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Sustainable promotion – for 70 years

Dear readers,

This annual report comes out in a very special year for KfW. 70 years ago, KfW was established on 18 November 1948. It was the first public sector bank after the Second World War and was intended to finance the reconstruction of Germany using funds from the Marshall Plan. Today, we look back with pride on our exciting and successful history of promotional work.

Whether with the reconstruction of the countless flats and houses destroyed in the war, with the start of development financing at the beginning of the 1960s and SME promotion in the 1970s, with the reconstruction of the East in the 1990s, with financing the energy transition since 2012 or with the programme for overcoming the refugee crisis in 2015 – since being founded, KfW has always looked to the future and promoted people, countries and institutions that think one step ahead and lead the way. To provide them with the funds necessary for this, in its seven decades of existence KfW has issued more than EUR 1 trillion in loans.

Successful promotional year 2017

The experience that KfW has gained over its 70 years of existence is in demand today – in Germany and internationally. As a bank committed to responsibility, this inspires and motivates us to champion better living conditions in Germany and worldwide.

2017 was a good and successful promotional year. For us, our promotional mandate and promotional impact are the focus. When the financing environment and general macroeconomic conditions are as good as they are at present, we as a promotional bank concentrate more on areas of particular relevance to the future, such as innovation, digitalisation and energy efficiency in Germany, as well as the sustainable improvement of living conditions in the partner countries of our Financial Cooperation.

In Germany, 2017 was a year of strong economic development, combined with a continued positive financing environment. This is why KfW, as planned, scaled back its promotional business slightly in 2017, reaching a total business volume of EUR 76.5 billion (2016: EUR 81.0 billion). It reduced its promotion for commercial, private and public investors by around 6% to EUR 51.8 billion.

International business reached a volume of EUR 23.5 billion (2016: EUR 24.9 billion) and was marked by a significant increase in commitments in Financial Cooperation with developing and emerging countries, which amounted to EUR 8.2 billion (2016: EUR 7.3 billion). Export and project finance reached a volume of business of EUR 13.8 billion (2016: EUR 16.1 billion) in a highly competitive environment.

As in previous years, KfW continued to focus its promotional activities in 2017 on qualitative targets such as support for climate change mitigation and environmental protection. The percentage of financing of projects in the area of green finance, for example, rose from 31% in 2010 to its current level of 43%. KfW also consequently continues to foster sustainability on the capital market, for example, through its increased involvement in the green bond sector or the even stricter orientation of its sustainable investment approach in its liquidity portfolio.

Just as important as green finance for KfW is support for small and medium-sized enterprises in investment finance. Roughly 52,000 start-ups and SMEs benefited from KfW funding in 2017. Overall, the ratio of KfW financing related to SMEs was 44% in 2017 (2016: 41%).

By investing in securitisation transactions and green bonds, the Financial markets business sector contributed a total of EUR 1.5 billion in 2017 (2016: EUR 1.3 billion) to the promotion of SMEs and financing for climate change mitigation and environmental protection.

KfW supported climate action through its green bond portfolio in 2017, buying green bonds with a volume of around EUR 350 million. Each EUR 1 million investment in green bonds reduces greenhouse gas emissions by 800 tonnes per year.

KfW is also strongly committed to refugee-related projects. The KfW Development Bank business area currently has 117 ongoing projects relating to refugees in 28 different countries with an overall volume of over EUR 3 billion. A total of EUR 1.2 billion of new commitments were granted for this purpose in 2017. The regional focus of involvement is the Middle East.

In order to fund its promotional business, KfW raised EUR 78.2 billion in the international capital markets in 2017. For 2018, KfW is planning a funding volume of EUR 70-75 billion.

Annual result 2017

The earnings position remained very satisfactory in financial year 2017. As expected, the consolidated profit of EUR 1.4 billion fell short of the high prior-year figure (EUR 2.0 billion), which had been boosted by non-recurring effects. However, it was still considerably above the long-term earnings potential. The operating result before valuation (before promotional expense) was down on the previous year at EUR 1.7 billion (2016: EUR 1.9 billion).

The valuation result made a positive and larger-than-expected contribution to consolidated profit. In net terms, however, it was down year-on-year. This was due in part to the increased though still substantially lower-than-planned net charges from risk provisions for lending business. In part it was also due to negative exchange rate-induced effects in the equity investment portfolio affecting the valuation result.

KfW’s domestic promotional expense in financial year 2017, which has an impact on the group’s earnings position, remains at a comparatively low level at EUR 213 million (2016: EUR 230 million) in the continuing low interest rate environment.

The group's total assets were EUR 472.3 billion as of 31 December 2017 and thus EUR 34.7 billion below the previous year's figure (2016: EUR 507.0 billion). This decline was attributable to a reduction of EUR 24.9 billion in the carrying amount of derivatives used for hedging purposes and a decrease of EUR 11.3 billion in liquidity held (EUR 33.8 billion).

Outlook 2018

70 years of sustainability

The focus on sustainability has always been one of KfW's key features – in business, in its operations and as an employer. As far back as the end of the 1950s, KfW financed its first environmental protection measures, which was then still a relatively unknown topic. Today, KfW is one of the most important players in environmental and, in particular, climate financing both nationally and internationally: around EUR 280 billion have gone to this key area in the past ten years.

KfW takes account of the highest environmental and social standards in its financing, not least to set an example for the market. The strengthening of KfW's position as a sustainable promotional bank is an important objective for the next few years. KfW acknowledges its responsibility for social issues and the environment, and is in intensive dialogue with its stakeholders in this regard.

Venture capital

KfW will substantially expand its activities in the field of venture capital in the next few years. It will found a subsidiary for this purpose in 2018. This goes back to a joint initiative by the German Federal Ministry for Economic Affairs and Energy (BMWi), the German Federal Ministry of Finance (BMF) and KfW. The new venture capital company will in future pool and expand KfW's financing offering in the field of venture capital (VC).


Digitalisation is a challenge for all banks – including KfW. We see supporting SMEs in digitalisation as a core topic. In addition, we want to continue our involvement in the expansion and promotion of digital infrastructure. We also want to focus on the expansion of blockchain technology, both in the area of funding and, in particular, in Financial Cooperation for which KfW's Digital Office has developed its own approaches in the past year. Pilot projects have started. Moreover, KfW supports the expansion of its digital platforms, for example the grant portal for private builders or, most recently, the start-up platform (“Gründerplattform”) where business founders will be able to obtain help during the whole founding process.


KfW's promotional expertise is in demand not just in Germany, but throughout Europe. KfW is involved in the EU investment plan for Europe and works closely together with the EIB Group and other national promotional banks in the EU. Moreover, KfW also deploys European promotional funds in development financing and thus together with its partners supports the implementation of the ambitious goals of the Paris Agreement on climate change and the combating of the causes of refugees leaving developing countries. Further strengthening this collaboration, including between Germany and France, is very important to us.

Development cooperation

Global challenges, such as combating poverty, climate protection and mitigating refugee crises, are growing – and therefore so are the tasks of the business area KfW Development Bank, which finances development projects worldwide on behalf of the German Federal Government. Due to its promotional experience in Germany, its regional presence and expertise, KfW is a popular partner for further developed countries and other national development banks as well. We expect further growth of the KfW Development Bank business area.


KFW has launched a modernisation programme to ensure its long-term promotional capacity. This includes not only digitalisation but also implementing supervisory requirements. Since 2016, key banking supervision standards as set out by the German Banking Act (Kreditwesengesetz – “KWG”) and the European Capital Requirements Regulation (“CRR”) have been applicable mutatis mutandis to KfW. The bank has also included the topic of “regulation” in its strategic objectives. KfW thus pursues a holistic management approach in order to be able to comprehensively identify, assess and communicate effects of current and new regulatory projects within the bank.

IT modernisation

KfW is responding to the continuous increase in security and regulatory requirements for banks by comprehensively modernising its IT system. The individual elements of the IT modernisation programme are handled in part through major projects, achieving further progress in 2017. These incorporate new supervisory requirements and findings.

KfW continued to demonstrate in 2017 the important role it assumes for environmental protection, business and society as a modern, efficient and customer-oriented promotional bank. It has made sustainable promotion its guiding principle and helps to ensure that the challenges of our time can be mastered successfully, while strictly adhering to the subsidiarity principle. KfW takes responsibility as a reliable partner – in Germany, Europe and around the world. This strength is also thanks above all to the bank's staff. In this anniversary year too, we would like to thank them very much for their dedication and passionate commitment. 18 November 2018 is, above all, their celebration.

Legal notice:
The information contained in this online Annual Report 2017 is based on KfW’s Financial Report 2017, which you can download here. 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.

Dachterrasse der KfW Frankfurt. Blick auf das KfW-Logo des angrenzenden Gebäudeteils.
KfW at a Glance

KfW is one of the world’s leading promotional banks. With its decades of experience, KfW is committed to improving economic, social and ecological living conditions across the globe on behalf of the Federal Republic of Germany and the federal states.

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