Report of the Board of Supervisory Directors

In addition, the Board of Supervisory Directors addressed the following key issues based on the reports submitted by the Executive Board on the individual business sectors:

• In domestic business, corporate financing was characterised by a marked decrease in commitment volume due to the inverted yield curve and the EU reference rate limiting offerings without state aid. Domestic promotion also focused on housing-related promotional programmes, including the new heating promotion. KfW launched the WIN initiative to leverage private venture capital, hosted an investor conference on the energy transition and organised the roundtable on district heating.
• Regarding activities for promotion of developing countries and emerging economies, the Board of Supervisory Directors discussed the situation in the Gaza Strip and the Financial Cooperation commitment there as well as KfW’s involvement in Ukraine. It also considered KfW Development Bank’s role in financing climate action and biodiversity measures as well as in strengthening global partnerships (including a co-financing agreement with the World Bank).
• The international Export and project finance business sector continued to focus on supporting German investors in the reporting year and, in particular, preparing KfW IPEX-Bank for its supervision by the ECB effective from the start of the year.

The Board of Supervisory Directors was informed at the meetings as well as every quarter, in writing, of the group’s net assets, financial and earnings position, its risk situation, the development of its promotional business, and Internal Auditing's activity. The Executive Board also kept the Chair of the Board of Supervisory Directors and his deputy informed of key developments at the bank between meetings.

The Board of Supervisory Directors discussed key aspects of the business strategy and approved the planning for 2025. It acknowledged the multi-year business strategy, the risk strategy, the new digital operational resilience (DOR) strategy for the first time, the IT strategies for the group and the individual group companies.

Each member of the Board of Supervisory Directors is obliged to inform the Chair of the Board of Supervisory Directors or the relevant committee about potential conflicts of interest before a resolution is made. A total of 13 cases of potential or actual conflicts of interest arose in the Risk and Credit Committee during the reporting period; this resulted in the relevant members abstaining from voting or refraining from participating in resolutions.

Six members of the Board of Supervisory Directors attended fewer than half of the board meetings in the reporting year. One member of the Presidial and Nomination Committee attended fewer than half of the meetings as did one member of the Remuneration Committee. Three members were absent from more than half of the meetings of the Risk and Credit Committee. Two members attended fewer than half of the meetings of the Audit Committee.

Members of the Board of Supervisory Directors attended seven training events and four individual training sessions in 2024 to gain and maintain the expertise required in accordance with the German Banking Act.

Committees of the Board of Supervisory Directors

In exercising its responsibilities prescribed in the bylaws, the Presidial and Nomination Committee discussed Executive Board matters. It recommended that the Board of Supervisory Directors reappoint the Executive Board members with responsibility for group management and sustainability (Chief Executive Officer), for risk management and controlling, and for international finance. At the recommendation of the Remuneration Committee, the Presidial and Nomination Committee approved the changes made to the remuneration of one Executive Board member. In addition, the Presidial and Nomination Committee specified the orientation of KfW’s basic business policy in line with the strategic guidelines for 2025. It conducted the regular evaluation of the KfW bodies, assessed the professional qualifications and composition of its members and made appropriate recommendations to the Board of Supervisory Directors. The Presidial and Nomination Committee regularly discussed the issue of dealing with potential conflicts of interest at Executive Board and Board of Supervisory Directors level. It was also informed about banking supervisory issues, KfW Stiftung and legal disputes.

The Remuneration Committee discussed remuneration issues in the context of Executive Board matters and made recommendations, among others, to the Presidial and Nomination Committee on the remuneration-relevant components of Executive Board contracts in the context of Executive Board reappointments. The Remuneration Committee was informed via reports in accordance with the Remuneration Ordinance for Institutions (Institutsvergütungsverordnung - “IVV”) of matters including the annual risk analysis to identify risk takers. As part of this risk analysis, KfW, both as an individual institution and at group level, has to identify staff members whose work could have a material impact on the risk profile of the institution/the group. The Remuneration Committee acknowledged the modifications to the 2019 pension scheme. The group-wide remuneration strategy and the assessment base for variable employee remuneration were also discussed.

The Risk and Credit Committee reviewed, among other matters, the commitments, equity investments, and intra-entity loans that must be presented to it under the KfW Law and KfW Bylaws as well as the scope of borrowings required by KfW for its funding and the related swap transactions necessary for hedging. It discussed the risk situation, the effectiveness of the risk management system, and the adequacy of reporting on strategy and risk.

It also dealt with KfW's exposure in various countries, regions and sectors, the development and assessment of political risks in relevant areas of activity, measures to further develop the risk culture, stress testing and market price risks, the risk profile of financing in certain sectors and the remuneration system, with a particular focus on the IVV.

Furthermore, it discussed in detail the situation in the Gaza Strip and KfW Development Bank’s involvement in Palestinian territories. The outcome of the US presidential elections and the impact on transatlantic relations were considered too, as were developments in France following the parliamentary elections.

The committee also conversed on multiple occasions about ESG and information security risks and measures to mitigate them. The regulatory capital requirements of KfW and the requirements under Basel IV were also discussed. And lastly, the committee debated the risk strategy, including capital planning for the next few financial years, and the new DOR strategy.

The Audit Committee addressed the accounting process, KfW's net assets, financial and earnings position, the reports by Internal Auditing and Compliance and the annual financial statements of KfW Group 2023. It made corresponding recommendations to the Board of Supervisory Directors for the approval of the annual financial statements 2023 and the appointment of the auditor for 2025. Based on information supplied by the Executive Board, it discussed the efficiency of the risk management system, the internal control system (ICS) and the internal audit system. In addition, it addressed auditor independence and audit quality, determined focal points of the 2024 financial statements audit and discussed the initial results of the 2024 financial statements audit (audit report part I). The committee approved the audit plan of the Internal Auditing department for 2025. It monitored banking supervisory issues and closely reviewed the banking supervisory assessments, along with the resulting measures and projects to remedy the findings, and was informed of the future sustainability reporting in accordance with CSRD and of the further development of KfW’s internal control system. Lastly, the committee dealt with current developments in IT.

The committee chairpersons reported to the Board of Supervisory Directors regularly on the work of the committees.

Changes on the boards

At the proposal of the Presidial and Nomination Committee, the Board of Supervisory Directors reappointed Dr Stefan Peiß to the Executive Board on 21 March 2024 with effect from 1 January 2025, reappointed Christiane Laibach to the Executive Board on 27 June 2024 with effect from 1 June 2025, and reappointed Stefan Wintels to the Executive Board on 5 December 2024 with effect from 1 October 2025.

In accordance with Article 7 (1) number 1 of the KfW Law, in my capacity as Federal Minister of Finance, I assumed the Chair of the Board of Supervisory Directors for 2025 from my colleague Dr Robert Habeck, Federal Minister for Economic Affairs and Climate Action.

Dr André Berghegger, Stefan Evers, Dr Heiko Geue and Dr Helena Melnikov joined the Board of Supervisory Directors with effect from 1 January 2025. The German Bundesrat also appointed Christian Piwarz as a member of the Board of Supervisory Directors on 14 February 2025 with effect from 1 January 2025. The Bundestag appointed Olav Gutting and Dr Thorsten Rudolph as new members of the Board of Supervisory Directors effective 22 February 2024 and 11 April 2024, respectively. Dr André Berghegger and Achim Post stepped down from the Board of Supervisory Directors during the year and Senator Dr Andreas Dressel, Mayor and Senator Björn Fecker, Prof. Dr Hans-Günter Henneke, Minister Michael Richter and Dr Martin Wansleben at the end of 2024.

The following members stepped down and were reappointed as scheduled with effect from 31 December 2024: Katharina Beck, Verena Hubertz, Dr Dirk Jandura, Andrea Kocsis and Holger Schwannecke.

The Board of Supervisory Directors would like to thank all the members who stepped down for their work.

Annual financial statements

Deloitte GmbH, which was appointed auditor for financial year 2024, has audited the annual financial statements, consolidated financial statements and the combined management report, all of which were prepared as of 31 December 2024 by the Executive Board, and issued an unqualified auditor's report thereon. The annual financial statements of KfW were prepared in accordance with the provisions of the German Commercial Code (HGB), and the consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as applicable within the European Union.

As stipulated in Article 9 (2) of the KfW Law, the Board of Supervisory Directors approved the financial statements and the consolidated financial statements, both of which were prepared by the Executive Board, at its meeting on 2 April 2025, following a recommendation by the Audit Committee.

Frankfurt am Main, 2 April 2025

The Board of Supervisory Directors

Chair