Frankfurt The corona crisis has driven the demand for loans from the state KfW to a record level and at the same time left the promotional bank in the red. “In the first half of 2020, KfW delivered the highest promotional output in its history, at a time when the corona crisis caused German economic output to collapse more than ever before,” said KfW boss Günther Bräunig on Wednesday in Frankfurt.
The promotional volume of the banking group rose in the first half of the year to 76.2 billion euros, which was more than twice as much as in the same period of the previous year. The domestic Corona programs in particular contributed to this, such as the auxiliary loans for companies and the self-employed, for which the state assumes most of the liability. For these programs alone, according to KfW, around 70,000 loan applications had been submitted and mostly approved by the end of June. The resulting commitments totaled 33.5 billion euros.
The number of applications from the Corona programs for companies is now around 83,000 and the volume of applications is even 53.2 billion euros, of which 42.6 billion euros have already been committed. Overall, the domestic funding volume tripled to 63 billion euros due to the Corona aid programs, while funding in developing countries decreased slightly.
At KfW, however, the corona crisis not only affected the funding volume, but also the business figures. Due to the significantly increased risk provisioning for potentially bursting loans and due to high valuation discounts in the investment portfolio, the development bank slipped into the red with EUR 576 million from January to June.
The now reported half-year loss had already occurred in the first quarter, in which the development bank had made massive provisions for loans at risk of default. Between April and June, however, KfW reported a tiny profit. Before deducting the risk result, KfW earned an operating profit of 967 million euros in the first half of the year, around 14 percent more than in the same period of the previous year.
Overall, the burdens from the risk result in the first half of the year amounted to 1.5 billion euros, of which, according to KfW, 1.1 billion euros were due to the effects of the corona pandemic. In addition, however, write-downs on loans to the insolvent payment service provider Wirecard, to which the KfW subsidiary Ipex-Bank had borrowed 100 million euros, also contributed to the charges.
So far, the billions in risk provisioning – apart from Wirecard – have essentially not yet represented any real loan defaults. The development bank does not expect this to happen until the second half of the year.
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