KfW: 2015 was a successful financial year
Main (ots)
- Prmotional business rose to EUR 79.3 billion - Consolidated profit of EUR 2,171 million achieved - Increase in total assets to EUR 503.0 billion
In 2015, KfW Group recorded very high demand for its financing products and approved funding at a total volume of EUR 79.3 billion (2014: EUR 74.1 billion, +7.0%). In Germany (2015: EUR 50.5 billion, +6.0%, 2014: EUR 47.6 billion), the increase can be attributed both to rising demand for financing from the commercial sector and strong demand for housing finance. This provided impetus for growth to the German economy. The volume of international financing business also increased by 9.7% to EUR 27.9 billion (2014: EUR 25.5 billion). KfW IPEX-Bank made a considerable contribution to this growth, being a specialist in both export and structured finance.
KfW Group further consolidated its role as global leader in climate and environmental finance with financing commitments totalling EUR 29.5 billion (2014: EUR 26.6 billion, +11.0%).
Posting a consolidated profit of EUR 2,171 million, KfW achieved a very good result in the 2015 financial year, which far exceeded both expectations and the previous year's result (EUR 1,514 million). This positive development is primarily due to the very good valuation result, which is influcenced by various non-recurring effects. Also, the purely IFRS-related effects from the valuation of derivatives used as collateral overstate the earnings position by EUR 271 million. At EUR 1,900 million, consolidated profit before IFRS effects from hedging - which is relevant for the management of KfW - also came in higher than the previous year's value (EUR 1,467 million).
"2015 was a very successful financial year that strengthened KfW's promotional capacity for the future. But this year's outstanding consolidated profit is far above the sustainable yield potential which is not likely to continue in subsequent years," said Dr Ulrich Schröder, Chief Executive Officer of KfW Group, during the press conference on annual results held on Monday in Frankfurt am Main.
At EUR 2,066 million, the operating result before valuations (before promotional activity) was up slightly on the prior-year figure (EUR 2,023 million) and exceeded expectations. A group interest result of EUR 2,904 million (EUR 2,768 million) that was positive despite the low interest rate environment contributed to this in particular. This trend can primarily be attributed to the increased margin income in international business that was generated by both volumes and exchange rates and to KfW's ongoing good funding opportunities.
The risk provisions for lending business resulted in negative effects on earnings of just EUR 48 million. These effects are far below what was expected and are still below what was the very low prior-year value (EUR 143 million). A modest need for writedowns was recorded in the Promotion of developing and transition countries business sector and in education finance. In contrast, non-recurring effects - including those created from the successful consolidation of old export finance loan claims - largely compensated for these negative effects.
The still pleasing result from the private equity and securities portfolio amounting to EUR 166 million (EUR 179 million) is attributable in particular to DEG's private equity business that was positively influenced by the development of exchange rates, among other factors.
KfW's promotional activity - largely interest rate reductions for promotional loans at the bank's own expense - had a negative effect on the result in the amount of EUR 345, thus roughly at the same level than in 2014 (EUR 364 million).
Consolidated total assets rose by EUR 13.9 billion to EUR 503.0 billion in the 2015 financial year. The increase is mostly attributable to the US dollar's exchange rate development, which is reflected in higher liquidity maintenance (+EUR 7.9 billion) caused by a rise in retained cash collateral in the derivatives business and the increase in net loans and advances (+EUR 3.8 billion to EUR 369.2 billion).
The group's regulatory capital ratios have improved significantly compared to 31 December 2014. When applying the IRBA analogously, the total capital ratio stands at 18.4% as of 31 December 2015 (31 December 2014: 15.1%), while the tier 1 capital ratio comes to 18.3% (31 December 2014: 14.1%). This positive trend is mainly attributable to the outstanding 2015 annual result. Also, further methodical developments had a beneficial effect. KfW has been subject to the regulatory reporting requirements for capital ratios since January 2016. Until the IRBA receives regulatory approval as envisaged, KfW will continue to report to the banking regulatory authorities in accordance with the credit risk standardised approach (CRSA). As of 31 December 2015, the total capital ratio and the tier 1 capital ratio under the CRSA stood at 13.5%.
** The complete press release with a tabular overview of the financial figures can be found at: www.kfw.de/KfW-Konzern/Newsroom/Pressetermine.
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