State development bank
KfW with billions in profit
The good earnings trend at Kfw continued in the third quarter. Photo: Sebastian Gollnow / dpa
© dpa-infocom GmbH
The state development bank KfW is supporting the German economy in the corona pandemic with loan programs. The demand for it is now falling. There are also new challenges.
After a profit slump in the corona crisis year 2020, the state development bank KfW earns billions again. The institute generated a consolidated profit of 1.929 billion euros in the first nine months of 2021 after a mini-profit of 145 million euros in the same period of the previous year.
During the crisis, discounts on investments and additional risk provisioning for loans at risk of default weighed on the balance sheet. These effects have now been reversed, as the new CEO Stefan Wintels explained.
The manager who has been in office since the beginning of October spoke of an “exceptionally” good result in the first nine months. “KfW’s positive earnings trend in the first half of 2021 continued into the third quarter of 2021.” After the crisis year 2020, all operational business areas made above-average contributions to consolidated profit.
The funding volume of the banking group, which is owned by the federal government (80 percent) and the federal states (20 percent), decreased in the first nine months compared to the exceptional year 2020 to 73.1 billion euros (previous year: 109.1 billion euros). The demand for corona aid decreased after the end of the lockdown. Compared to the first nine months of the pre-crisis year 2019 with 53.5 billion euros at the time, the funding volume increased. In Germany, support programs for energy-efficient construction were in particularly high demand in the first three quarters of 2021.
“Fortunately, we are seeing a decline in the demand for Corona aid,” explained Wintels. “Now we have to concentrate on the challenges our country is facing: two of them are undisputed climate and environmental protection as well as digitization and innovation.” Essentially, it is about the sustainable restructuring of German industry and the long-term international competitiveness of the country.
KfW supports, among other things, aid programs on behalf of the federal government, together with banks and savings banks, to companies that have got into difficulties due to the pandemic. Since the start of the Corona aid programs in March 2020, the development bank has so far pledged 59.8 billion in loans at home and abroad (as of September 30, 2021).
The investment banker and long-time Citigroup manager Wintels is the successor of KfW boss Günther Bräunig, who has retired for reasons of age. In October, Bräunig acted as co-boss for a month to accompany the transition.