KfW Reporting Portal

At the same time, 2023 was a year of normalisation and focusing of our business. After having faced particularly tough challenges in previous years in cushioning the economic consequences of the coronavirus pandemic and of the Russian attack on Ukraine, we were able to leave the path of acute crisis aid last year and focus more strongly again on strategic investments – for example for a resilient and competitive energy system.

2023 was also a year of implementing important goals in our strategic action areas of climate and environment as well as digitalisation and innovation. An example of this is the final closing of the Growth Fund in November 2023, which is an important component of the Future Fund managed by KfW Capital. The launch of the Growth Fund represents a milestone in the further development of the ecosystem for growth financing of young technology companies in Germany, as it is one of the largest venture capital fund of funds ever launched in Europe; it is mainly funded from private sources.

KfW has also achieved other important successes in the modernisation and digitalisation of its promotional business. For KfW’s customers, this was most noticeable with the opening of the digital customer portal meine.kfw.de. For the first time, they were able to prepare their loan applications digitally or apply for a grant by themselves in individual funding programmes. This creates an essential prerequisite for the efficient implementation of grant programmes in the future, in particular, subsidies with high volumes – such as the promotion, launched 27 February 2024, for heating systems on the basis of renewable energies in accordance with the Building Energy Act. At the same time, this brings KfW a significant step closer to its goal of becoming the digital transformation and promotional bank.

KfW new business volume remains at a high level

2023 was another very strong promotional year. At EUR 111.3 billion, new business volume was the third highest since 2020 (2022: EUR 166.9 billion). The downturn of EUR 55.6 billion compared to the exceptional year 2022 is primarily due to the decrease in crisis-related mandated transactions which mainly served to stabilise the energy supply, and thus reflects a normalisation process.

This also characterises new business in Germany, which reached a volume of EUR 77.1 billion (2022: EUR 136.1 billion). In addition to the declining mandated transactions, the significantly lower commitments in the Federal Funding for Efficient Buildings also had an impact. Here, the switch from broad-based promotion to focused promotion with more demanding promotional conditions led to a downturn to EUR 16.1 billion (2022: EUR 37.4 billion). New commitments in the promotional focus area of climate and environment amounted to EUR 11.2 billion.

KfW IPEX-Bank, which is responsible for the Export and project finance business sector, recorded an increase of 33% in new commitments amounting to EUR 24.2 billion (2022: EUR 18.1 billion), the highest volume in its history. In this way, it made an outstanding contribution to supporting the German and European economy in a market environment still strongly characterised by challenges. This was achieved in particular by financing a number of onshore and offshore wind farms, photovoltaic systems as well as projects for battery cell production, the production of green hydrogen and green steel to transform the economy.

KfW Capital’s commitments to start-ups and young, innovative technology companies in Germany increased significantly by 69% in 2023 to around EUR 2.1 billion (2022: EUR 1.3 billion).

Commitments in the promotion of developing countries and emerging economies reached a volume of just under EUR 10.9 billion. KfW Development Bank accounted for around EUR 9 billion. Despite ongoing global crises, the promotion of a sustainable transformation remains the focus of Financial Cooperation. KfW Development Bank supported projects in the area of climate and environmental protection with EUR 6 billion in 2023, which corresponds to a share of 67% of total new commitments. In the context of global climate action, the expansion of the German-Indian solar partnership with EUR 200 million and support for the environmentally sustainable and socially compatible reform of the energy sector in South Africa amounting to EUR 500 million should be highlighted. Under globally challenging conditions, DEG achieved a record volume of EUR 1.9 billion from its own funds (2022: EUR 1.6 billion) made available for private investments in developing countries and emerging economies. It was able to mobilise a further EUR 613 million from investors.

KfW Group consolidated earnings 2023

KfW generated consolidated profit of EUR 1.6 billion in the 2023 financial year. This resulted from a strong operating result, characterised by an increase in interest income. Despite the geopolitical and macroeconomic uncertainties, the valuation result contributed positively to the group’s consolidated earnings. At EUR 371 million, promotional expense reached the highest value in the last ten years as the low-interest period had passed.

Risk-bearing capacity remains at a very high level

At the end of 2023, the regulatory equity ratios remained at a very good level with a total capital ratio and a (common equity) tier 1 capital ratio of 27.9% each, and thus significantly above the bank’s overall regulatory requirement and risk strategy objectives. Compared to 2022, the ratio increased by around 2.8 percentage points, which is due both to the reduction in the total risk exposure amount and to the increase in regulatory capital compared to the previous year (31 December 2022: total capital ratio 25.2%, (common equity) tier 1 capital ratio 25.0%).

Business policy priorities in 2024

In a geopolitical and economic environment that continues to be turbulent and characterised by crises, we will set three priorities in our business policies for 2024:

1. With the financial support of the German Federal Government, we will make an effective contribution to the creation of sustainable and affordable housing.

2. In 2024, we will continue to strengthen both German SMEs and thus the backbone of our economic model, as well as the start-up scene as an essential factor of our future economic model.

3. On behalf of the German Federal Government, we are also contributing internationally to protecting our planet and improving the living conditions of people in those countries that are particularly affected by the consequences of climate change and the unequal distribution of wealth.

In addition, we will continue to drive our own realignment. The focus here is, on the one hand, on mobilising private capital as an indispensable prerequisite for achieving the climate targets we have set for ourselves. On the other hand, we will continue to focus our financing on the 1.5-degree target. An essential element of this is the improved impact measurement of our promotion, which we are making great efforts to achieve.

KfW has a clear set of values

The crises of recent years, the increasing number of violent conflicts and also the challenges of the necessary sustainable change lead to uncertainties and increasingly difficult controversies in our society, too. We are concerned to see how anti-democratic, inhumane and extremist positions are increasingly finding their way into the centre of society.

KfW has a clear set of values. As Germany’s large, globally active promotional bank, we are represented in around 80 countries around the world. People of many languages and cultures have worked closely with us for many years. Diversity and openness are at the core of our identity. We know from our 75 years of experience that diversity, openness and democracy are essential prerequisites for a good future. Therefore, the free and democratic basic order is and will remain the basis of our actions.