KfW Group has announced its plans for the upcoming year, outlining its funding strategy and focus areas during its annual capital market press conference. The bank aims to raise between EUR 65 to 70 billion in the capital markets in 2025, with approximately EUR 10 billion of this total expected to be generated through green bonds.
Tim Armbruster, Treasurer of KfW Group, expressed confidence in their strategy amidst geopolitical and economic challenges. "We have a tried and tested funding strategy and abundant experience to efficiently navigate through the expected challenges posed by geopolitical and economic risks. Our ability to identify optimal windows for issuances, however, will probably become more important than ever before," he stated.
The bank's plans include further digitalization of issuance activities under the German Electronic Securities Act (eWpG). KfW intends to continue exploring crypto securities while also investing in bonds from other issuers. The focus will be on scaling central register securities into regular operations.
"The aim of all digitalisation measures that we have already implemented and will initiate in the future is to achieve a fully automated issuance process that reduces media discontinuities and interaction effort," explained Armbruster. He emphasized scalability as a crucial factor in their digitalization efforts.
KfW reported completing its funding activities for 2024 by November end, raising EUR 78.1 billion through over 140 bonds across seven currencies. This included nine transactions of 'Green Bonds – Made by KfW', achieving a volume within their target range.
Armbruster noted satisfaction with this year's activities despite political uncertainties affecting market conditions: "I am most satisfied with this year’s international capital market activities... We have guided our funding activities optimally through phases of great uncertainty."
This year marks KfW's tenth anniversary since entering the green bond market, having completed 136 transactions worth EUR 82.8 billion since 2014. Petra Wehlert, Head of Capital Markets at KfW Group, highlighted their strength in offering large-volume green bonds: "Our particular strength is that we offer large-volume, liquid green bonds in euros."
KfW has been actively pursuing digitalization within its operations this year as well. They issued several bonds under eWpG regulations contributing significantly to Clearstream’s D7 post-trade platform while experimenting with blockchain-based digital bonds as part of ongoing innovation efforts.
"We are capitalising on our market position and relevance in order to take the lead as a driver of innovation," concluded Armbruster regarding their experiences so far with new technologies like blockchain-based securities which hold potential upscaling benefits such as increased secondary market liquidity.