KfW IPEX-Bank doing well in its first year of independence / Strong growth in new business / Financial market crisis weighs down on the result and requires higher risk provisioning

Frankfurt am Main (ots) - In 2008, its first year of legal
independence, KfW IPEX-Bank GmbH achieved strong growth in its volume
of new business, which totalled EUR 12.1 billion as at the end of
November. In addition, for the account of KfW it conducted export and
project financing transactions in the amount of approx. EUR 4.1
billion (transactions conducted on a trust basis). In this way, KfW
IPEX-Bank is making an important contribution to KfW's legal mandate
to promote the German and European economy.

Heinrich Heims, Speaker of the Board of Managing Directors,
reported on the business development and results of 2008 in Frankfurt
on Monday. By the end of November, the bank had exceeded its goal for
the year, with new commitments adding up to a good EUR 12 billion. In
its business it aims to establish a balanced regional distribution of
its portfolio. "To achieve this we seek to divide our portfolio into
thirds representing Germany, the rest of Europe and regions outside
Europe", announced Heims. "Outside Europe we focus primarily on
markets and customers with which we have mostly had a good business
relationship over many years."

In its domestic business KfW IPEX-Bank has committed over EUR 3.7
billion altogether, with finance for German shipping companies,
manufacturing and commerce accounting for the largest share. In
Europe the bank has committed new loans totalling EUR 5 billion. Its
new commitment volume reached EUR 3.4 billion in the regions outside
Europe.

During 2008 KfW IPEX-Bank also broadened its network of
representative offices by adding Johannesburg, and an office in Abu
Dhabi is currently under foundation. Another major step was the
conversion of the London representative office into a branch which
will specialise in financing infrastructure projects.

By the end of the third quarter on 30 September, the balance sheet
total of KfW IPEX-Bank was EUR 52.8 billion. The earnings from
operations - net income and commission income - were well above the
level of previous years.

Nevertheless, the financial market crisis has left traces.
Earnings have been reduced by write-downs in the book value of
financial assets which always have to be valued currently in strict
observance of the lower of cost or market principle. "Since our last
quarterly accounts we have had to book considerable valuation losses
on our liquidity portfolio", said Heims. As the financial crisis and,
hence, the fluctuations of market value in the financial markets are
continuing, a forecast regarding the annual result is not yet given.

Given the cyclical downturn, monitoring the loan portfolio will be
especially vital in the new year. This will also necessitate higher
risk provisions. "We benefit from the fact that the loan portfolio of
KfW IPEX-Bank is well diversified in risk terms thanks to our
regional and sectoral market strategy. Besides, we hold valuable
collateral as well as state guarantees in our export finance business
and for direct investments by German companies abroad", added Heims.
"But we are also prepared for a rise in the number of critical loans
that is sure to occur next year."

For 2009 Heims expects lower demand for financing as businesses
put off or cancel investment projects, but also a reduced supply of
credit as a result of the financial market crisis. For KfW IPEX-Bank
he anticipates that new loan commitments will decline to around EUR
8-10 billion in 2009. This planning scenario takes account of the
fundamentally new situation in the market. Although the business
volume will not reach the current year's level, it will still reflect
the original envisaged growth path. "First and foremost we want to
show that we intend to stay consistently in line with the market",
said Heims.

About KfW IPEX-Bank GmbH

Within KfW Bankengruppe KfW IPEX-Bank GmbH provides project and
corporate financing as well as trade and export financing
domestically and abroad. Worldwide it conducts all market activities
of KfW Bankengruppe that are carried out on commercial terms. KfW
IPEX-Bank GmbH has been operating as a legally independent subsidiary
since 1 January 2008 and contributes significantly to the promotional
mission of KfW Bankengruppe. It has approx. 490 employees (as of
October 2008) and is represented in the key economic and financial
centres across the globe.

Originaltext: KfW-IPEX-Bank
digital press kits: http://www.presseportal.de/pm/69662
press kits via RSS: http://www.presseportal.de/rss/pm_69662.rss2

Pressekontakt:
KfW IPEX-Bank GmbH,
Palmengartenstraße 5-9,
60325 Frankfurt

Pressestelle:
E-Mail: dela.strumpf@kfw.de
Tel.: 069 7431-2984,
Fax: 069 7431-9409,
E-Mail: info@kfw-ipex-bank.de,
Internet: www.kfw-ipex-bank.de