First half of 2015: KfW promotion very high in demand

Frankfurt am Main (ots) -

- Total commitment volume of EUR 41.5 billion (+31%)
- Domestic promotional business volume rises to EUR 25.7 billion
(+21 %)
- Strong demand for SME financing after hesitant start of the year
(+10%)
- Demand in international business increases more than 50 % to EUR
15.4 billion
- Consolidated profit of EUR 1,152 million
- Total assets roughly EUR 505 billion

KfW Group achieved a total business volume of EUR 41.5 billion in
the first half of 2015, up from EUR 31.7 billion in the same period
of 2014 (+31%). KfW's international operations (including KfW
Development Bank, KfW IPEX-Bank and DEG) experienced particularly
strong growth by approximately 55% to EUR 15.4 billion (H1 2014: EUR
10 billion). Domestic promotion also developed very well in H1,
coming in at EUR 25.7 billion (EUR 21.3 billion, +21%). Demand for
corporate financing picked up significantly following a hesitant
start to the year, while demand for real estate financing remains
high.

"Demand for KfW promotion rose sharply in the first half of 2015
in both domestic and international business. This is a good sign for
the German economy. We are very pleased that we as KfW are able to
support this positive development with our financing", said Dr Ulrich
Schröder, Chief Executive Officer of KfW Group.

The earnings position continued to evolve well in the first half
of 2015 with a consolidated profit of EUR 1,152 million (EUR 889
million). This exceeded expectations and was primarily driven by the
excellent valuation result.

"The positive development of KfW's operating result in the first
quarter 2015 persisted during the second quarter 2015, but it is
marked by various non-recurring effects. For this reason, the
full-year result cannot be extrapolated from the half year figures",
said Dr Schröder.

The operating result before valuation totaled EUR 1,009 million
(EUR 1,034 million). Net interest income (before promotional
activitiy) amounting to EUR 1,415 million (EUR 1,356 million)
continues to be the main source of income based on KfW's persistently
good funding conditions.

Promotional activity - mainly interest rate reductions for new
business in 2015 - at EUR 181 million equals the previous year's
level (EUR 186 million).

On the whole, the risk situation evolved very well. A modest need
for writedowns was recorded in the Promotion of developing and
transition countries business sector. However, this was more than
offset by positive non-recurring effects in the context of the
restructuring of Argentina's debt, as a result of which risk
provisions for lending business could be reduced by EUR 18 million
overall.

The still pleasing result from the private equity and securities
portfolio amounting to EUR 135 million (EUR 133 million) is
attributable especially to DEG's private equity business result that
was positively influenced, among other factors, by the development of
exchange rates.

Total assets came in higher than at 31 December 2014 (EUR 489.1
billion) registering a figure of EUR 504.5 billion. This development
is primarily due to currency-related fair value changes in connection
with hedging transactions.

The Group's regulatory capital ratios have increased compared to
31 March 2015. As of 30 June 2015, the total capital ratio stood at
14.7 % (31 March 2015: 13.9 %) and the tier 1 capital ratio at 14.6 %
(31 March 2015: 13.8 %). The increase is attributable in roughly
equal part to the good consolidated comprehensive income and to the
improved risk position.

Details on the business sectors' promotional results

The volume of new business at Mittelstandsbank (SME Bank) reached
EUR 11.0 billion as of 30 June 2015 (EUR 10.0 billion). Especially in
the key promotional areas of start-ups and general corporate
financing, as well as environment and energy, loan demand rose
perceptibly in the second quarter. This is due to favourable borrower
conditions and a moderate growth of corporate investment.

In the area of start-ups and general corporate financing,
commitments came in at EUR 5.7 billion (EUR 5.1 billion). Especially
start-up financing developed very positively, with commitments rising
to EUR 1.8 billion (EUR 1.3 billion). In Q2 2015, KfW also used for
the first time its new promotional instrument "ERP Venture Capital
Funds Investments", thus providing considerable impetus for improving
the supply of venture capital for young, growth-oriented technology
enterprises in Germany. Commitments in the field of innovation came
in at EUR 0.3 billion.

In the field of environment and energy finance, new commitments
with EUR 5.0 billion are also exceeding the previous year's level
(EUR 4.2 billion). Promotion of renewable energies rose to EUR 2.7
billion (EUR 2.3 billion). Key driver of this positive development
was the demand for the financing of onshore wind farms. Moreover, KfW
participated in the financing of the Veja Mate offshore wind farm
with EUR 430 million. Promotion of energy efficiency measures is also
above the previous year's level with a volume of EUR 1.6 billion (EUR
1.5 billion).

The promotional business volume in the Kommunalbank and
Privatkundenbank/Kreditinstitute (Municipal and private loans/credit
institutions) business sector with EUR 14.7 billion has increased
significantly, compared to the first half of 2014 (EUR 11.3 billion).
This encouraging performance was realised across all promotional
areas. In housing, the largest key promotional area in terms of
volume, commitments increased slightly to EUR 8.0 billion (EUR 7.6
billion). In particular, there was lively demand for the
Energy-efficient Construction and Refurbishment programmes supported
by the German Federal Government and the KfW Home Ownership
Programme.

In the promotional area of infrastructure financing the commitment
volume totaled EUR 2.0 billion - also an increase compared to the
previous year (EUR 1.4 billion). Investment loans for municipal
enterprises met with particularly strong demand. At EUR 1.1 billion,
commitments here have almost doubled when compared with the pre-year
period (EUR 0.6 billion).

The most significant growth was recorded in the field of general
funding for promotional institutions of the federal states, reaching
a commitment volume of EUR 2.7 billion, compared to EUR 0.7 billion
as of 30 June 2014. The momentum of commitments picked up already in
the second half of 2014 and became steady in the first half of 2015
in this key promotional area.

Education finance (EUR 1.2 billion vs. EUR 1.1 billion in the
previous year) and Individual financing banks (EUR 0.7 billion vs.
EUR 0.6 billion) also showed a positive trend.

In the Export and project finance business sector, for which KfW
IPEX-Bank is responsible, new commitments added up to EUR 13.1
billion. This means that the volume of commitments is clearly
exceeding the pre-year figure (EUR 7.9 billion). This trend is mainly
attributable to a number of larger individual transactions including
from the sector department Maritime Industries, which issued
financing commitments for several new cruise ships in June alone and
thus contributed EUR 4.2 billion (EUR 1.2 billion) to commitments.
Other key areas are the sector departments Power, Renewables and
Water with EUR 2.0 billion (EUR 0.6 billion) and Aviation and Rail
with EUR 1.9 billion (EUR 1.5 billion). The final commitment volume
will be significantly lower because a portion of the loans is due to
be passed on to other banks in the course of the year as part of
syndications and will thus be transferred from the books of KfW
IPEX-Bank to those of its syndication partners. This also reflects
the very close collaboration between KfW IPEX-Bank and German and
international commercial banks in the context of syndicates.

New commitments in the Promotion of developing and transition
countries business sector totalled EUR 2.3 billion (EUR 2.1 billion).
In the first half of 2015, KfW Development Bank committed a sum of
roughly EUR 1.6 billion (EUR 1.6 billion) for projects and programmes
worldwide. A total of 14% of the commitments pertain to social
infrastructure such as healthcare, education and water supply, 20% to
the finance sector and 41% to energy generation and supply. On the
whole, 68% of the projects are directed at climate and environmental
protection. As of 30 June 2015, DEG committed a total of EUR 669
million for investments by private companies in developing and
emerging countries, exceeding by far the previous year's level (EUR
475 million). Financing for FC projects/programmes in Latin America
was more than doubled to EUR 212 million (EUR 82 million). In Africa,
capital expenditure of EUR 185 million (EUR 114 million) was
committed. A total of EUR 196 million was granted worldwide for
investments in the industrial sector (EUR 99 million). EUR 250
million of new business is dedicated to venture capital financing in
the form of equity investments and mezzanine financing (EUR 173
million).

To fund its promotional business, KfW has raised long-term funds
in thirteen different currencies on the international capital markets
amounting to the equivalent of EUR 29.6 billion as of 30 June 2015
(as of 31 July 2015: EUR 38.1 billion). KfW continues to anticipate a
funding volume of EUR 55 billion to EUR 60 billion for the year as a
whole.

Service:

An overview of the business and promotional figures in table form
is available for download at www.kfw.de/geschaeftszahlen.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM) Sybille Bauernfeind
Tel. +49 (0)69 7431 2038, Fax: +49 (0)69 7431 3266,
E-Mail: Sybille.Bauernfeind@kfw.de, Internet: www.kfw.de