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31.01.2005 – 12:00

KfW

KfW Bankengruppe presents Financing Results for 2004 and plans nation-wide Introduction of Student Loan Programme in 2005

    Frankfurt am Main (ots)

KfW Bankengruppe (KfW banking group) presented the results of its financing activities in the year 2004 in Frankfurt on Monday. On the same occasion the bank described its ideas on the introduction of a nation-wide student loan programme. At the Annual Prelude Press Conference Hans W. Reich, Chairman of the Board of Managing Directors of KfW, explained the bank's commitment: "In a knowledge-based service society, education is a key to economic success. In the future, promoting the economy in Germany will mainly mean financing education."

    KfW is currently working on the introduction of a student loan programme on a broad scale and hopes to bring it onto the market in time for the fall semester 2005. Some important questions remain to be clarified in the coming months, partly with policymakers and with the universities. KfW's objective is a nation-wide loan programme open to all students regardless of their field of study, the income or assets of their parents and how much collateral they can provide. It will cover living expenses for the students, enabling them to fully concentrate on their studies. KfW intends to offer the student loan regardless of whether tuition fees are introduced. The product will be designed in such a way that the repayments are based on income and the financial burden is acceptable. KfW also wants to integrate social support for difficult cases as well as incentives for achieving above-average grades.

    KfW (strictly speaking Deutsche Ausgleichsbank/DtA, which merged into KfW in 2003) has been financing investments in education and advanced training for young people for around 10 years. In the year 2004 alone around EUR 812 million were granted in this business area. By introducing the new student loan, the bank will expand its offers in the field of education.

    At the Annual Prelude Press Conference KfW Bankengruppe presented its results for fiscal year 2004. Its balance sheet total improved by 5% to attain EUR 329 billion. The total financing volume of EUR 62.9 billion did not reach the record level of the prior year (EUR 72.2 billion). The various brands of KfW Bankengruppe developed differently: at EUR 14 billion, the financing volume of KfW Mittelstandsbank (KfW SME bank) was slightly higher than in 2003 (EUR 13.8 billion). "That is a success," said KfW Chairman Reich.

    "Our financing volume increased, countering the trend of general reluctance to invest." The "Unternehmerkredit," or entrepreneur loan, is KfW's basic offer of debt capital financing, with commitments increasing by 22% over the prior year to attain EUR 5.7 billion in 2004. For 2005 KfW is expecting the positive development to continue. Especially in view of the fact that risk-adjusted interest rates will be introduced in its lending programmes as of April 1, 2005, KfW is expecting that the banks and savings banks will be more willing to grant loans to small and medium-sized enterprises. This year KfW will join efforts with the banking industry to tackle the topics of standardising loan products and reducing loan unit costs.

    The financing volume of KfW Förderbank (KfW promotional bank) amounted to EUR 34.5 billion in 2004, considerably below its result one year earlier (EUR 44.9 billion). Seen over several years, this decline can be considered as part of the process of "normalisation": in the year 2003 KfW Förderbank experienced 35% growth in its volume of commitments to EUR 44.9 billion (2002: EUR 31.6 billion) which was the result of several special factors. Among the reasons for the decline in 2004 compared to 2003 were a lower securitisation volume, the expiration of programmes (including the "100,000 Roofs Solar Power Programme", which was only offered until the end of 2003) and lower demand for its Home Ownership and Environmental Protection Programmes.

    At the beginning of the year 2005 KfW restructured its promotional programmes in the fields of housing construction and modernisation and energy conservation in order to bring more transparency to the financing landscape. They are now combined in the three products "Housing Modernisation","Solar Power Generation", and "Ecological Construction".

    With commitments of around EUR 12 billion, KfW IPEX-Bank considerably exceeded its projected new business volume for 2004 and posted a gain over the prior year (EUR 11.5 billion). A few large-scale projects completed before the end of December 2004 helped to place the commitments above the target corridor of EUR 8-10 billion. EUR 5.8 billion in commitments went towards project and corporate financing within Germany; EUR 6.1 billion were for projects in other countries.

    Following the flood catastrophe in Southeast Asia, KfW Entwicklungsbank (KfW development bank) is focusing on emergency measures and preparing reconstruction projects. Teams of experts were sent to the affected regions as early as the beginning of January, and KfW is now planning to strengthen its local presence by opening an office in Sri Lanka. The bank already has a foreign office in Indonesia. The goals of KfW Entwicklungsbank have already been laid out: in Sri Lanka, the reconstruction measures will focus mainly on water supply and housing construction. In Indonesia the bank is arranging support in the fields of housing construction, roads, bridges, ports and also the reconstruction of hospitals and health stations. In 2004 KfW Entwicklungsbank committed a total of EUR 1.9 billion, 22% above the 2003 figure (EUR 1.6 billion). KfW provided a good EUR 600 million of this amount out of its own funds, and EUR 1.3 billion came from the Federal budget. KfW's subsidiary DEG provided another approx. EUR 0.6 billion (2003: EUR 0.5 billion) for private investments in developing and industrialising countries.

For further information please call: Christine Volk, Phone: +49 (0)69 7431-3867, E-Mail: christine.volk@kfw.de

KfW, Palmengartenstraße 5-9, 60325 Frankfurt Abteilung Konzernkommunikation Tel. 069 7431-4400, Fax: 069 7431-3266, E-Mail: presse@kfw.de, Internet: www.kfw.de

Original content of: KfW, transmitted by news aktuell