financial year, and established a firm footing in the market.

The commitment volume in business sector Export and project finance, which provides financing in the interests of the German and European economy, rose by around 25% to a record EUR 22.1 billion (2018: EUR 17.7 billion). This is in large part attributable to the growth in bank refinancing from the CIRR ship and ERP export financing programmes. At EUR 10.6 billion, promotion of developing countries and emerging economies maintained the high volume of the previous year (2018: EUR 10.6 billion). EUR 8.8 billion of this amount was accounted for by KfW Development Bank and EUR 1.8 billion by DEG. The regional focus for KfW Development Bank was on Africa and the Middle East, with 43% of commitments (almost EUR 3.5 billion).

The qualitative targets which are relevant for KfW’s promotional activities developed well on a stable trajectory with climate and environmental protection (“environmental share”) at 38% and promotion of SMEs (“SME share”) at 40% of financing.

Annual result 2019

Development of the earnings position was satisfactory in financial year 2019, with consolidated profit of close to EUR 1.4 billion, despite a year-on-year decline (2018: EUR 1.6 billion). The operating result before valuation (before promotional expense) of EUR 1.7 billion was particularly encouraging, thanks to increased interest and commission income, and lower administrative costs compared to the previous year (2018: EUR 1.4 billion).

The valuation result was below that of the previous year due to an increased but still moderate net risk provisioning charge of EUR 174 million (2018: EUR 3 million) and a lower positive contribution from the equity investment portfolio of EUR 95 million (2018: EUR 128 million). This decline was reinforced by IFRS-induced effects from hedge accounting of EUR 80 million, which had a negative impact on earnings.

KfW’s domestic promotional expense, which has a negative impact on the group’s earnings position, remained considerably below expectations at EUR 159 million (2018: EUR 216 million) in the continuing low interest rate environment.

Consolidated total assets rose by EUR 20.2 billion to EUR 506.0 billion in 2019 (2018: EUR 485.8 billion). This increase was in particular attributable to an increase of EUR 9.4 billion in liquidity held and an increase of EUR 5.0 billion in net loans and advances.

Agenda D-N-A

Digitalisation, sustainability and Africa (in German: Digitalisierung, Nachhaltigkeit und Afrika – “DNA”) are major challenges of our time. Our future is dependent on the solutions we find for unrelenting climate change, on whether we succeed in shaping digital change, and how we can give our neighbouring continent with its strongly growing population prospects for the future. As one of the largest national promotional banks in the world, we therefore made these issues the core of our business, our DNA, back in 2018.


The focus on sustainability has always been one of KfW's key features – in business, in its operations and as an employer. KfW takes account of the highest environmental and social standards in its financing, not least to set an example for the market. Nevertheless, we want to go further and develop KfW into the sustainable bank of the future. Sustainability is therefore a central component of our corporate strategy.

2019 was a year of agenda setting. Our new sustainability mission statement is directly based on the UN's Sustainable Development Goals (SDGs), the Paris Agreement of 2015 and the German Federal Government's sustainability strategy. Among other things, our new exclusion list rules out funding for new coal related-projects, from exploration through land-based transport and infrastructure to coal-fired power stations. KfW is also now disclosing its contribution to the international Sustainable Development Goals (SDGs) in full transparency. The focal points of promotion in 2019 were Sustainable Cities and Communities (SDG 11; EUR 28.8 billion), Climate Action (SDG 13; EUR 27.7 billion), Decent Work and Economic Growth (SDG 8; EUR 26.7 billion), and Affordable and Clean Energy (SDG 7; EUR 25.9 billion). We will further develop the management of KfW business with a view to the Paris Agreement and the SDGs.

We are also committed to our role as a transformative promotional bank, which includes supporting the Federal Government in implementing its Climate Action Programme 2030. We are preparing initiatives in the fields of industry, transport, buildings and energy, in consultation with the Federal Government.


As a promotional bank, we see it as our duty to provide support and help shape digitalisation in the economy and society. At the same time, however, we are driving KfW's digital transformation ahead, for instance in application and work processes, and in connecting to portals and platforms.

We expanded our promotional offering for digital projects in 2019; thus, our Smart Cities programme for sustainable digitalisation in municipalities was launched with great success. KfW is breaking new ground in the promotion of digital education with its flagship project TUMO Berlin, which involves opening a digital education centre for young people in Berlin, based on the highly successful TUMO project in Armenia. The start-up platform that we launched together with the Federal Ministry for Economic Affairs and Energy in 2018, has since had registrations from 80,000 people interested in setting up their own business, who now are receiving digital support in implementing their business ideas from more than 600 partners.

In order to further strengthen Germany as a business location, KfW is working together with the Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Finance to implement the coalition decision to create an investment fund for forward-looking technologies, primarily in the areas of digitalisation and climate technology, with a volume of up to EUR 10 billion.


Africa and Europe are neighbours, so Africa’s major challenges, such as rapid population growth, deficits in investment financing, and continuing climate change, are our challenges, too. On behalf of the German Federal Government, KfW is committed to ensuring new prospects for the continent, such as with new economic development tools. These include the “Africa Grow” umbrella fund, which provides additional growth capital in Africa, and the “Africa Connect” programme for companies that invest in Africa with a long-term interest and create positive added value at local level. The new Africa CIRR programme will finance large-volume German exports to Africa from 2020, with the goal of strengthening economic cooperation with Africa. KfW set a new record last year overall, with EUR 4.2 billion in new commitments for Africa, taking our Africa portfolio to around EUR 23 billion already.

Despite its many successes, 2019 was also a year of economic upheaval, providing a wide range of tasks for KfW, which will keep us busy beyond 2020. Although they are a challenge for us, we look forward to these tasks, as they will drive Germany, Europe and the world forward. We are optimistic about the future – not least due to the passionate commitment of our employees, whom we would like to take this opportunity to thank for their dedication.

Signatures of the Executive Board

Legal notice:
The information contained in this online Annual Report 2019 is based on KfW’s Financial Report 2019, which you can download here. Should this online Annual Report 2019, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2019 takes priority.