600 000 1942 ANNUAL REPORT Annual Report 2010 | Annual Report 2010 2010 KfW Bankengruppe Palmengartenstrasse 5–9 The sustainability of our enterprise, globalisation, climate 60325 Frankfurt am Main change and demographic change - we are currently facing great challenges. Global challenges require consistent action. Phone +49 69 7431 0 KFW IS AWARE OF THIS RESPONSIBILITY. Fax +49 69 7431 2944 99 per cent of all German enterprises are SMEs. They form the [email protected] backbone of the German economy. The sustainability of this growth and job engine is decisive for economic development. www.kfw.de Globalisation has fundamentally changed the economic framework conditions. Increasingly countries are becoming involved in cross-border trade. Melting glaciers, rising sea levels and threatening heat waves: in order to counteract global warming, CO2 emissions must be reduced. Societies in industrialised countries continue to age, while those in the developing and transition countries are getting younger. This demo- graphic change impacts the social system, education and the economy. KEY FIGURES OF KFW BANKENGRUPPE Total commitments of KfW Bankengruppe 2008 2009 2010 Key income statement fi gures for the KfW Group 2010 2009 EUR in billions EUR in billions EUR in billions EUR in millions EUR in millions KfW Group core business (consolidated)1) 67.8 63.9 81.4 Net interest income 2,752 2,654 KfW Mittelstandsbank2) 17.0 23.8 28.5 Interest rate reductions – 558 – 571 KfW Privatkundenbank 14.9 16.1 20.0 Net commission income 273 286 KfW Kommunalbank 11.6 9.4 15.8 Administrative expense 722 742 Advisory grants 0.0 0.1 0.1 Operating result before valuation 2,302 2,198 Export and project fi nance (KfW IPEX-Bank) 17.6 8.9 9.3 Risk provisions for lending business 424 – 972 Promotional business 5.0 4.3 3.9 Net gains/losses from hedge accounting and other fi nancial instruments at fair value through profi t or loss – 13 55 Market business 12.6 4.6 5.4 Net gains/losses from securities and investments and from investments accounted for using the equity method – 1 – 120 Promotion for developing and transition countries 4.9 4.5 5.7 Operating result after valuation 2,712 1,161 KfW Entwicklungsbank 3.6 3.5 4.5 Net other operating income – 27 23 DEG 1.2 1.0 1.2 Profi t/loss from operating activities 2,685 1,184 Asset securitisation and capital market-related products 1.9 1.5 2.1 Taxes on income 54 57 Total volume KfW Group (consolidated)1) 3) 67.8 63.9 103.7 Consolidated profi t 2,631 1,127 Consolidated profi t before IRFS effects from hedging 3,061 1,432 Differences in the totals are due to rounding 1) Adjusted for commitments made in export and project fi nancing refi nanced through KfW programme loans (2010: EUR 231 million, 2009: EUR 394 million, Change in revaluation reserves recognised directly in equity 33 261 2008: EUR 52 million). Cost/income ratio before interest rate reductions1) 20.2 % 21.1 % 2) Including cancellations and waivers in the KfW Special Programme in the amount of EUR 1,514 million in 2010 3) The Total volume KfW Group (consolidated) includes special business from the loan granted to Greece in 2010 as mandated by the Federal Government in the amount of EUR 22.3 billion. The maximum disbursement amount in the fi rst year is EUR 8.4 billion. Key balance sheet fi gures 2010 2009 EUR in billions EUR in billions Total assets 441.8 400.1 Volume of lending 426.7 383.5 Contingent liabilities 7.0 7.5 Irrevocable loan commitments 65.3 50.4 Strong demand for KfW promotion again in 2010 – Assets held in trust 16.6 16.9 record result strengthens long-term promotional capacities Volume of business 530.6 474.8 Equity 15.8 13.1 Promotional business in Germany and abroad: EUR 81.4 billion (+ 27 %) Equity ratio 3.6 % 3.3 % Contribution to overcoming the economic crisis through successful “KfW Special Programme” Key regulatory fi gures 2010 2009 One third of total promotional volume for environmental and climate protection investments EUR in billions EUR in billions Risk position 124.1 129.4 Tier 1 capital 15.3 12.2 Record result of EUR 2.6 billion through special framework conditions Total regulatory capital 18.3 15.2 Tier 1 ratio 12.4 % 9.4 % Basis to secure long-term promotional capacities and preparation for capital requirements from Basel III Total capital ratio 14.7 % 11.7 % Employees of KfW Bankengruppe 2010 2009 4,531 4,265 1) Administrative expense in relation to adjusted income. Adjusted income is calculated by adding net interest and commission income and interest rate reductions. KEY FIGURES OF KFW BANKENGRUPPE Total commitments of KfW Bankengruppe 2008 2009 2010 Key income statement fi gures for the KfW Group 2010 2009 EUR in billions EUR in billions EUR in billions EUR in millions EUR in millions KfW Group core business (consolidated)1) 67.8 63.9 81.4 Net interest income 2,752 2,654 KfW Mittelstandsbank2) 17.0 23.8 28.5 Interest rate reductions – 558 – 571 KfW Privatkundenbank 14.9 16.1 20.0 Net commission income 273 286 KfW Kommunalbank 11.6 9.4 15.8 Administrative expense 722 742 Advisory grants 0.0 0.1 0.1 Operating result before valuation 2,302 2,198 Export and project fi nance (KfW IPEX-Bank) 17.6 8.9 9.3 Risk provisions for lending business 424 – 972 Promotional business 5.0 4.3 3.9 Net gains/losses from hedge accounting and other fi nancial instruments at fair value through profi t or loss – 13 55 Market business 12.6 4.6 5.4 Net gains/losses from securities and investments and from investments accounted for using the equity method – 1 – 120 Promotion for developing and transition countries 4.9 4.5 5.7 Operating result after valuation 2,712 1,161 KfW Entwicklungsbank 3.6 3.5 4.5 Net other operating income – 27 23 DEG 1.2 1.0 1.2 Profi t/loss from operating activities 2,685 1,184 Asset securitisation and capital market-related products 1.9 1.5 2.1 Taxes on income 54 57 Total volume KfW Group (consolidated)1) 3) 67.8 63.9 103.7 Consolidated profi t 2,631 1,127 Consolidated profi t before IRFS effects from hedging 3,061 1,432 Differences in the totals are due to rounding 1) Adjusted for commitments made in export and project fi nancing refi nanced through KfW programme loans (2010: EUR 231 million, 2009: EUR 394 million, Change in revaluation reserves recognised directly in equity 33 261 2008: EUR 52 million). Cost/income ratio before interest rate reductions1) 20.2 % 21.1 % 2) Including cancellations and waivers in the KfW Special Programme in the amount of EUR 1,514 million in 2010 3) The Total volume KfW Group (consolidated) includes special business from the loan granted to Greece in 2010 as mandated by the Federal Government in the amount of EUR 22.3 billion. The maximum disbursement amount in the fi rst year is EUR 8.4 billion. Key balance sheet fi gures 2010 2009 EUR in billions EUR in billions Total assets 441.8 400.1 Volume of lending 426.7 383.5 Contingent liabilities 7.0 7.5 Irrevocable loan commitments 65.3 50.4 Strong demand for KfW promotion again in 2010 – Assets held in trust 16.6 16.9 record result strengthens long-term promotional capacities Volume of business 530.6 474.8 Equity 15.8 13.1 Promotional business in Germany and abroad: EUR 81.4 billion (+ 27 %) Equity ratio 3.6 % 3.3 % Contribution to overcoming the economic crisis through successful “KfW Special Programme” Key regulatory fi gures 2010 2009 One third of total promotional volume for environmental and climate protection investments EUR in billions EUR in billions Risk position 124.1 129.4 Tier 1 capital 15.3 12.2 Record result of EUR 2.6 billion through special framework conditions Total regulatory capital 18.3 15.2 Tier 1 ratio 12.4 % 9.4 % Basis to secure long-term promotional capacities and preparation for capital requirements from Basel III Total capital ratio 14.7 % 11.7 % Employees of KfW Bankengruppe 2010 2009 4,531 4,265 1) Administrative expense in relation to adjusted income. Adjusted income is calculated by adding net interest and commission income and interest rate reductions. 600 000 1942 ANNUAL REPORT Annual Report 2010 | Annual Report 2010 2010 KfW Bankengruppe Palmengartenstrasse 5–9 The sustainability of our enterprise, globalisation, climate 60325 Frankfurt am Main change and demographic change - we are currently facing great challenges. Global challenges require consistent action. Phone +49 69 7431 0 KFW IS AWARE OF THIS RESPONSIBILITY. Fax +49 69 7431 2944 99 per cent of all German enterprises are SMEs. They form the [email protected] backbone of the German economy. The sustainability of this growth and job engine is decisive for economic development. www.kfw.de Globalisation has fundamentally changed the economic framework conditions. Increasingly countries are becoming involved in cross-border trade. Melting glaciers, rising sea levels and threatening heat waves: in order to counteract global warming, CO2 emissions must be reduced. Societies in industrialised countries continue to age, while those in the developing and transition countries are getting younger. This demo- graphic change impacts the social system, education and the economy. Imprint 134 It's time for a new future Imprint Published by: KfW Bankengruppe Communication Department Palmengartenstrasse 5–9, 60325 Frankfurt am Main Phone +49 69 7431 0, Fax +49 69 7431 2944 [email protected], www.kfw.de Design and realisation: MEHR Werbe- und Projektagentur, Düsseldorf Lithography: Laser-Litho4, Düsseldorf Printed by: Mareis Druck, Weißenhorn Printed on Heaven 42, Igepa group PlanoPlus, Papyrus Contents 4 Images 133 CONTENTS Key fi gures of KfW Bankengruppe IT'S TIME FOR A NEW FUTURE 5 Letter