German KfW with decent gains
March 28, 2012
Germany's state-controlled development bank KfW announced on Wednesday that it had posted its second-largest profit since its founding in 1948, totaling 2.1 billion euros ($2.8 billion) in 2011. This came close to its all-time high in the previous year when profit amounted to 2.6 billion euros.
KfW - which according to its statutes does not have profit maximization as its aim - managed to leave behind most private banks in the country: only Deutsche Bank made a larger profit last year.
KfW as the third-largest German lender could have fared even better in 2011, had it not been for massive write-downs on its Greek government bonds that cost it 183 million euros.
The reconstruction bank has meanwhile disposed of its Greek bonds completely through a swap program and the consecutive selling of the lower-value assets at market prices.
KfW Chief Executive Ulrich Schröder on Wednesday gave a positive outlook for the current year. He expected profit once again to surpass the long-term average of 900 million euros, but added that the 2-billion-threshold would probably not be reached again.
More wind in KfW's sails
This year, the bank intends to enhance its contribution towards boosting wind energy in Germany.
"The federal government has asked us to consider investing more in helping resolve current problems over connecting wind farms to the national energy grid," Ulrich Schröder said in a statement in Frankfurt.
Grid operator Tennet currently lacks the resources to expand the energy transmission system and is dependent on outside help.
"We haven't decided yet what exactly we will do to help; it's a totally open debate right now," CEO Schröder said.
hg/mll (Reuters, dapd)