We support internationalisation – KfW IPEX-Bank
As a specialist financier, KfW IPEX-Bank is responsible for the business sector Export and project finance within KfW Group. The mandate of the legally independent group company is to support German and European companies on the global markets with tailored financing and thereby to secure domestic economic strength, employment and growth. The structuring of medium and long-term financing for key industrial sectors of the export economy, for economic and social infrastructure projects and for climate and environmental protection projects are at the core of the activities.
- Balanced risk/return ratio objective
- New commitment volume of EUR 13.8 billion
- Challenging market environment, keen competition and investment pressure also from institutional investors
Successful financial year 2017
Global demand for and financing of capital goods was stable in 2017, however with considerable regional weaknesses due to persistent political uncertainties and export sanctions regarding certain countries. The offering of large-volume export and project finance also remained characterised by keen competition, as credit institutions, and increasingly institutional investors, registered high liquidity and thus were subject to high investment pressure.
KfW IPEX-Bank focused on borrowers with good credit ratings, structuring well collateralised financings and supporting long-term customers during the year under review. In its global financings, KfW IPEX-Bank usually teams with other national and international banks in club or syndicated financing and as a structuring expert regularly plays a leading role. With its business, KfW IPEX-Bank underscores its position as a successful specialist financier for the German and European export economy.
KfW IPEX-Bank GmbH result
The business sector's operating result stood at EUR 581 million, which was lower than the prior year’s level (EUR 645 million). It largely comprised net interest and commission income, after deduction of administrative expenses, which rose slightly year on year. At the same time, total risk provisions declined in the reporting year. Although all recognisable risks continued to be measured conservatively, the total valuation only amounted to EUR 92 million (EUR 147 million), yielding a profit from operating activities that amounted to EUR 489 million (EUR 499 million).
The volume of lending of the Export and project finance business sector declined to EUR 61.9 billion at year-end 2017 (31 December 2016: EUR 69.4 billion). The primary reason for the decline was the depreciation of the US dollar against the euro, as around 45% of the bank's loans are denominated in US dollars.
Anniversary: 10 years of KfW IPEX-Bank
KfW IPEX-Bank has successfully operated on the market for ten years. It was spun off from KfW as a legally independent limited liability company (Gesellschaft mit beschränkter Haftung - GmbH) on 1 January 2008, and is responsible for KfW Group's export and project finance introduced back in the 1950s. The wholly-owned subsidiary of KfW now employs 680 staff.
KfW IPEX-Bank has established itself as a leading specialist financier in Germany and Europe since 2008. It offers structuring of medium and long-term loans to support key sectors in the export industry, to develop economic and social infrastructure, to support environmental and climate protection projects and to secure Germany's supply of raw materials. Since it was spun off, the bank has supported over 3,000 projects and issued new commitments totalling EUR 143.0 billion. With its earnings, KfW IPEX-Bank has made a substantial contribution to strengthening equity and thus the long-term promotional capacity of its shareholder KfW over the past ten years.
“Immediately after our bank was spun off in 2008, it faced the turbulent developments of the financial market crisis and stood its ground. We have reliably supported companies in global competition through tailored financing of German and European exports and investments and thus contributed to securing domestic economic strength, employment and growth.”
Klaus R. Michalak, Chairman of the Management Board of KfW IPEXBank
“For one thing, KfW IPEX-Bank fulfils an important part of KfW's legal mandate, namely offering export and project finance in the interest of the German and European economy, and, for another, it makes a substantial contribution with its earnings to securing KfW's long-term promotional capacity,” emphasized the responsible KfW Executive Board member Prof. Dr Joachim Nagel, on speaking about the subsidiary's importance to KfW.
Outlook: KfW IPEX-Bank is planning to continue pursuing its focused business model and positioning itself on the international market as a special finance provider and relationship bank. In the process, it concentrates on the close working relationship with market partners and active efforts in structuring tailored syndicated financings.
The information contained in this online Annual Report 2017 is based on KfW’s Financial Report 2017, which you can download Should this online Annual Report 2017, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2017 takes priority.