KfW promotion provides stability in a difficult financial and economic environment

Frankfurt (ots) -

- Promotional volume of EUR 73.4 billion with continuing high
demand
- Increase of SME financing (+7%)
- Energy-efficient construction and refurbishment with record
volume (+52%)
- 40% of promotional activities for environmental and climate
protection
- Continuation of modernisation process

In 2012 KfW Bankengruppe extended a total financing volume of EUR
73.4 billion. After reaching a volume of EUR 70.4 billion the
previous year, financing now remains on a path of moderate and
long-term qualitative growth. In 2012, KfW made financial commitments
to enterprises, municipalities and private persons in Germany
amounting to EUR 50.6 billion (2011: EUR 50.9 billion). The promotion
of the SME sector in Germany increased significantly by nearly EUR 2
billion (+7%) (2012: EUR 24.1 billion; 2011: EUR 22.4 billion). The
share of SME financing in Germany rose from 44 to 48%.

"KfW's promotional result for 2012 shows that KfW provides
stability to German enterprises, private persons and municipalities
in a difficult financial and economic environment. In particular this
is reflected by the increased demand for KfW financings from
enterprises and the record demand for programmes geared towards
energy efficient construction and refurbishment. These programmes
alone created and secured about 370,000 jobs in 2012," said Dr Ulrich
Schröder, Chief Executive Officer of KfW Bankengruppe at the annual
prelude press conference in Frankfurt am Main on Wednesday.

Along with SME promotion, another important focus of KfW's
promotional work in 2012 was environmental and climate protection.
KfW's overall commitments for this area increased substantially from
EUR 22.8 billion to EUR 29.2 billion in 2012 (+28%). They make up 40%
of total promotional volume (2011: 32%). In 2013 this share is to
also range from 35 and 40%. This reflects KfW's promotional focus on
financing measures to combat climate change and to benefit
environmental and resource protection.

In order to prepare responsibly for the changing requirements
resulting from the banking and financial crisis as well as the
growing demand for long-term loans, changed customer needs and
regulations, KfW is continuing its modernisation process. It is
maintaining the strong focus of its promotional offers on relevant
societal developments and continuously improving the quality of its
promotional support. In parallel it is orienting itself more strongly
on the expectations and needs of customers and sales partners. In
particular KfW is working on comprehensive projects to improve
customer orientation such as through product transparency, the
capability of promotional loans to be accessed and processed online,
and the acceleration and standardisation of processes and lending.

"In order to be able to also effectively fulfil our promotional
mandate in the future and provide sufficient financings to SMEs, home
renovators, students, municipalities and foreign business partners
and partner countries, we are ensuring the future viability of our
proven business model. Based on the on-lending principle we want to
increase the effectiveness of our deployed funds through a consistent
focus on customer needs," said Dr Schröder.

Promotional results of the business areas in detail

In the business area KfW Mittelstandsbank the volume of new
business reached EUR 24.1 billion (2011: EUR 22.4 billion). The
volume of commitments in the area of business start-ups and general
corporate finance grew strongly from EUR 9.4 billion to EUR 11.1
billion. This was driven primarily by high demand for KfW
entrepreneur loans. The promotional area of environmental protection
showed a similarly strong increase in commitments to EUR 12.0 billion
(2011: 10.8 billion). In particular the KfW Renewable Energies
programme developed positively with EUR 7.9 billion (2011: EUR 7.0
billion). Of positive note is also the development of commitments for
financing of energy efficiency projects: the promotional volume
increased from EUR 2.8 billion to EUR 3.6 billion.

The business area KfW Privatkundenbank reached a total financing
volume of EUR 17.4 billion. The higher commitment volume compared to
2011 (EUR 16.7 billion) was achieved in particular through the
Energy-Efficient Refurbishment and Energy-Efficient Construction
promotional programmes, which are decisive for achieving the
environmental and climate protection goals. In this segment KfW
achieved a record commitment volume of about EUR 9.9 billion,
representing an increase of 52% (2011: EUR 6.5 billion). To further
advance the energy-efficient refurbishment of residential buildings,
starting in 2013 an additional EUR 300 million in German federal
budget funds will be provided annually through 2020 for grants in the
Energy-efficient Refurbishment programme. In addition to the increase
in grant funds, the financing conditions in the loan variant will be
further improved.

The commitment volume in the promotional area of education and
social concerns amounted to EUR 2.3 billion (2011: EUR 2.2 billion).
Particularly the KfW Student Loan (including tuition fee loans)
experienced 11% higher demand than the previous year. The financing
conditions of the KfW Student Loan is scheduled to be further
improved starting in the summer semester 2013 to better support
lifelong learning. KfW will expand the promotional offer to include
second degree or postgraduate courses of study, masters programmes
and doctoral studies as well as extend the age limit.

In 2012 the business area KfW Kommunalbank achieved a financing
volume of EUR 9.1 billion and remained only slightly below
expectations despite a lower propensity by municipalities to invest.
In the area of infrastructure finance the commitment volume totalled
EUR 3.8 billion, representing only a slight decline compared to the
previous year (2011: EUR 4.1 billion). However, the number of loans
granted for municipal projects rose substantially with an increase of
40%. In total over 2,500 individual commitments were granted. In
addition, funding was increasingly focused on the promotional topics
of environmental protection and climate change as well as demographic
development. In particular the commitment volume for environmental
and climate protection financing rose significantly from EUR 0.9
billion in the previous year to EUR 1.3 billion. This trend, which is
associated with the launch of new special promotional programmes
(Urban energy efficiency rehabilitation), documents KfW's substantial
contribution to supporting the federal government's energy turnaround
on the municipal level.

The commitment volume for the general refinancing of the
promotional institutions of the federal states was reduced as planned
in 2012. It amounted to EUR 5.3 billion in the reporting year
compared to EUR 7.7 billion in the previous year.

The business area Export and project finance, for which KfW
IPEX-Bank is responsible, reached the previous year's financing
volume with new commitments of EUR 13.4 billion (2011: EUR 13.4
billion). The business sectors Maritime Industries (EUR 2.5 billion),
Power, Renewables and Water (EUR 2.1 billion), and Industries and
Services (EUR 2.1 billion) mainly contributed to this result. The
current commitments in the area Maritime Industries concerned mostly
cruise ships and offshore industry investments. The stable trend in
commitments was due to the positive propensity of companies to invest
and the success of the German export economy in global competition.

The commitment volume in the business area Promotion for
developing and transition countries was EUR 6.2 billion (2011: EUR
5.8 billion). The business area KfW Entwicklungsbank again increased
its financing volume in 2012, committing about EUR 4.9 billion (2011:
EUR 4.5 billion) globally for development programmes. The amount of
KfW's own funds that the business area employed for international
development finance totalled EUR 3.1 billion (2011: EUR 2.6 billion).
KfW thus provides considerable support to the Federal Government in
meeting its international obligations for development finance. About
EUR 2.8 billion benefits the area of environment and climate, which
is about 57 per cent of the new commitment volume.

The DEG, which finances and structures investments by private
companies in developing and transition countries, achieved a
financing volume of EUR 1.3 billion (2011: EUR 1.2 billion). It thus
again achieved substantial leverage and mobilised a considerable
amount of private sector investments. Many of DEG's partner countries
are also future markets for German enterprises, a key target group of
DEG. In 2012 it provided this group about EUR 182 million (2011: EUR
99 million) for financing foreign investment, significantly more than
the previous year.

The business area of capital market-related financings achieved a
commitment volume of about EUR 3.6 billion in 2012. The programme for
refinancing of export loans covered by federal guarantees supported
the German export economy with long-term funds amounting to about EUR
1.2 billion. In addition, about EUR 2.4 billion to finance the German
SME sector were made available through securitisation instruments,
global loans for leasing companies and banks.

To fund its promotional mandate in 2012, KfW raised long-term
funds amounting to EUR 78.7 billion on the international capital
markets (2011: EUR 79.7 billion). To this end KfW issued more than
200 bonds in 15 different currencies. Large volume and highly liquid
bonds in benchmark format attained a share of about 59% of total KfW
funding, again making up the most important pillar of funding. The
main funding currencies were the EUR (almost 49%) and USD (almost
32%). KfW's refinancing costs remained at an historical low level
over the year as a whole.

For 2013 KfW is planning a lower funding volume of EUR 70 to EUR
75 billion.

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: presse@kfw.de, Internet: www.kfw.de