KFW PRESS BRIEFING CAPITAL MARKETS OUTLOOK 2020 - FRANKFURT, 12 DECEMBER 2019
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KfW Press Briefing Capital Markets Outlook 2020 Frankfurt, 12 December 2019
Business performance
75.5 bn EUR 486 bn EUR 1.6 bn EUR
Total promotional business Total assets at end-2018 Consolidated profit 2018
volume 2018
• About 60% domestic and 40% international • Germany’s 3rd largest credit institution in • Better than expected, due to extremely low
business. terms of total assets. risk provisioning and positive valuation
• In 2018/19 shift towards int’l business. effects.
81.0 507 527
79.3 76.5 75.5 503 472 486
2.2 2.0
53.5 1.6
in bn EUR
1.4 1.3
in bn EUR
in bn EUR
2015 2016 2017 2018 9M 2019
2015 2016 2017 2018 9M 2019
2015 2016 2017 2018 9M 2019 Strategic target (before IFRS effects)
Capital Ratio (Tier 1)
22.3 21.1
in % 20.6 20.1 • BaFin approval as advanced IRBA institution
18.3 since 6/2017.
preliminary IRBA
IRBA approval
CRSA
• The increase of KfW’s Tier 1 capital ratio
IRBA approved was mainly due to methodical adjustments of
16.1 16.7
BaFin minimum requirement the evaluation procedure.
2015 2016 2017 2018 9M 2019
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 2
Top notch financial ratings from leading rating agencies
Moody's, Scope Ratings and Standard&Poor's have assigned triple-A ratings to KfW
Solicited Ratings Unsolicited Ratings
KfW’s strength
Largest public Strong and explicit Germany’s Flagship Direct and unlimited statutory
development bank with linkages between KfW and Development Bank guarantee and maintenance
stable core operating the Federal Republic of obligation drives ratings.
performance and solid Germany Solid asset quality benefits from
risk profile on-lending.
Strong funding based on ‘safe-
Aaa Outlook stable AAA Outlook stable AAA Outlook stable haven‘-status.
Short-term: P-1 Short-term: S-1+ Short-term: A-1+ AAA Outlook stable Last update:
Jul 2019
KfW’s strengths KfW’s strengths KfW’s strengths
Strong ownership support in the Explicit and direct statutory Timely and sufficient extraordinary
form of a direct guarantee from the guarantee and institutional liability support from German government. KfW’s strength
German goverment. from the Federal Republic of Integral link with the government. Maintenance obligation of the
Germany. German government.
Low liquidity risk, given the good Explicit guarantee from the
market access & fallback options. KfW operates in a prudent manner Federal Republic & institutional High asset quality & low default
Conservative risk postion, which & complies with capital and risk liability. rates.
benefits from on-lending. management requirements. Low-risk assets, comprising Stable annual net income.
Mandatory profit retention predominately secured loans. Diversified, low-interest funding.
Access to capital markets is very
safeguards strong capitalization. good and sustainable.
Last update: Aug 2019 Last update: Aug 2019 Last update: Aug 2019
AAA Outlook stable Last update:
Aug 2018
Top credit standing is recognized by the three mandated rating agencies and by further unsolicited agencies
A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated
independently of any other rating.
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 3Top ESG ratings confirm KfW’s holistic sustainability approach
Renown international rating agencies assign KfW to be among top-performers in ESG
AAA A+ 10 100
KfW is among KfW is among KfW’s rating is KfW is #1 out 93
7.9
the 2 best out Leader the best-rated at the highest of 343 listed
of 19 develop- BB
institutions in Leader level possible and non-listed Industry
ment banks its peer group Industry
C+ banks
BB D
Prime D-
AAA 0
Leader 0
KfW’s strengths KfW’s strengths KfW’s strengths KfW’s strengths
Profound measures regarding the Comprehensive policy regarding In 2018, KfW received a rating of KfW is rated as leader in
management of ESG issues. the respect for human rights. AAA (on a scale of AAA-CCC) in sustainability aspects within its
Development and implementation the MSCI ESG Ratings peer group and all banks
Performance regarding assessment. worldwide.
environmental and governance of an approach to calculate GHG
criteria is above average and on emissions in the corp. value chain. KfW continues with strong
average regarding social criteria. sustainability performance and
Code of conduct covering impor-
even outperforms its excellent
Specifically striking is the positive tant aspects of business ethics.
results from last year in all three
performance in the area of Reasonable integration of environ- ESG categories.
environmental business mental and social aspects into the
operations. own investment portfolio.
Last update: July 24, 2019 Last update: Oct 16, 2018 Last update: Sep 4, 2018 Last update: April 29, 2019
KfW has set a new strategic objective of achieving top sustainability rankings among its peers.
A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated
independently of any other rating.
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 4Wide selection of products addressing investor needs
KfW Benchmark Programmes Green Bonds – Made by KfW
Large and highly liquid bonds, Liquid green bonds, diversified
highly diversified investor base SRI investor base
Regular offerings and taps Focus: € and $
Size: 3–5bn (6bn incl. taps, euro only) Regular offerings and taps
3, 5, 7 and 10y Private placements possible
Format: EMTN, Global Format: EMTN, Global, Kangaroo, US-MTN
Target ’19
€$ €80bn € $ ₤ A$ NOK SEK HK$ ...
€79.4bn
Additional Public Bonds Nov 30 ’19 Tailor-made Placements
Large and liquid bonds, Customized products for
diversified investor base investor needs
Tenors from 1 to 30y Flexible in currency, structure
Liquid curves and strategic and maturity
approach in ₤ and A$ Uridashi transactions
Regular offerings and taps Format: EMTN, US-MTN, NSV, SSD
Format: EMTN, Global, Kangaroo, Kauri
€ $ ₤ A$ NZ$ C$ SEK NOK € $ ¥ HK$ Mex$ CN¥ ZAR …
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 5Strong presence in debt capital markets
Relying on debt capital markets KfW is one of the largest issuers of bonds and notes
Funding volume (EUR in billions)
78.2 79.4*
80 76.1 75.0
72.8 3.8
70 4.3
62.6 15.8 17.0 21.6
60 4.3 16.0
3.7
50 15.8 2.8 8.1
40 3.7
30
55.4 55.4
49.8
45.9
20 38.8
10
0
2015 2016 2017 2018 2019 2020
KfW Benchmark Programmes Green Bonds - Made by KfW
Additional Public Bonds Tailor-made placements
*as of Nov 30, 2019
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 6KfW’s funding by currencies and instruments
Benchmark bonds are key – core currencies euro and US dollar
Instruments Currencies
(in %) (in %)
80 70 12
70 60 10
60
50
8
50
40
40 6
30
30
4
20
20
10 2
10
0 0 0
Benchmark Green Additional Tailor-made EUR USD GBP AUD JPY Others
Programmes Bonds Public Bonds Placements
2016 (EUR 72.8bn) 2017 (EUR 78.2bn) 2018 (EUR 76.1bn) 2019 (EUR 79.4bn)*
KfW Benchmark Green Bonds – Made Diversification
Programmes by KfW
10 Benchmarks bonds. New framework. #1 SSA issuer in GBP.
5x EUR + 5x USD. 11 green bond issuances in NOK volume on all-time
Record-breaking EUR order 7 different currencies. high.
book. Largest green bond issuer 48% of total funding raised
Biggest issuer of USD 2019 - total issuance in 11 foreign currencies.
benchmarks. volume EUR 8.1bn.
*as of Nov 30, 2019
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 7Green Bonds – Made by KfW
Green Bond issuances
EUR in
billions
9
8.1
8
7 EUR
6 USD
5 AUD
4 3.7 3.7 GBP
3 2.7 2.8
SEK
2 1.6 HKD
1 NOK
0
2014 2015 2016 2017 2018 2019ytd
Volume of green bonds issued by November 30, 2019: EUR 22.6bn
EUR equivalent; based on ECB reference rate on the pricing date
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 8KfW Green Bond Portfolio
Target volume in sight
Portfolio composition by sectors (in %)*
1% 1% 1% >1%
Energy Efficiency
5% Renewable Energy
6%
Sustainable Transport
13% Not yet distributed
Water- / Wastewater-Management
54%
Other Environmental Financings
19% Biodiversity
Waste-Management
Env. Sust. Management of Living Natural Resources
KfW’s Green Bond portfolio has a target volume of EUR 2 bn.
As of November 30, 2019, the portfolio volume amounted to EUR 1.6 bn due to 13 new investments with a total size of
EUR 325 mn.
Since the launch in 2015, KfW invested in Green Bonds from various issuers in15 different countries in four currencies.
*as of Nov 30, 2019
KfW Press Briefing - Capital Markets Outlook 2020 / 12 December 2019 9Photo credits / references
Cover page:
Disclaimer
Full-page image: KfW-Photo Archive / Stephan Sperl
This document is provided for information purposes only. This
document may not be reproduced either in full or in part, nor may it
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kind of obligation, contractual or otherwise. In all legal systems this
document may only be distributed in compliance with the respective
applicable law, and persons obtaining possession of this document
should familiarise themselves with and adhere to the relevant
applicable legal provisions. A breach of these restrictions may
constitute a violation of US securities law regulations or of the law
applicable in other legal systems. The information contained in this
document is historical and speaks only as of its date. KfW disclaims
any intention or obligation to update or revise the information
contained in this document. By accessing this document you
acknowledge acceptance of these terms.
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of MSCI logos, trademarks, service marks or index names herin, do
not constitute a sponsorship, endorsement or promotion of KfW by
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