Financial statements 2024: KfW in a strong position as it enters 2025

• Chief Executive Officer Stefan Wintels: KfW is well equipped to support the German Federal Government in strengthening Germany as an economic centre
• Financial solidity increases leeway – tier 1 capital ratio rose to 30.2 per cent in 2024
• Profit of EUR 1.4 billion despite significantly increased use of own funds in promotion; strong operating result at EUR 2.1 billion

At the press conference on annual results in Frankfurt, Stefan Wintels, Chief Executive Officer of KfW, announced that KfW has come out of the 2024 financial year in a financially strong position and is well equipped to support the new German Federal Government in implementing its growth plans for Germany.

"The new German Federal Government has a lot of plans in place to strengthen Germany as an economic location. KfW boasts wide-ranging expertise in numerous areas that the German Federal Government has identified as future fields. This is something we can bring to the table immediately",

said Wintels, before adding:

"The 2024 financial year once again showed that KfW has significant financial clout. We want to use this to strengthen Germany’s competitiveness and resilience."

Last year, KfW Group made a profit of EUR 1.4 billion. Although this is slightly below the previous year’s figure of EUR 1.6 billion, it nevertheless stands at the average level of the past five years.

In 2024, KfW mobilised around EUR 500 million of its own funds in the promotional business to further improve promotion conditions, known as its promotional expense. This has been the highest amount for more than 10 years. The focus areas were SME promotion, digitalisation and the environment. KfW plans to mobilise own funds of at least this volume in the current and coming years. The operating result before promotional expense, taxes and IFRS effects stood at EUR 2.1 billion, exceeding the prior-year amount (EUR 1.9 billion) by 11.4 per cent.

KfW Group has further strengthened its risk-bearing capacity. The regulatory capital ratios at year-end 2024 were 30.3 per cent for the total capital ratio and 30.2 per cent for the tier 1 capital ratio. As a result of the implementation of the Capital Requirements Regulation III (CRR III) in EU law as of 1 January 2025, equity ratios reduced by around 2.0 percentage points (capital ratios as at the end of February 2025: 28.1 per cent). Equity ratios remain at a very high level.

Promotional business grew slightly in 2024

The year 2024 was another strong promotional year at KfW. At EUR 112.8 billion, the volume of new business was close to the previous year’s level (2023: EUR 111.3 billion). Overall, the domestic promotional business grew slightly to EUR 79.0 billion (2023: EUR 77.1 billion). The volume of business increased in the Private Clients (EUR 22.4 billion compared to EUR 18.8 billion in 2023) and Customised Finance & Public Clients (EUR 41.6 billion compared to EUR 35.9 billion in 2023) segments. The SME segment, on the other hand, recorded a decline to EUR 13.4 billion (2023: EUR 20.4 billion), due in part to the economic situation.

KfW Capital’s commitments for start-ups and young, innovative technology companies in Germany amounted to EUR 1.6 billion (previous year: EUR 2.1 billion, due to one-off effects).

The Export and project finance business sector almost reached the previous year’s record value, with new commitments amounting to EUR 23.9 billion (2023: EUR 24.2 billion).

Promotion of developing countries and emerging economies as a whole reached a commitment volume of EUR 10.3 billion (2023: EUR 10.9 billion). KfW Development Bank accounted for close to EUR 7.8 billion (2023: EUR 9.0 billion).

As a partner to private companies in developing countries and emerging economies, KfW’s subsidiary DEG was able to once again increase its previous year’s record volume. It provided EUR 2.5 billion of its own funds (2023: EUR 1.9 billion) for private investments in developing countries and emerging economies under globally challenging conditions.

"Even in turbulent times and despite declining budget funds, we are doing everything we can to support our partner countries in improving economic prospects, protecting the climate and the environment, combating poverty and hunger, and securing peace. As an export nation, Germany continues to rely on global networking",

said Stefan Wintels.

A solid start to 2025: new business as of 28 February 2025 at EUR 11.2 billion

KfW started 2025 with new business totalling EUR 11.2 billion as at the end of February (previous year: EUR 10.9 billion). The slight increase was mainly due to domestic promotional business with a new commitment volume of EUR 7.6 billion (February 2024: EUR 6.9 billion), which is largely the result of increased demand for SME bank programmes. In particular, the “Renewable Energies Standard” programme, which enables low-interest financing of projects for the use of renewable energies for electricity and heat generation, is in greater demand again as a result of the decrease in the EU reference rate effective 1 January 2025.

Retail clients were particularly interested in the German Federal Funding for Efficient Buildings (BEG) in the first two months of the year, including promotion of heating systems.

In export and project finance, the commitment volume at the end of February amounted to a solid EUR 3.2 billion, which, in light of the business model characterised by few large-volume individual transactions, is only slightly below the prior-year figure (EUR 3.8 billion).

Promotion of developing countries and emerging economies stood at EUR 307 million (02/2024: EUR 339 million). KfW expects significantly more dynamic business development in this sector over the year, as was the case in previous years. Among other things, EUR 7 million went to Syria through the NABNI facility, an initiative to promote peace in the Middle East. Syrian NGOs can apply for project funding and, for example, rebuild energy and water infrastructure.

Consolidated earnings in detail:

KfW Group’s profit was EUR 1,402 million (2023: EUR 1,559 million).

"The slight decline in earnings is largely due to KfW using significantly more of its own funds for promotion. We will continue on this path, because we at KfW are aware of our social responsibility, especially in times like these",

said Bernd Loewen, Chief Financial Officer of KfW.

The operating result (before valuation) before promotional expense reached EUR 1,917 million, exceeding the already sound figure from the previous year (2023: EUR 1,797 million). Net interest income (before promotional expense), which at EUR 2,900 million also exceeded the prior-year figure of EUR 2,738 million, remained the main source of income. The positive development was mainly due to the higher returns on equity, the continued excellent funding opportunities and the successful growth strategy of export and project finance.

At EUR 675 million, net commission income (before promotional expense) exceeded the prior-year amount (2023: EUR 606 million). This increase was largely due to income from the implementation of the Federal Government’s promotional programmes as well as financial cooperation transactions. Administrative expense (before promotional expense) rose to EUR 1,658 million (2023: EUR 1,547 million). This was due to the overall price increase, collective bargaining agreements and, to a large extent, to a further increase in staff to implement the promotional products for the Federal Government. The cost-income ratio (before promotional expense) remained stable at 46% due to the higher operating income.

Because of the positive earnings development in 2024, promotional expense – i.e. the use of own funds for promotion – went up significantly to EUR 504 million (2023: EUR 371 million), in large part because of the rise in interest rates and the associated growth in demand for reduced-interest loans. There was a substantial uptick in interest rate reductions to EUR 406 million (2023: EUR 282 million). In addition, promotional expense included EUR 70 million for future investment grants that KfW will issue to support the ERP Digitalisation and Innovation Loan programme (ERP = European Recovery Program). This has been contractually agreed with the Federal Government.

The positive valuation result was shaped by the pleasing development of the investment portfolio and the continued solid and stable risk situation in KfW Group's loan book.

Risk provisions in lending totalled EUR +39 million (2023: EUR +165 million); this was mainly the result of the reversal of lump sum credit risk provisions and recoveries of receivables written off, which more than offset the low net expenses for non-performing loans.

The investment portfolio contributed to the positive valuation result with a net income of EUR 149 million, after the previous year’s charges amounted to EUR 101 million. This was essentially due to positive exchange-rate-induced effects from DEG’s equity investments and funds. KfW Capital’s equally positive investment result benefited from the improved framework conditions in the venture capital market.

Although the contribution to earnings of purely IFRS-related valuation effects from derivatives used for hedging purposes was significantly down, it was still positive at EUR 48 million (2023: EUR 203 million).

Total assets fell by EUR 15.4 billion to EUR 545.4 billion (2023: EUR 560.7 billion). This development was for the most part the result of a declining liquidity position in 2024 as well as of the decline in Net loans and advances – in particular as a consequence of repayments in the coronavirus special programme and reduced utilisation of the measures implemented for the Federal Government for energy suppliers.

KfW publishes sustainability report on a voluntary basis

For the first time, KfW Group publishes the sustainability report prepared in accordance with the European Sustainability Reporting Standards (ESRS) as a “combined non-financial report” within the financial report. Many large European companies and banks have had to implement the stringent standards already since financial year 2024. However, KfW Group does this on a voluntary basis, aiming to fulfil its claim of reporting transparently on sustainability topics that are material to the group – not least vis-à-vis its stakeholders and the general public.

KfW Annual Report online: Reporting Portal | KfW

Information about the press conference: Digital press portfolio for the 2024 press conference on annual results

1) The capital ratios stated take into account the eligible interim results according to Art. 26 (2) of the Capital Requirements Regulation, which deviate from the respective annual results in accordance with IFRS.