Financial year 2015: KfW's promotional business rises to EUR 79.3 billion due to strong demand
Frankfurt am Main (ots) -
- Commitments up by 6.0% to EUR 50.5 billion
- Increase in international financing to EUR 27.9 billion (+9.7%)
- High demand for climate and environmental financing amounting to
EUR 29.5 billion (+11.0%)
- Refugee accommodation promoted with EUR 1.5 billion
- Commitment in the venture capital sector newly structured and
KfW Group registered very strong demand for its financing products
in financial year 2015. The volume of new promotional commitments
rose to a total of EUR 79.3 billion (2014: EUR 74.1 billion, +7.0%).
Domestic promotional business developed positively relative to the
previous year, achieving a commitment volume of EUR 50.5 billion
(2014: EUR 47.6 billion, +6.0%). This provided impetus for growth to
the German economy. The increase can be attributed both to rising
demand for financing from the commercial sector and strong demand for
At EUR 27.9 billion, the volume of international business was 9.7%
higher than in the prior year (2014: EUR 25.5 billion). In
particular, there was a high level of demand for financing from KfW
IPEX-Bank as a specialist in export and project finance. KfW
Development Bank again recorded a large share of climate and
environmental finance, above all in the financing of
environmentally-friendly energy generation and supply.
As in previous years, KfW Group further consolidated its role as
global leader in climate and environmental finance with financing
commitments totalling EUR 29.5 billion (2014: EUR 26.6 billion,
"2015 was a very successful promotion year. With its promotional
products, KfW played an important part in the modernisation of
Germany and its social cohesion. We shall again be offering specific
measures in 2016. In the years ahead, we will be providing two
billion euros via the promotional institutions of the federal states
for the construction of social housing", said Dr Ulrich Schröder,
Chief Executive Officer of KfW Group.
KfW is supporting the German Federal Government, the federal
states and municipalities in terms of refugee aid. The integration of
international and domestic promotional activities is an important
factor here. The special "refugee accommodation" facility launched in
early September 2015 en-abled KfW to very rapidly make an important
contribution to helping German municipalities accommodate refugees.
The programme volume was swiftly increased from EUR 300 million to
EUR 1.0 billion due to consistently high demand, and was finally
topped up to a total of EUR 1.5 billion on 20 January 2016. This
amount, which was already fully allocated in January 2016, will
provide accommodation for up to 150,000 people.
"Never before in KfW's history has a financing offer taken effect
as quickly as its "refugee accommodation" extraordinary promotion. No
promotional programme has ever been so rapidly implemented and
exhausted", Dr Schröder explained.
Internationally, the KfW Development Bank business area currently
has about 70 ongoing projects relating to refugees in 20 countries
with an overall volume of EUR 1.4 billion. A total of around EUR 570
million in new commitments is going to 38 projects that are providing
direct support for the towns and villages taking in refugees in
The digitalisation of the promotional business has made
significant progress. One of the priorities here is to expand the
"Bankdurchleitung Online 2.0" (BDO 2.0) promotional funding platform.
In the housing promotional area, every second loan commitment is
already made online in just a few seconds. With its digitalisation
approach, KfW is systematically pursuing the aim of simplifying,
standardising and automating its application and commitment
processes. By the end of 2015, all financing partners had connected
to the KfW promotional funding platform or were about to do so.
Relevant financial intermediary platforms, as well as the promotional
institutions of the federal states, are gradually being connected.
The cornerstone for the processing of commercial products via BDO 2.0
was also laid in 2015.
Details on the business sectors' promotional results
As part of its implementation of the "Juncker plan", KfW has
signed two guarantee agreements with the European Investment Fund
(EIF) within the SME window of the European Fund for Strategic
Investments (EFSI). These allow for new loans totalling EUR 1.5
billion for young companies, start-ups and innovative companies. More
financing and cooperation with the involvement of the EFSI is
planned. Within the framework of its capital-market based SME
financing activities, KfW is also involved in the European
securitisation market. For the first time, KfW worked together with
Cassa Depositi e Prestiti (CDP) and the EIF to provide financing for
European SMEs by means of an Italian securitisation of lease
receivables. This may well constitute a model for future closer
cooperation between European promotional institutions, whose
expansion has been another main focus of KfW's work in recent years.
"KfW is aware of its responsibilities towards the European
unification process. The contribution we make strengthens economic
development not only in Europe but here in Germany too", stated Dr
The volume of new business in the Mittelstandsbank business sector
last year amounted to EUR 20.4 billion (2014: EUR 19.9 billion).
Demand for promotional loans on the part of companies proved to be
far more robust overall than the year before.
With a promotional business volume of EUR 9.3 billion (2014: EUR
8.2 billion), the environment priority sector achieved strong growth
in 2015. A EUR 3.8 billion volume of new business in the field of
energy efficiency represents a very good result (2014: EUR 3.2
billion). A distinctly positive market response to the substantially
improved energy efficiency programme launched in July contributed
significantly to this. At EUR 4.5 billion, the KfW Renewable Energies
Programme exceeded the figure for the previous year (EUR 4.1
billion). In 2015, KfW thus again made an important contribution
towards achieving national environmental and climate targets.
A very strong result (EUR 3.7 billion) was achieved for the
priority sector of start-ups (2014: EUR 2.8 billion). For the first
time, the volume of new business for the promotion of start-ups was
well in excess of EUR 3.0 billion. This was driven in particular by
two factors: the expansion of the product range implemented in late
2014 and the attractive interest conditions.
In part thanks to low prevailing interest rates, commitments in
the field of innovation financing came to EUR 0.8 billion (2014: EUR
1.4 billion). Innovation financing was significantly strengthened by
the new strategic approach in equity finance. In the years to come,
KfW will be supplying up to EUR 400 million to German and European
venture capital funds via the new ERP Venture Capital Funds
Investments. In total, this new form of equity finance will enable
KfW to leverage as much as EUR 2.5 billion in private capital for
innovative start-ups over the next few years.
Commitments in the area of general corporate financing declined to
EUR 6.6 billion (2014: EUR 7.6 billion). Decreased demand for the
Entrepreneur Loan, which had proved extremely popular in 2014, was
the decisive factor behind this.
New commitments in the Kommunal- und Privatkundenbank /
Kreditinstitute business sector amounted to EUR 30.1 billion (2014:
EUR 27.7 billion) - a record figure even on a long-term comparison.
At EUR 16.5 billion (2014: EUR 14.3 billion), the housing key
priority sector recorded the strongest growth. The continued
robustness of the construction sector was the reason for this.
With a commitment volume of EUR 5.0 billion (2014: EUR 4.0
billion), infrastructure financing also experienced strong growth.
Alongside demand that was in any case good, the special "refugee
accommodation" facility provided particular growth stimulus here.
The previous year's level was maintained in the priority area of
education and social development, with a commitment volume of EUR 2.6
billion (2014: EUR 2.6 billion). At EUR 4.7 billion, the contract
volume in the general funding of promotional institutions of the
federal states slightly exceeded that of the previous year (2014: EUR
4.6 billion). In individual financing banks a commitment volume of
EUR 1.3 billion (2014: EUR 2.2 billion) was achieved with the funding
of export loans and granting of global loans.
The Capital markets business sector adopted new approaches to
promotion in 2015. New commitments in connection with promotional
activities on the capital market for SME and environment financing
stood at EUR 1.1 billion. For 2016, KfW aims to make EUR 1.0 billion
worth of investments in securitisation transactions and will continue
to play an active role in the European securitisation market. With
the green bond portfolio launched in 2015, we are adding a new
capital market instrument to our financing for environmental and
climate protection. At the end of 2015, the investments for this
portfolio stood at EUR 281 million and it is planned to increase this
to EUR 1.0 billion over the coming years.
In the Export and project finance business sector, handled by KfW
IPEX-Bank, new business commitments of EUR 20.2 billion were achieved
(2014: EUR 16.6 billion). This was boosted in particular by the
sector departments Maritime Industries (EUR 3.6 billion), Power,
Renewables and Water (EUR 3.2 billion) and Aviation and Rail (EUR 2.8
billion). A major portion of KfW IPEX-Bank's financing activities in
Maritime Industries can be attributed to cruise ships, those in the
Power, Renewables and Water sector department mainly to onshore and
offshore wind farms and to a number of combined cycle power plants.
The very good new business in the Aviation and Rail department is
principally attributable to several larger financing deals for rail
projects. This too underscores KfW IPEX-Bank's ambition to make a
significant contribution to environmental and climate protection.
The clear increase year-on-year is the result of an accumulation
of extraordinary effects, including in particular high-volume
individual transactions such as six cruise ships and bank refinancing
in the maritime sector alone. Additionally, the development of the
USD-EUR exchange rate overstated the commitment volume as compared to
previous years by about EUR 1.0 billion. Alongside the increase in
new business volume, collaboration in syndicates with partner banks
continued to gain in importance.
KfW Development Bank is maintaining its new commitments at a high
level. Last year, roughly EUR 6.7 billion was provided on behalf of
the German Federal Government for development programmes throughout
the world, the second-highest amount ever aside from the record year
2014 (EUR 7.4 billion). A considerable part of the new commitments
(EUR 955 million) went to the crisis-ridden North Africa / Middle
East region. More-over, almost 60% of new commitments were issued for
projects and programmes in the field of climate and environmental
In 2015, KfW's subsidiary DEG committed about EUR 1.1 billion
(2014: EUR 1.5 billion) for the financing of investment of private
companies in developing and emerging countries. Given the politically
and economically challenging trends in important target markets,
DEG's new business in 2015 was focused on financings with a good risk
return profile and a high degree of relevance to development. The
priority areas here were financings in Africa and other future
markets as well as SMEs: EUR 632 million or 60% of new commitments
were made to SMEs, while Africa and other future markets received
commitments totalling EUR 566 million, equivalent to a 53% share.
To fund its promotional business, KfW in 2015 raised funds
amounting to EUR 62.6 million on the international capital markets in
a volatile market environment. It issued 175 bonds in 14 currencies,
of which 82% was in the core currencies EUR and USD. This was the
first time the USD accounted for the lion's share (45% or EUR 28
billion). KfW also issued five Green Bonds in EUR, USD, AUD, GBP and
SEK, in total equivalent to EUR 3.7 billion. In 2016, KfW will be
continuing its established issuing strategy; at EUR 70 billion to EUR
75 billion, funding needs will be higher than last year.