We support internationalisation – KfW IPEX-Bank
KfW IPEX-Bank is responsible for international project and export financing within KfW Group. As a specialist bank, it supports German and European export companies in the global markets with tailor-made financing solutions, thereby safeguarding domestic economic strength, growth and employment. KfW IPEX-Bank's core product is the structuring of medium and long-term financing for key industrial sectors of the export economy, the expansion and maintenance of economic and social infrastructure and sustainable support for climate and environmental protection projects worldwide. KfW IPEX-Bank is operated as a legally independent group company and is represented locally in the most important economic and financial centres throughout the world.
- New commitment volume in 2018 of EUR 17.7 billion
- Challenging and dynamic market environment
- Balanced risk/return ratio
Successful financial year 2018
The Brexit negotiations, the euro area’s economic performance, impending trade wars and the growth slowdown in some emerging economies – all of this made global markets challenging in 2018 as well. Nevertheless, demand for capital goods and their financing remained stable, albeit with noticeable regional weaknesses. The offering of large-volume project and export financing was characterised by keen competition, as credit institutions and institutional investors registered high liquidity and were thus subject to high investment pressure.
In this market environment KfW IPEX-Bank's focus last year was primarily on supporting long-term existing customers as well as borrowers with good credit ratings, and on structuring well-collateralised financing. KfW IPEX-Bank mainly acted as a partner in club or syndicated financing together with other national and international banks in the financing transactions concluded in financial year 2018. It regularly underscored its financial and industry expertise by assuming leading roles. The new commitments concluded in 2018 reaffirm that, once again, KfW IPEX-Bank was one of the world’s leading specialist banks for German and European exports in 2018.
KfW IPEX-Bank GmbH 2018 results
KfW IPEX-Bank can look back on a very successful 2018 with regard to the financial result of the Export and Project Finance business sector. The main driver of this success was the valuation result. While net interest and net commission income declined year-on-year and administrative expense rose slightly, the operating result before valuation at EUR 483 million was thus below the previous year's figure (EUR 581 million) – the valuation result led to a very good result overall for the business sector. Despite the continued conservative assessment of all identifiable risks, a positive valuation result (EUR 89 million; previous year: EUR -92 million) was recorded, meaning that the profit from operating activities increased to EUR 572 million (previous year: EUR 489 million).
The volume of lending of the Export and Project Finance business sector increased to EUR 66.6 billion at year-end 2018 (previous year: EUR 61.9 billion). The main reasons were the above-average commitment volume in 2018 and the change in the EUR/USD exchange rate compared with the end of the previous year, as around 45% of the bank's loans are denominated in US dollars.
Ship financing – KfW IPEX-Bank takes the “green route”
KfW IPEX-Bank is one of Germany's leading banks for ship financing. In the past financial year it consolidated its position with a new commitment volume of EUR 2.3 billion. In this leading role, the bank also assumes responsibility for the implementation of sustainable projects in the maritime sector, in particular in increasing ship operation efficiency and reducing emissions.
In so doing, KfW IPEX-Bank and market participants are focusing not only on new construction business, as the supply industry in particular can benefit from the trend towards “green” shipping. LNG, electric drives, fuel cells, retrofits and sustainable scrapping – the market is undergoing a rethink, shipping companies are increasingly using innovative solutions to meet new legal requirements for environmental protection and to meet their responsibilities.
But KfW IPEX-Bank also wants to play an active role in determining the direction. In 2018, it was the first German bank to join the “Responsible Ship Recycling Standards” initiative. Its loan agreements will include a clause on environmentally friendly scrapping of ships in the future. The initiative has had eight members worldwide to date.
The information contained in this online Annual Report 2018 is based on KfW’s Financial Report 2018, which you can download Should this online Annual Report 2018, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2018 takes priority.