KfW's record 2009 profit strengthens its basis for promotional business

Frankfurt (ots) -

   - After two years of losses, profit of EUR 1.1 billion
   - Group earned outstanding interest income while increasing its 
     risk provisions
   - Market value of securities portfolio has recovered substantially
   - Dr Schröder: "The good result provides a stable basis for KfW to
     carry on its sustainable promotional business". 

In the year 2009, KfW Bankengruppe provided EUR 50.9 billion for industry, the environment, housing and education in Germany (previous year: EUR 45.4 billion), the highest domestic promotional business volume in its history. In the area of trade and industry alone, KfW made EUR 23.8 billion available, and the greatest portion of this went to small and medium-sized enterprises. Furthermore, it achieved a consolidated profit of EUR 1.1 billion after it had closed the previous year with a high consolidated loss as a result of the financial burdens associated with the IKB rescue.

The earnings position is marked by an outstanding operating result and positive effects from the securities portfolio on the result, as well as by the burdens resulting from risk provisions for lending business made in the course of the worsening economic and financial market crisis.

Dr Ulrich Schröder, Chairman of the Managing Board of KfW Bankengruppe, said: "The promotional business volume KfW achieved in 2009 has enabled it to make an important contribution towards stabilising the cyclical situation and securing jobs in Germany, thereby successfully fulfilling its mandate as a promotional bank. The balance sheet result signifies a substantial improvement of the Group's risk-bearing capacity, providing a stable basis for further sustainable promotion in order to alleviate the consequences of the economic and financial crisis for the enterprises".

The operating result before valuation developed very positively with growth from EUR 1,492 million to EUR 2,198 million. The main factor contributing to this growth was the Group's net interest income; KfW benefitted in particular from the highly favourable refinancing conditions in the short-term segment and its top-notch credit rating.

As had been expected, credit risks have accelerated as the downturn of the world economy continued. Risk provisions for lending business were therefore increased considerably by EUR 972 million in the financial year 2009.

A positive earnings contribution resulted from the securities portfolio. The recovery of the markets led to reversals of impairments from securities and investments totalling EUR 581 million, of which EUR 296 million had positive effects on the income statement. In addition, improved market values of EUR 285 million were directly recognised in equity.

In contrast, results were burdened by purely IFRS-related effects in the valuation of derivatives used exclusively for hedging purposes in closed risk positions. These negative effects on earnings, which totalled EUR 305 million in 2009, will offset each other over the term together with the underlying positions without affecting the income position. The consolidated profit adjusted for the IFRS charges not deemed economically meaningful amounted to EUR 1,432 million.

The consolidated total assets of the KfW Group rose by EUR 5.3 billion to EUR 400.1 billion in 2009, for the first time surpassing the EUR 400 billion mark. The volume of business increased noticeably to EUR 474.8 billion (previous year: EUR 454.1 billion), reflecting the strong borrowing demand. The interest rate reductions of EUR 571 million granted in promotional lending business remained at an elevated level. The volume of lending increased by EUR 18.5 billion, or 5%, to EUR 383.5 billion. To refinance its business activities KfW successfully raised EUR 74.7 billion (previous year: EUR 75.3 billion) despite the difficult conditions in the international capital markets.

**You can find the entire Press Release including a tabular overview of the "Key Financial Figures" of the KfW-Group at: www.kfw.de/EN_Home/ in the press section.


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

Original-Content von: KfW, übermittelt durch news aktuell

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