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,

...An almost unchanged volume of new business and third-quarter financial performance data point to stability in 2024 results. KfW's new commitments in 2024 matched those of 2023, while, as of Sept. 30, 2024, the bank's operating results before valuation were slightly stronger. To us, this suggests relatively stable full-year 2024 results. While we are not currently aware of any large, extraordinary lending programs, there could be an impact on KfW from Germany's planned 500 billion off-budget fund for infrastructure investments. Together with shifts in lending priorities due to the ongoing handover to a new German government, we think that a portion of such a fund could be used to subsidize new targeted promotional lending programs at the bank. KfW announced a targeted bond market issuance volume of 65 billion-70 billion for 2025. As in 2024, we expect KfW to source the majority of funding from large and highly liquid euro- and U.S. dollar-denominated benchmark bonds, while it again targets...

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