Promotional year 2018: KfW places promotional focus on digitalisation, sustainability and Africa

Frankfurt (ots) -

- Total promotional business volume reaches EUR 75.5 billion
- Growth in international business up strongly by +20%
- EUR 46 billion for domestic promotion
- Successful start of KfW Capital
- High demand for newly introduced Baukindergeld

KfW achieved a total volume of EUR 75.5 billion in the 2018
promotional year (2017: EUR 76.5 billion). Financing of EUR 46.0
billion was committed for domestic promotion. In light of the robust
economic growth and good financing conditions for private and
commercial investors, KfW thus scaled back its promotion (2017: EUR
51.8 billion).

However, segments that provide impetus for the future were
expanded. For example, the ERP Digitalisation and Innovation Loan
reported significant growth amounting to EUR 2.9 billion (2017: EUR
1.5 billion). The subsidiary KfW Capital also got off to a successful
start in 2018 and will considerably expand its venture capital and
equity financing activities. Parallel to the subsidiary's foundation,
the VC commitment increased significantly (EUR 141 million, +34%
compared to the previous year).

There is also very high demand for the new Baukindergeld (benefit)
scheme launched in September, which helps families buy their own
homes. By the end of the year, around 56,000 funding approvals had
been made. Currently, there are already 68,125 commitments.

International business grew by 20% to reach a volume of EUR 28.3
billion (2017: EUR 23.5 billion). It was marked by a 29% increase in
commitments in export and project finance to EUR 17.7 billion (2017:
EUR 13.8 billion). At EUR 3.4 billion, the Power, Renewables and
Water business segment again accounted for the largest share (2017:
EUR 2.6 billion). It includes a number of onshore and offshore wind
farms, which underscores KfW IPEX-Bank's efforts to make a
significant contribution to environmental protection and climate
change mitigation.

The promotion of developing countries and emerging economies grew
by 8% to EUR 10.6 billion (2017: EUR 9.7 billion). EUR 8.7 billion of
this amount was accounted for by KfW Development Bank and EUR 1.9
billion by DEG. Financial Cooperation continued its structural growth
trend, mainly through commitments for Africa and the Middle East.
This includes projects to boost efficiency in the water sector, the
promotion of SMEs and the green economy.

As in previous years, KfW continued to focus its promotional
activities in 2018 on qualitative targets such as support for climate
change mitigation and environmental protection. The percentage of
financing of projects in this area is 40%. Just as important for KfW
is support for small and medium-sized enterprises in investment
finance. Overall, the ratio of KfW financing related to SMEs in
Germany was 41%.

Dr Günther Bräunig, Chief Executive Officer of KfW, said: "2018
was a successful year. Thanks to the good economic conditions, we
were able to focus on issues of particular relevance for the future,
i.e. innovation and digitalisation in Germany, as well as on
sustainably improving living conditions in Africa and other partner
countries of our Financial Cooperation. We were thus able to pursue
our promotional mandate and are very happy with the results."

Details on the business sectors' promotional activities

The SME Bank & Private Clients business sector generated a total
promotional volume of EUR 36.3 billion (2017: EUR 42.4 billion). The
SME Bank segment contributed a promotional business volume of EUR
17.2 billion (2017: EUR 21.3 billion).

The promotional priority area of start-ups and general corporate
finance re-corded a figure of EUR 6.7 billion (EUR 9.6 billion). The
KfW Entrepreneur Loan experienced a downturn (EUR 2.5 billion;
previous year: EUR 5.1 billion). This is primarily due to the
generally good terms of financing for companies. Financing for
business start-ups, at EUR 3.6 billion, was able to maintain last
year's strong performance (EUR 3.8 billion).

At EUR 3.1 billion, commitments in the priority area of innovation
notably exceeded the the previous year's figure of EUR 1.9 billion.
Most of the demand was focused on the ERP Digitalisation and
Innovation Loan, which was introduced in the second half of 2017.

The priority area of energy efficiency & renewables achieved a
total commitment volume of EUR 7.4 billion (EUR 9.8 billion) for
commercial customers. The decline is mainly due to weakening demand
in the renewable energy sector brought about by the Renewable Energy
Sources Act.

The promotion of corporate energy efficiency became even more
attractive at the end of 2018 with the "Energy Efficiency and Process
Heat from Renewable Energies in Industry" programme, so that we
expect business to grow in 2019.

The private clients segment generated a promotional business
volume of EUR 19.1 billion (2017: EUR 21.1 billion). The lion's
share, EUR 11.5 billion (2017: EUR 13.8 billion), is accounted for by
the priority area of energy efficiency & renewables with the loan
programme "Energy-efficient Construction and Refurbishment". While
the energy-efficient construction part of the programme at EUR 7.7
billion fell short of the very strong level of the previous year (EUR
10.3 billion), demand in particular for the programmes relating to
the energy-efficient refurbishment of existing properties increased
(EUR 3.8 billion; previous year EUR 3.5 billion).

A promotional business volume of EUR 5.0 billion (previous year:
EUR 4.7 billion) was provided in the housing & living priority area,
which also includes the newly introduced Baukindergeld scheme. Since
September 2018, families in Germany have been able to apply online to
the Baukindergeld (benefit) scheme to acquire their own homes and
provide for old age. Baukindergeld was launched as a priority of the
German Federal Government in this legislative period and is in high
demand. Over 56,000 applications with a volume of around EUR 1.2
billion had been approved by the end of the year.

The previous year's level was maintained in the priority area of
education, with a promotional business volume of EUR 2.1 billion (EUR
2.2 billion), enabling KfW to support 93,000 students and people in
further vocational training.

The newly formed Customised Finance & Public Clients business
sector generated a commitment volume of EUR 9.5 billion at the end of
the year, which means that new commitments are slightly higher than
in the respective prior-year period (EUR 9.3 billion).

The commitment volume for municipal & social infrastructure at EUR
3.5 billion was slightly lower (previous year EUR 3.9 billion) as a
result of the good financial situation of public budgets, but still
at a high level. In addition to basic funding for general municipal
infrastructure investments and municipal and social enterprises, the
promotion of energy-efficient construction and refurbishment at
municipal level also accounted for a significant share at EUR 0.8
billion.

With a contract volume of EUR 5.9 billion, individual financing
for banks and promotional institutions of the federal states
significantly exceeded the comparable prior-year figure of EUR 4.9
billion. Growth was stimulated in particular by increased demand for
global loans for leasing investments and refinancing of export
credits covered by federal guarantees. General funding of promotional
institutions of the federal states reached a contract volume of EUR
2.9 billion (2017: EUR 3.9 billion).

The commitment volume for customised corporate finance totalled
EUR 0.2 billion. The previous year (EUR 0.5 billion) was marked by
two large individual commitments in the offshore wind energy sector.

Promotion in the KfW Capital business sector increased by one
third (EUR 141 million, 2017: EUR 105 million). KfW Capital was
established in July 2018 as a 100% subsidiary of KfW and seamlessly
absorbed the active investment business in October. KfW Capital will
further expand venture capital and equity finance with support of the
ERP Special Fund: in the next ten years, KfW Capital will invest
around EUR 2 billion in venture capital and venture debt funds to
expand access to capital for young, innovative technology companies
in the growth stage in Germany.

International financing:

In the Export and project finance business sector, for which KfW
IPEX-Bank is responsible, new commitments of EUR 17.7 billion were
achieved (2017: EUR 13.8 billion) in a market environment
characterised by persistently intense competition. Most of the
transactions were concluded in consortia with other banks. As in the
previous year, the Power, Renewables and Water business segment again
accounted for the largest share of commitments at EUR 3.4 billion
(2017: EUR 2.6 billion). This includes a number of onshore and
offshore wind farms, which underscores KfW IPEX-Bank's efforts to
make a significant contribution to environmental protection and
climate change mitigation. KfW IPEX-Bank also supports efforts to
improve the sustainability of the maritime industry in ship
financing: in addition to measures to increase efficiency and reduce
emissions in ship operation, it increasingly finances new ships with
climate-friendly propulsion technologies such as liquefied natural
gas (LNG).

KfW Development Bank continued its positive development in
commitments. In 2018, KfW provided around EUR 8.7 billion in
financing to developing countries and emerging economies on behalf of
the German Federal Government (2017: EUR 8.2 billion). Around 58% was
earmarked for climate change mitigation and environmental protection
projects. Nearly 13% of new commitments are allocated for directly
supporting refugees in developing countries. Nearly 48% of all new
commitments went to development projects in Africa and the Middle
East; 71% of the German Federal Government's budget funds were
channelled to this region.

In 2018, DEG committed a record volume of around EUR 1.9 billion
for investments of private enterprises in developing countries and
emerging economies (2017: EUR 1.6 billion). New business in Africa
also set a new record of EUR 438 million (2017: EUR 265 million).
From a regional view, Latin America accounted for the largest share
of financing in 2018 with EUR 579 million (2017: EUR 502 million).
New business in Eastern Europe increased to EUR 245 million (2017:
EUR 85 million). Around EUR 967 million of DEG commitments in 2018
were made for small and medium-sized enterprises, an important driver
of economic development.

As in the previous year, the Financial markets business sector in
2018 invested a total of around EUR 1.5 billion for promotional
business via the capital markets. Around EUR 1.1 billion of this
total was used in securitisation transactions to promote SMEs. KfW
supported climate change mitigation and environmental protection by
investing EUR 0.4 billion in green bonds. For 2019, KfW plans to
invest a total of around EUR 1 billion in SME securitisations and a
new investment of EUR 0.3 billion for its green bond portfolio.

In order to fund its promotional business, KfW raised funds of EUR
76.1 billion on the international capital markets in 2018. A total of
144 bonds were issued in 12 currencies. Around 88% of the funds were
raised in the core currencies of the euro and US dollar. The euro
accounted for a record 61% of the total funding volume (2017: 53%).
With issues of EUR 1.6 billion in 2018, the outstanding volume of
"Green Bonds - Made by KfW" rose to a total of EUR 14.5 billion.

For 2019, KfW plans to raise funds of around EUR 80 billion on the
capital markets. The funding requirement is mainly determined by
planned new business in lending, maturities of the bank's own bonds,
and early repayments of loans.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM), Dr. Charis Pöthig
Tel. +49 (0)69 7431 4683, Fax: +49 (0)69 7431 3266,
E-Mail: Charis.Poethig@kfw.de, Internet: www.kfw.de

Original-Content von: KfW, übermittelt durch news aktuell