The state development bank is starting the current year with billions in profits. In 2023, the institute benefited, among other things, from increased interest rates.
The state development bank KfW sees itself strengthened for the challenges of the current year after a jump in profits. The bottom line was a consolidated profit of around 1.56 billion euros in 2023 after 1.37 billion euros in the previous year.
“This positive result is important and necessary so that we can continue to effectively support the transformation in the future,” said KfW CEO Stefan Wintels when presenting the annual balance sheet. According to him, the new heating support program is off to a successful start. “Demand is in line with expectations.”
The institute, which is owned 80 percent by the federal government and 20 percent by the federal states, benefited in the year of its 75th anniversary from, among other things, increased interest rates and the dissolution of general loan loss provisions. In 2022, the risks from the economic consequences of the Russian war of aggression on Ukraine were still reflected in the group’s loan book.
Funding volume has shrunk
Looking ahead to the current year, CFO Bernd Loewen was confident. He assumes that the target profit of one billion euros after taxes is very comfortably secured.
The banking group’s funding volume decreased last year after the exceptional year of 2022, as KfW had already announced. The new business volume was 111.3 billion euros – after 166.9 billion euros in the previous year. In 2022, the billions that the federal government decided to spend to secure energy supplies and to relieve the burden on households and companies after the start of the Ukraine war caused KfW’s funding volume to skyrocket.
So far, 8,000 applications for heating funding have been approved
According to the information, the start of the current funding year was slow. KfW attributed the decline in new business volume in the first two months to 10.9 billion euros after 30.0 billion euros in the same period of the previous year primarily to a special effect last year due to the war in Ukraine.
According to Wintels, the heating support program got off to a “pleasingly good” start. Homeowners who want to switch to more climate-friendly heating systems have been able to submit applications to KfW since the end of February. So far, 8,000 applications with a volume of 124 million euros have been approved (as of March 19). Initially, the support, which will be expanded over the course of the year, applies to owners of single-family homes who live in them themselves.
The federal government wants to use the funding to advance the heating transition in the building sector and protect consumers from price jumps for oil and gas if CO2 prices rise in the coming years. There had been bitter disputes for months over the traffic light coalition’s heating law, which has been in force since January 1st. Wintels currently assumes that the program’s funds will be sufficient for the current year. The program is well endowed with 6.2 billion euros.
Source: Stern
