Docstoc

First Quarterly Report 2008

Document Sample
First Quarterly Report 2008 Powered By Docstoc
					First Quarterly Report 2008.
                      KFW BANKENGRUPPE.



       At the beginning of the year 2008 KfW adapted the reporting system
       of KfW Bankengruppe to take better account of the greater need
       for information about its promotional activities and to better portray
       its financing programmes. In the case of global loans, for example,
       starting this year only those tranches that have been disbursed are
       included in the statistics instead of the entire contract volume. To
       ensure comparability, the data for Q1 2007 were recalculated by
       analogy. If these statistics had not been adjusted, KfW's total lending
       volume in the first quarter would have been far higher. This purely
       statistical effect will, however, level out during the course of the year.


KfW’s business volume at EUR 14.3 billion mark
       The total financing and securitisation volume of KfW Bankengruppe
       amounted to EUR 14.3 billion in the first quarter of 2008, thus
       remaining below the result for Q1 of the record year 2007 of EUR 20.0
       billion. Measured against the quarterly results of the “normal” years
       2004 through 2006 (EUR 13 billion on average), though, the bank's
       promotional performance was again above average. The most import­
       ant pillar of KfW’s promotional business remains the financing trans­
       actions carried out by KfW Mittelstandsbank and KfW Förderbank,
       which, at EUR 9.2 billion, roughly matched the quarterly result one
       year ago.
The decline in the business volume can be attributed mainly to
securitisation business (down by EUR 3 billion), which is subject to
high volatility owing to the difficult market conditions. Securitisa­
tions in the housing sector were impacted particularly heavily, with
no transactions being carried out in this area.

On a positive note, the securitisation of SME loans achieved a very
good result of EUR 1.6 billion. This is a healthy indication that demand
for securitisation via KfW's platform is continuing, and that the
“right” assets can be placed in the market.
                                                 KEY FIGURES.




in EUR billions
                                                                        2007           20071             20072            20082
                                                                           .        1 Jan–31 Mar      1 Jan–31 Mar     1 Jan–31 Mar

   I. KfW Mittelstandsbank                                              23.2              2.8               2.9              3.9
      Financing                                                         13.2              2.8               2.9              2.3
         Global loans to commercial banks
         and Europe                                                        1.4               0.2              0.2              0.4
      Securitisations                                                   10.0                 –                –              1.6
      Advisory support (grants)3                                           –                 –                –              0.0
  II. KfW Förderbank                                                    43.5             15.0             11.1               6.9
      Financing                                                         34.6             10.4              6.5               6.9
         Global loans to commercial banks, Europe
         and general refinancing for promotional
         institutions of the federal states                               10.3               5.7              1.8              1.9
      Securitisations                                                     8.9              4.6              4.6                –
      Advisory support (grants)3                                            –                –                –              0.0
  Investment finance                                                    66.8             17.9             14.0             10.8
  III. KfW IPEX-Bank                                                    16,1              5,4               5,4              3,0
       Industry, telecommunications, basic industries                    4.7              1.0               1.0              1.3
       Power, renewables and water                                       1.9              0.8               0.8              0.5
       Transport and transport infrastructure                            9.3              3.7               3.7              1.1
       Other (AKA export loans, grants)                                  0.1              0.0               0.0              0.0
  IV. KfW Entwicklungsbank                                               3.0              0.4               0.4              0.3
   V. DEG                                                                1.2              0.2               0.2              0.3
  Total volume                                                          87.1             23.9             20.0             14.3
        Financing                                                       68.1             19.3             15.4             12.7
           Loans                                                        65.2             18.6             14.7             12.0
           Financial guarantees                                          1.5              0.5              0.5              0.6
           Grants                                                        1.0              0.1              0.1              0.1
           ABS SME portfolio                                             0.4              0.1              0.1              0.0
        Securitisations                                                 19.0              4.6              4.6              1.6
        Advisory support (grants)3                                         –                –                –              0.0

  Environmental and climate protection4                                 12.9               2.0              2.0              2.7
  Funding                                                               64.6             24.2             24.2             27.0
  Group balance sheet total                                           354.0            354.0 5          354.0 5          365.3
The figures for Q1 2008 were computed on the basis of a new statistical concept introduced for KfW as at 31 March 2008. For this
reason the quartely figures for 2007 are also stated according to both the old (non-comparable) and the new calculation method.
1 Calculated according to the old statistical method.
2 Calculated according to the new statistical method.
3 Inclusion of the item of advisory support as at 1 January 2008. Commitments made in previous years are not shown.
4 Included in the total volume as general promotional business of KfW Mittelstandsbank and KfW Förderbank.
5 As at 31 December 2007.

Differences in the totals are due to rounding.
                 KFW MITTELSTANDSBANK.



KfW Mittelstandsbank.
       In the first quarter of 2008 KfW Mittelstandsbank generated a
       business volume of EUR 3.9 billion, marking a significant rise over
       the same quarter last year (EUR 2.9 billion) that is attributable to
       securitisation transactions.

       The volume of financing carried out by KfW Mittelstandsbank
       surpassed EUR 2.3 billion. This amount included loan financing for
       business start-ups, self-employed professionals and SMEs totalling
       EUR 2.1 billion, thus remaining just below the very good result for
       Q1 2007 of over EUR 2.3 billion. This came about primarily because, at
       EUR 1.5 billion, the commitment volume of the KfW Entrepreneur
       Loan – the bank's basic financing programme for small and medium­
       sized enterprises – could not match the extraordinarily high volume
       generated in the first quarter of 2007.

       Mezzanine finance commitments made during the first three months
       of the year added up to EUR 0.2 billion. Half of this sum is attribu­
       table to the Entrepreneur Capital programme and the other half to the
       ERP Innovation Programme. During Q1 2008 EUR 42 million were
       committed by KfW in the field of equity finance.

       KfW StartGeld – a new promotional programme for start-ups and
       young enterprises. On 1 January of this year we introduced the new
       KfW StartGeld. This programme combines the preceding programmes
       Mikrodarlehen and StartGeld and offers even better conditions.
       Through its KfW StartGeld, KfW Mittelstandsbank supports business
       founders, self-employed professionals and small enterprises that have
       been in the market for less than three years and whose financing
       requirements do not exceed EUR 50,000.




                                         2
The main product features of the KfW StartGeld programme are:

•	   Maximum loan amount of EUR 50,000 with a term of five or ten
     years and one to two repayment-free grace years in the start-up
     phase;

•	   Applications can be filed by start-ups and young entrepreneurs/
     self-employed professionals whose business is not more than
     three years old; sideline business start-ups may also apply if
     their medium-term objective is to establish a full-time business;

•	   Monthly repayment of interest and principal in order to make
     financial planning and liquidity management easier for the
     companies;

•	   Off-schedule repayment is possible at any time at no extra
     charge;

•	   If several founders are investing in the same project, each may
     apply for the maximum loan amount.

The tried and tested on-lending principle, according to which
borrowers do not submit their application for funds directly to KfW
but instead to their regular business bank, also applies to KfW
StartGeld. The banks and savings banks face particular risks in the
area of start-up finance, which is why in its new KfW StartGeld
programme, too, KfW Mittelstandsbank offers the on-lending banks
80 % exemption from liability.




                                     3
                        KFW FÖRDERBANK.



KfW Förderbank.
       The total business volume of KfW Förderbank attained EUR 6.9
       billion in the first quarter, remaining below the 2007 figure of
       EUR 11.1 billion. This difference is attributable to a decrease in
       housing loan securitisation transactions (EUR – 4.6 billion).

       On the other hand, the financing provided by KfW Förderbank saw
       positive development, rising by approx. EUR 0.4 billion compared to
       Q1 2007, with financing commitments made during the first three
       months of 2008 totalling some EUR 6.9 billion. Commitments to
       environmental projects contributed a major share, rising by 35 % to
       EUR 1.2 billion (same quarter previous year: around EUR 900 million).
       KfW's housing finance programmes also developed well during the
       first quarter, with loan commitments adding up to approx. EUR 100
       million more than in the same quarter last year.

       Support for housing investment. In the first quarter of 2008 the
       EUR 3.1 billion in financing provided through KfW's housing invest­
       ment programmes (not including global loans) increased slightly over
       the commitments made in Q1 2007. Loans totalling EUR 1.4 billion
       were committed in the programmes targeting energy-efficient con­
       struction and rehabilitation within the framework of the “Housing,
       Environment, Growth” promotional initiative. This corresponds to a
       substantial increase in loan commitments for energy-efficient con­
       struction and rehabilitation of 40 %. EUR 0.9 billion in commitments
       went towards the modernisation of the energy systems in 42,700
       housing units under the CO2 Building Rehabilitation Programme and
       the Housing Modernisation ECO-PLUS Programme. In the Ecological
       Construction Programme another EUR 0.5 billion were committed to
       support the construction of 12,400 KfW Energy-Saving Houses
       including passive houses as well as the construction of new homes
       with a heating system based on renewable energies.



                                         4
Since the beginning of the year grants have been available to cover
construction supervision for measures applied in single and two­
family homes being financed under the CO2 Building Rehabilitation
Programme. The grants may cover 50 % of eligible advisory, planning
and construction supervision costs up to but not exceeding EUR 1,000
per housing unit. To qualify for a grant the building must have been
constructed before 31 December 1983 and the rehabilitation work
must lower the building's energy consumption to at least match that
of a new house as defined in the German Energy Conservation
Ordinance (EnEV).

The German Energy Agency GmbH (dena) is organising a “day of
energy-saving records” on 31 May 2008 together with KfW. Interested
visitors can have a look inside energy-efficient houses of the future,
including the dena pilot project “Efficient Homes”, which illustrates
the savings potential in the refurbishment of existing buildings. The
spectrum ranges from timbered houses to single-family homes built
in the 1960s all the way to prefabricated concrete buildings and listed
buildings. During tours architects and builders explain what is special
about the houses, which, once they have been rehabilitated, require
about 50 % less energy than comparable new buildings. Tips for
individual construction or rehabilitation projects and experiences
can also be exchanged during talks with the experts.

Steady demand for low-interest housing loans. Promotional loans
totalling EUR 1.1 billion were provided under the KfW Home Owner­
ship Programme during the first three months of this year to support
the construction or purchase of 21,000 owner-occupied houses or
apartments. The financial support continues to target the purchase
and modernisation of pre-existing buildings, reflecting the steep
decline in construction activity in Germany's housing market of the
past years. Investments in the housing stock now account for more



                                     5
than half of all investments in housing construction in the economy
as a whole. These mainly include energy-saving rehabilitation
measures supported through the “Housing, Environment, Growth”
promotional initiative of the Federal Government and KfW.

The one millionth promotional loan to support home ownership was
granted in February 2008. Since the programme started in 1996 loans
adding up to some EUR 50 billion have been extended. Each day on
average 225 home builders and buyers are helped to realise their
dream of owning their own home.

Municipal infrastructure development. In Q1 2008 loan commit­
ments in the field of municipal infrastructure reached a total of
around EUR 362 million. The main contributors to this result were the
Municipal Investment and Social Investment programmes, which
accounted for EUR 139 million and EUR 127 million, respectively.
Whereas the lending volume declined over the same period in 2007,
the number of commitments under both programmes rose by 16 %.

Educational programmes – KfW Student Loan well established.
With more than 3,000 applications approved in the first quarter of
2008, the KfW Student Loan has established itself as an important
source of support for covering students' cost of living. Since the
programme started two years ago a total of 40,000 loans have been
approved, making the KfW Student Loan a further key element of
individual student financing. The Student Loan may reach up to
EUR 650 monthly and is available for a standard period of study of
10 semesters.

With a good 10,000 applications additionally approved for the
“Meister BAföG” (financial assistance for master craftsmen trainees)
provided for technical professions, a further 3,000 applications for



                                  6
“Education Loans” open to advanced students, and 2,600 additional
BAföG and tuition fee loans, KfW committed some EUR 0.3 billion in
the field of education during the first quarter.

Financing environmental protection investments. In the first
quarter of 2008 KfW Förderbank provided a total of EUR 1.2 billion
in loans to finance industrial pollution control investments and
the use of renewable energies, marking an increase of 35 % over
the same period in 2007 (last year approx. EUR 900 million).

On 21 February 2008 the German Federal Ministry of Economics
and Technology (BMWi) and KfW Förderbank launched their joint
initiative entitled “Special Fund for Energy Efficiency in SMEs”. This
fund aims at helping small and medium-sized enterprises to tap
their energy saving potential, which helps them in the long run by
lowering their energy costs and thus improving their competitive
position – an aspect that is becoming increasingly important in view
of rising energy prices. The Special Fund closely combines consulting
and financing: to be better able to inform businesses about energy
savings potential in their operations, KfW provides grants covering
up to 80 % of the cost of qualified energy advice. KfW also offers
reduced-interest loans under its new ERP Energy Efficiency
Programme to provide incentives for companies to carry out energy­
saving investments.

KfW Carbon Fund. KfW continued to purchase emission certificates
from climate protection projects as planned during the last quarter.
Following the successful closing of the first tranche of the KfW
Carbon Fund the focus was on implementing the second purchase
programme set up jointly with the European Investment Bank (EIB).
The EIB-KfW Carbon Programme is to be closed by the end of 2008.
In it, KfW buys emission certificates that are then used by enterprises



                                     7
                            KFW IPEX-BANK.



       to fulfill their obligations under the European Emissions Trading
       Scheme. KfW thus acts as a service provider, especially for companies
       that lack independent access to projects abroad and/or the intent to
       build up their own capacities for this purpose.

       Starting with the second period of EU emissions trading in 2008, for
       the first time the emission credits for European enterprises will no
       longer be issued completely for free; rather, they will in part be sold
       or auctioned in the market. The German Federal Government has
       commissioned KfW to act on behalf of Germany in handling the sale
       of 40 million EU emission credits annually in the years 2008 and 2009.
       This assignment by the Government consolidates KfW's position as a
       competent service provider for the Federal Government for tasks
       connected with EU emissions trading.

KfW IPEX-Bank.
       KfW IPEX-Bank concluded new business totalling around EUR 3 billion
       in the first quarter. Financing operations in Germany accounted for
       EUR 1.1 billion, while commitments in other European countries added
       up to EUR 1.0 billion, leaving EUR 0.9 billion for regions outside Europe.

       Manufacturing and ship finance both made a major contribution to this
       result. Projects in the fields of basic industries and energy accounted
       for large shares as well. Energy finance projects placed special focus on
       renewable energies. In this area the bank financed wind farms in Taiwan
       and the USA as well as solar power systems in the USA.




                                           8
        KFW ENTWICKLUNGSBANK AND DEG.



KfW Entwicklungsbank and DEG.
       Climate and environmentally relevant investments in developing
       countries. During the first three months of the year KfW Entwick­
       lungsbank committed approx. EUR 270 million (2007: approx.
       EUR 390 million) for the promotion of developing and transition
       countries, with EUR 165 million having been provided out of KfW's
       own funds. The KfW subsidiary DEG financed private-sector invest­
       ments in developing and industrialising countries with EUR 290
       million (2007: EUR 235 million).

        International climate and environmental protection has become
        increasingly important over the past years. Owing to Germany's
        generally recognised know-how in this field and to competitive
        technologies and suitable financing instruments, it is the declared
        goal of the German Federal Government to also make a visible
        contribution to climate protection in Development Cooperation.

        Given their dynamic economies, the industrialising countries have an
        equally great need for both energy and climate protection measures.
        These countries need economic growth to reduce poverty. Yet growth
        brings with it a significant increase in harmful emissions that pollute
        the environment and the climate. At the same time, poor developing
        countries need to be shielded from the possible impacts of climate
        change and an exacerbation of both the international distribution
        and opportunity discrepancies and the potential for conflict.

        KfW Entwicklungsbank's past experience has shown that partner
        countries are willing to invest in climate protection if they have
        the necessary resources to do so. Together with the German Govern­
        ment KfW Entwicklungsbank launched the Initiative for Climate
        Change and Environmental Protection. Between 2008 and 2011 this




                                             9
                                   FUNDING.



       initiative aims at providing low-interest loans and grants for climate
       and environmentally relevant investments in developing countries.
       In April 2008 the first commitment was made during German-
       Vietnamese intergovernmental negotiations: EUR 39 million to sup­
       port urban development.

Funding.
       In the first quarter of 2008 KfW raised long-term funds for the
       equivalent of EUR 27.0 billion in the international capital markets.
       This sum was almost 40 % of the total funding volume of around
       EUR 70 billion planned for the year.

       After KfW's announcement at the end of 2007 of an increase in its
       refinancing requirements to approx. EUR 70 billion for the year 2008
       was well received by the capital market, investor demand for KfW's
       bonds – especially in US dollars – was extraordinarily strong in the
       first quarter of this year. As a result, in January KfW was able to issue
       its first benchmark bond for USD 5 billion. It was followed by three
       more benchmark bonds, two in US dollars and one in Euro. As in the
       previous year, demand for KfW's sterling bonds was also very keen.

       The most important (in terms of volume) of KfW's three funding
       pillars, the two benchmark programmes in Euro and US dollars,
       accounted for 48 % of total funds raised by the bank. KfW's second
       funding pillar, other public bonds, contributed 43 % of the financial
       resources. The remaining 9 % were raised through privately placed
       bonds tailored to the specific needs of institutional investors.




                                          10
KfW concluded 143 individual transactions during the first quarter.
Despite a higher refinancing volume compared to the same quarter in
the previous year, in Q1 the number of individual transactions
declined over Q1 2007 (177 transactions) owing to a stronger focus
on high-volume benchmark bonds. The heavy demand for KfW's
bonds in US dollars and British pounds is reflected in the funds
raised by KfW to date. The share of US dollars has been 37 % thus
far and that of the pound sterling, 23 %. The Euro accounted for 31 %
and the Japanese yen for 3 %. Thirteen other currencies contributed
the remaining 6 %.




                                    11
                            KfW Bankengruppe

180511




         Palmengartenstrasse 5–9, 60325 Frankfurt am Main, Germany

                 Tel. +49 69 7431-0, Fax +49 69 7431-2944,

                      infocenter@kfw.de, www.kfw.de


				
DOCUMENT INFO
About