KfW – Credit Institute for World Rescue – Economy


When Stefan Wintels moved into his new office on Bockenheimer Landstrasse in Frankfurt last fall, he found a bank in crisis mode. The corona pandemic had the country under control, brought entrepreneurs to the brink of bankruptcy and the health system to its breaking point. The state bank KfW, led by Wintels, has been the savior in times of need, providing credit where other banks would not, mitigating the effects of lockdowns and disrupted supply chains. The institute was already loaded with the future projects of the traffic light coalition: Wherever financing was unclear, the coalition members had called for KfW.

The former investment banker Wintels has now completed almost 300 days, held more than 500 discussions with employees and revised KfW’s corporate strategy. And yet he is still more of a crisis manager than a bank manager. “With the war in the Ukraine we are experiencing the end and the beginning of an era,” said Wintels on Wednesday evening in Frankfurt.

A larger balance sheet than Commerzbank, but a lot fewer people

It will also depend on KfW how painful this turning point will be. The bank is in the middle of a war: municipalities receive financial aid for Ukrainian refugees, the Ukrainian government loans without earmarking and the institute is already ready for the planned German liquid gas terminals. If the energy company Uniper, which is threatened with bankruptcy, now receives state aid and the federal government ultimately also takes a direct stake in the company: That too is a matter for KfW.

Which leads to the question of whether what is now Germany’s third-largest financial institution will not reach its limits at some point – with just 7,300 employees but total assets of 550 billion euros, which is more than Commerzbank has. A state bank had never been challenged in this way, said Wintels’ predecessor Günther Bräunig at the beginning of 2021, when the war in Ukraine was still far away.

Otherwise, KfW’s activities range from German homeowners insulating their walls to young people in Honduras whose school is being renovated with money from Germany. From the time of the Corona emergency loans, there are still more than 40 billion euros in loans in the books of KfW – for comparison: KfW keeps the entire “Aufbau Ost” between 1990 and 2000 in its archives with a total of 82.5 billion euros. It also holds the state shares in Telekom and Post. The Uniper rescue is currently keeping the institute in suspense, not to mention the reconstruction aid that is looming for Ukraine.

Little demand for post-war program

So, is there a limit reached soon? “I don’t see that at the moment,” says Wintels, who is said to have come into office primarily at the instigation of the SPD. Chancellor Olaf Scholz he has known for a long time. “If politics needs us, KfW must be able to deliver,” he says. At the beginning of the year, when politicians suddenly stopped promoting energy-efficient building stoppedit was ultimately not up to KfW, the funds from the federal government had been used up.

KfW: "If we now only see ourselves as crisis managers, then we will miss the opportunities in the other fields," says KfW boss Stefan Wintels.

“If we now only see ourselves as crisis managers, then we will miss the opportunities in other areas,” says KfW boss Stefan Wintels.

(Photo: Alex Habermehl/KfW)

The numbers currently give leeway: After a slump in profits in the first Corona year, the institute earned around 2.2 billion euros in 2021. It was a little less in the first half of 2022, but at the same time the bank benefits from the state owner and can currently refinance itself cheaply on the capital market compared to other banks. That gives legroom for lending. In addition, the demand from the German economy for the KfW program to cushion the consequences of the war is currently limited. So far, less than 100 million euros have been used, says Wintels. That is reassuring, but the situation can change daily, for example if gas no longer flows from Russia to Europe.

At the same time, Wintels is very careful not to overdo it with the crisis rhetoric. After all, the other tasks don’t take care of themselves. “If we now only see ourselves as crisis managers,” he says, “then we’ll miss opportunities in other fields.” In the financing of the energy transition, for example, and in the area of ​​climate protection investments. In order to achieve the German climate goals by 2045, the federal, state and local governments would have to invest around 500 billion euros, calculate the economists at KfW. “The need for investment will arise primarily in the energy and transport sectors and will roughly correspond in magnitude to the interest payments for the national debt,” it says. In order to do justice to this, climate protection investments would have to be increased sixfold.

Only since 2013 a real bank

in the coalition agreement KfW appears eleven times in the traffic light coalition, and it is not overinterpreted to see it as the federal government’s secret weapon. “The state development bank KfW should act more as an innovation and investment agency and as a co-venture capitalist,” it says on page 24, “especially for AI, quantum technology, hydrogen, medicine, sustainable mobility, bioeconomy and circular economy”. So once everything, please.

At the same time, the bank is still dragging around with itself many a home-grown problem, especially as it is only a state institute treated since 2013 is like a real bank, i.e. it is also monitored by the financial supervisory authority and is subject to the Banking Act. True, that one is bad mistakes forgotten from the financial crisis, when millions were transferred to the US bank Lehman Brothers even after its bankruptcy; However, the last few years have been spent by the group’s management modernizing the IT and internal auditing, which is designed to detect errors. Not everything is finished yet.

In any case, Wintels seems to have found his calling at the head of KfW. He was “grateful” and “happy” that he was allowed to take on this task. In order to exemplify a modern working environment at the same time, he and the other board members are now even moving into a shared open-plan office by the end of the year.



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