Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

1st half of 2011: Continued strong demand for KfW financing

11.08.2011
- Promotional business volume stabilised on a high level
- Export and project financings picked up
- Operating result continues to be positive
- Dr Schröder: "In the second half-year our spotlight will be on the energy turnaround."

In the first half of 2011, KfW Bankengruppe achieved a promotional business volume of EUR 40.6 billion (after EUR 41.9 billion in the first half of 2010). The greatest portion, EUR 30.3 billion (first half of 2010: EUR 36.7 billion) went to the promotion of the German economy.

This decline in domestic lending after the phase-out of the economic stimulus programmes is in line with expectations and reflects the subsidiary role of KfW as a promotional bank. However, if we look at the promotion of small and medium-sized enterprises without the economic stimulus programme (KfW Special Programme), then the volume of commitments is stable at EUR 10.9 billion, on a similar level as at the end of the first half of 2010 (EUR 11.6 billion).

KfW's international business developed very positively, contributing EUR 10.3 billion (EUR 5.2 billion) to the half-year result. The new commitments of KfW IPEX-Bank accounted for a significant share of this result, acting as a sort of indicator of the strong growth of the export industry. Cooperation with developing and transition countries also reached a high volume of commitments of EUR 2.0 billion (EUR 2.3 billion).

"In the second half, KfW will further expand its commitment in climate and environmental protection and in this way support the German energy turnaround. Its implementation is a task for the whole nation in which we cannot be successful without financial effort", said Dr Ulrich Schröder, Chief Executive Officer of KfW Bankengruppe.

As an important building block for this, the KfW Offshore Wind Energy Programme, in which enterprises have expressed strong interest, was launched already in June. The first agreement for the financing of a wind farm off the coast of Helgoland was signed last week.

The consolidated profit, which includes IFRS effects from hedging, was EUR 1,764 million (EUR 980 million), a new historic high. The consolidated profit before IFRS effects from hedging* also reached a sizeable volume of EUR 1,173 million (EUR 1,335 million), a continuation of the positive development of the first quarter.

"2011 will again be an exceptional year for KfW. We are pleased with this half-year result, which forms an important basis for our further work but is clearly above our sustainable earnings potential and cannot be continued into the second half. The earnings situation secures KfW's long-term promotional capabilities - also with a view to Basel III and the more difficult economic conditions posed by the sovereign debt situation", said Dr Schröder.

The operating result before valuations was on a high level of EUR
982 million and higher than expected, but below last year's outstanding level of EUR 1,126 million. This good result was again mostly due to the high net interest income of EUR 1,224 million (EUR 1,348 million), which is mainly a result of the continuing low interest rates in the short-term segment. Interest rate reductions totalled EUR 280 million, slightly more than in the first half of 2010.

Risk provisions for lending business were reduced by a net total of EUR 169 million on the basis of the continuing economic recovery that was particularly evident in individual business segments of export and project finance. Charges of EUR 64 million had still been incurred in the same period in 2010.

The equity investment and securities portfolio yielded a positive effect of EUR 8 million (EUR 155 million) despite charges of EUR 99 million from the write-down of Greek government bonds - with a nominal volume of EUR 249 million - to their market value. Against 31 December 2010, hidden obligations under securities reduced significantly by EUR 179 million to EUR 716 million.

The purely IFRS-related effects from the valuation of derivatives used for hedging purposes amounted to EUR 592 million (expenses of EUR 355 million), increasing the valuation result considerably. This was mostly caused by reversal effects from the previous years and by opposing interest rate and currency developments.

The results of KfW's promotional activities in detail

As expected, in the business area KfW Mittelstandsbank the volume of new business was lower than in the first half of 2010, at EUR 11.6 billion (EUR 16.4 billion). This was primarily due to the phase-out of the economic stimulus packages, particularly the KfW Special Programme, at the end of 2010. As a result, the volume of commitments in the priority area of business start-ups and general corporate finance fell from EUR 8.8 billion to EUR 5.8 billion. In the area of innovation finance, in turn, commitments increased from EUR 1.4 billion to EUR 1.7 billion. In the priority area of environmental protection finance the promotional business volume dropped from EUR 6.2 billion to EUR 4.1 billion. This was due to a decline in the demand for loans from the KfW Renewable Energies Programme to finance photovoltaic installations. Here commitments again returned to normal after the record volume of 2010 following the reduction of the feed-in tariff under the Renewable Energy Sources Act. On the other hand, demand for loans under the ERP Environmental Protection and Energy Efficiency Programme was significantly higher than in the same period last year.

In the business area KfW Privatkundenbank, the volume of commitments was EUR 8.4 billion, slightly below the level of the first half of 2010 (EUR 9.5 billion) as a result of pull-forward effects that occurred last year. Commitments and investment grants under the housing programmes totalled EUR 7.5 billion. Here the focus is on the promotion of energy-efficient and barrier-free homes (EUR
3.1 billion) and the formation of home ownership (EUR 3.4 billion).
The increase in applications received reflects the positive trend in the construction of new homes. In education finance the volume of commitments rose slightly to around EUR 890 million.

In the business area KfW Kommunalbank the financing of infrastructure reached a volume of commitments of EUR 1.9 billion, exceeding the volume of the same period last year (EUR 1.7 billion). A very positive business development was especially evident in the basic programmes for the promotion of municipal investments. Demand by municipal and social enterprises in particular was significantly stronger than in the same period last year. In the business of general refinancing for promotional institutions of the federal states, KfW recorded a contract volume of just under EUR 8.4 billion.

In the business area of export and project finance, which KfW IPEX-Bank handles within KfW Bankengruppe, new business commitments totalled EUR 6.5 billion in the first half-year (EUR 3.0 billion). Energy and the environment were an important driver for growth, accounting for EUR 1.1 billion (EUR 0.5 billion). This positive development was also supported by the areas of shipping, with EUR 1.2 billion (EUR 0.5 billion) as well as aviation and rail transport, also with EUR 1.2 billion (EUR 0.3 billion). In addition, KfW IPEX-Bank provided EUR 1.9 billion for bank funding under the ship financing CIRR, which is agency business conducted for the Federal Government.

In the German securitisation market KfW expects business to stabilise on the previous year's level in 2011. KfW's commitments in the area of asset securitisation and capital market-related products were moderate in the first half-year, amounting to EUR 0.2 billion (EUR 0.3 billion).

KfW Entwicklungsbank committed some EUR 1.6 billion (EUR 1.8 billion) in the business area promotion of developing and transition countries. KfW contributed EUR 943 million in own funds to development cooperation. The financing volume of DEG was EUR 411 million, a similar volume as in the first half of 2010 (EUR 409 million). Nearly half the new commitments were for projects in the financial sector.

As at 31 July 2011, KfW raised long-term funds for the equivalent of EUR 57.5 billion in the international capital markets. This was just under 72% of the annual funding requirement, which has recently been increased to EUR 80 billion.

*Explanation of consolidated profit before IFRS effects from hedging: Under IFRS, derivatives must be recognised at fair value in the balance sheet even if they are not used for trading, as in the case of KfW, but to hedge interest and currency risks. The opposing valuation effects of the underlying on-balance transactions thus hedged can be reported only inadequately under IFRS and therefore lead to economically inappropriate temporary earnings effects in KfW's income situation. These effects offset each other in total in the course of the overall maturity of the hedged items.

Service: An overview of the business and financial figures of KfW Bankengruppe is available for download at Newsroom/Materials for the press/Presentations and business figures.

Pressekontakt:
KfW, Palmengartenstraße 5-9, 60325 Frankfurt Kommunikation (KOM) Tel. 069 7431-4400, Fax: 069 7431-3266,

E-Mail: presse@kfw.de

| presseportal
Further information:
http://www.kfw.de

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

A Map of the Cell’s Power Station

18.08.2017 | Life Sciences

Engineering team images tiny quasicrystals as they form

18.08.2017 | Physics and Astronomy

Researchers printed graphene-like materials with inkjet

18.08.2017 | Materials Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>