KfW

This report does not constitute a rating action. Overview Key strengths Key risks Almost certain likelihood of support from the German government, due to KfW's key role as national development bank, administrator of important promotional lending programs, provider of financial support in times of crisis, and agent of choice for holding strategic equity stakes.  Limited profit margins in government-delegated business fields, partly mitigated by a legal ban on dividend payouts.  Legal maintenance obligation and explicit guarantee from the German government for the bank's funding instruments, which S&P Global Ratings considers would support timely payment. Increasing complexity of bank regulation and potential for expansion of mandate could increase KfW's future capital requirements, despite currently strong position. Use of intermediary banks, collateral,

...Absent unforeseen events, we anticipate a further normalization of KfW's business volumes and structure back to pre-pandemic levels for 2024. Compared with 2023, recently reported first-half 2024 figures reflect the discontinuation of emergency aid and special liquidity assistance in the energy sector. While program-based promotional activities in the important private client segment, particularly in support of climate protection, grew again, overall first-half business volumes decreased to about 35 billion. This is very close to the level reported for first-half 2019. KfW looks on track to retain good profitability. Despite the decline in business volume, we understand that the bank managed to grow net interest income to above 1.4 billion in first-half 2024, up by almost 15% compared with first-half 2023. Key drivers were better results from investing KfW's own funds and the interest margin from its export and project finance business. Bond issuance by KfW in the capital market in 2024...

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